Report on Affordable Housing Investment Plan recommends $10M for acquisition/rehab and 30% of funds for ELI units
The committee will receive a report on the Housing Investment Plan with an update on the expenditure of affordable housing funds and the total units in production. Staff recommend including two new priorities: (1) to set aside $10M for funding acquisition/rehab of existing market-rate housing and (2) to invest a minimum of 30% of funds in extremely low-income housing over the life of the Plan. The committee may move the report to be heard at the full City Council meeting on April 9, 2019.
The report estimates that 1,412 new affordable housing units will be added to the 1,146 currently in the managed pipeline and 946 units currently funded or under construction for a total of 3,503 new affordable units that will be created, under construction or funded by the end of FY 2022/23. The total to be funded and built from both City investment and efforts outside of the City is 5,771 units. There is a significant shortfall in meeting the affordable housing production goal of 10,000 units established by the Mayor and City Council. Over $520 million in funding is necessary to fund the gap of 4,229 units and staff recommend exploring new funding sources for affordable housing, including creative strategies.
Funding for the “Missing Middle”
The majority of funding sources used by the Housing Department to finance affordable housing are limited to assisting residents between 30% and 60% AMI. Residents earning 61% to 80% of AMI ($63,000 to $75,000 for a two-person household) are considered low-income but do not qualify for the majority of affordable housing in San José. Additionally, moderate-income residents earning 81% to 120% AMI struggle to afford housing. The Governor’s January Proposed Budget calls for an investment of $500 million for the development of housing for the Missing Middle through the expansion of its Mixed-Income Loan Program (MILP). The Mayor’s Budget Message issued on March 8, 2019, directs the City Manager to identify $10 million of Inclusionary Program fee revenue as local funds to match funding from the MILP. A commitment of local funds aligns with the State program priorities making San José developments more competitive on a state-wide basis. This priority will allow San José to build more housing for workers of modest incomes. These funds are available for this purpose and will be held until action is taken by the City Council to set aside funds for this purpose.
Revisiting Bond Measure
The narrow defeat of Measure V suggests that future voters may be supportive in passing a general obligation bond measure for affordable housing. The Mayor’s March Budget Message for Fiscal Year 2019/20, which is scheduled for City Council review and approval on March 19, 2019, directs the City Manager to fund ballot measure polling to determine whether the City should place a general obligation bond measure for affordable housing on the ballot for the 2020 election. Funds from a general obligation bond could be used to finance the acquisition, rehabilitation and construction of affordable housing.
SB 2:
The City is estimated to receive approximately $3.4 million annually from this new source, although that amount will vary per the volume of real estate recordings. Funding will come to the City beginning in FY 2019/20. The eligible uses for SB 2 funds are flexible and include creating and preserving affordable housing for all income levels up to 150% AMI in high-cost areas. It can also be used for homelessness response strategies, homelessness prevention, and other uses.
Upcoming Policy Initiatives
In Spring, 2019, the Housing Department will begin work on two initiatives that will impact the location of future affordable housing in San José. The first project involves updating San José’s Fair Housing Plan as required by the Federal Government and in concert with California Assembly Bill 686 (2018). The Plan will explore ways to take meaningful actions that combat discrimination, overcome patterns of discrimination, and foster inclusive communities free from barriers to opportunity based on race, ethnicity and other protected classes. In addition, the Housing Department will modernize its affordable housing dispersion policy to guide where City-financed affordable development will occur. This policy would help ensure that affordable housing is distributed throughout the city, particularly in areas with access to high quality transit, job centers, parks, libraries, quality schools, and other amenities. Together these initiatives will influence how and where the City funds future affordable housing.
Where: San Jose City Council Community Economic Development
When: Tuesday, March 26, 2019, 6pm
Link to item: https://sanjose.legistar.com/LegislationDetail.aspx?ID=3871457&GUID=F7794E2A-DB3A-44D3-8F3F-883E62702BC7&Options=&Search=
Link to agenda: https://sanjose.legistar.com/MeetingDetail.aspx?ID=673627&GUID=082CB7F0-823E-45A5-BD47-CA7CA79AAAF0&Options=info&Search=
In mid-October 2018, City Council directed the FCCP Board to study the issue of changing mayoral elections to presidential election years. The Board recommends shifting the City’s mayoral election from the gubernatorial cycle to the presidential cycle.
The Board’s main argument: in 1980 through 2018, voter turnout in the City of San Jose was over 13 percent higher for presidential general elections compared to gubernatorial general elections, and over 8 percent higher for presidential primaries compared to gubernatorial primaries, indicating that voter turnout may increase for mayoral elections if shifted to a presidential election cycle.
Additionally, the FCCP board raises the question of whether (if the policy passes) to hold a special election or extend the present mayoral term to 6 years. It declines to opine on the matter, deferring to City Council to decide and City staff to estimate costs on a special election.
Shifting the mayoral election to the presidential election cycle will require the Council to submit a ballot measure to the voters to amend the City Charter.
Where: San Jose City Council
When: March 26, 2019, 1:30PM
Link to item: https://sanjose.legistar.com/LegislationDetail.aspx?ID=3886818&GUID=6EBBCAF6-0B55-45A8-A785-72CA4F3698DD
Link to agenda: https://sanjose.legistar.com/DepartmentDetail.aspx?ID=21676&GUID=ACCCCFF5-F14A-4E1A-8540-9065F45A8A90
DEFERRED to 4/9 + NEW MEMO 3/15 – Discussing options for “recontrol” Ellis Act provisions
NEW 3/15 MEMO – Staff presents additional research to inform possible changes to re-control Ellis Act provisions. The likely outcome is that Council will direct them to conduct more research. In this report, they find that:
Original item: The Ellis Act regulates how landlords of rent-controlled properties (San Jose properties built before 1979 with rent raises restricted to 5% a year) may take their properties off the market, effectively evicting all current tenants. They are required to give tenants 120 days’ notice and pay relocation costs.
Council will receive a staff report providing research on the Ellis Act Ordinance’s recontrol provisions. “Recontrol” refers to the full or partial reinstatement of rent control when a landlord places the property back on the market. The specifics of recontrol terms can have significant effects. In Santa Monica, for example, local government passed an ordinance stating that Ellis Act properties that were taken off the market, rebuilt, and back on the market within 5 years of an Ellis Act eviction were subject to full rent “recontrol.” This resulted in some landlords waiting for 5 years to lapse before putting their properties back on the market.
The staff report will include different options for meeting recontrol requirements. City Housing Director Jacky Morales-Ferrand argues that 100% recontrol provisions can lead to a net loss of rent controlled units.
Where: San Jose City Council
When: March 26, 2019; item not to be heard before 4pm.
Link to item: https://sanjose.legistar.com/LegislationDetail.aspx?ID=3886012&GUID=7EB87F40-3C2C-436E-8235-2D78ED86A500
Link to agenda: https://sanjose.legistar.com/DepartmentDetail.aspx?ID=21676&GUID=ACCCCFF5-F14A-4E1A-8540-9065F45A8A90
Supporting Beall’s SB5 on Local-State Sustainable Investment
The Rules Committee previously recommended that the City support SB5 if amended. It is unclear whether SB5 has been amended or not, but the latest recommendation from the Rules Committee is to support SB5.
State Senator Beall’s SB5 bill would fund state-approved, locally-based sustainability projects (e.g. planning for sea level rise, infill development, transit-oriented development) including 50% affordable housing. These projects would be funded using reduced Educational Revenue Augmentation Fund contributions from local governments, while ensuring that potentially impacted schools are made whole. As part of its support, the City would also send its lobbyist to lobby for the bill in Sacramento.
Where: San Jose City Council
When: March 26, 2019
Link to item: https://sanjose.legistar.com/LegislationDetail.aspx?ID=3894413&GUID=5A3367E5-3F8E-4E88-81EC-CA8496127A48
Link to agenda: https://sanjose.legistar.com/DepartmentDetail.aspx?ID=21676&GUID=ACCCCFF5-F14A-4E1A-8540-9065F45A8A90
Approve $150.2M sale of Great America Theme Park land to Cedar Fair Southwest
Staff recommend that council approve the sale of land at the Great America Theme Park Parcels to Cedar Fair Southwest, Inc. at a purchase price of $150.2M.
Bids from four firms were opened on September 25, 2018. Cedar Fair Southwest is exercising its Tenant’s First Refusal Purchase Rights and matching the offer from iStar which had been selected from the bidding.
Where: Santa Clara City Council
When: Tuesday, March 26, 2019, 3:30pm
Link to item: https://santaclara.legistar.com/LegislationDetail.aspx?ID=3897746&GUID=CF3027A7-345C-406E-A353-
Link to agenda: https://santaclara.legistar.com/MeetingDetail.aspx?ID=640623&GUID=C7BB9673-855F-4A7E-9713-49302CE5840B&Options=info&Search=
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