Overview

On September 5, 2005, development plans to construct a 14-unit multifamily residential project located at 6515 44^th Street were approved. Maps depicting the project’s location are presented as Attachments I and II. Approval was also given to an Affordable Housing Plan (AHP) providing for the onsite construction of two (2) multifamily rental housing units in compliance with the County’s Affordable Housing Ordinance. This report authorizes the Sacramento Housing and Redevelopment Agency (SHRA) to execute an Affordable Housing Agreement (Agreement) with the developer to be recorded against the project properties prior to the issuance of the first building permit to ensure compliance with the approved AHP.

Recommendations

Staff recommends that the Executive Director be authorized to execute the Agreement with Trade Consulting and Investment, the developer of the 44^th Street Apartments residential project, to ensure compliance with the AHP to build two (2) multifamily rental units for low and very-low income households to remain affordable for a term of 55 years.

Measures/Evaluation

The proposed action is consistent with the requirements set forth in the Affordable Housing Ordinance, County of Sacramento Code Chapter 22.35 of Title 22 of the County Code. The Board of Supervisors of the County of Sacramento (“Board”) adopted an Affordable Housing Ordinance (“Ordinance”) on December 8, 2004. The Ordinance was subsequently amended on July 20, 2005 and August 24, 2005.

Fiscal Impact

There are no fiscal implications with the proposed action.

BACKGROUND

In general, the Ordinance requires a new residential project of five (5) or more dwelling units seeking project level approval to provide an affordable housing component of not less than 15 percent of the development project’s dwelling units. Depending on such project parameters as size, a developer is given various options to meet the affordable housing obligation. These include:

Dedicate vacant land at no cost to the SHRA and pay affordability fees for the future development of affordable housing by affordable housing developers;
Build onsite the standard affordable housing component, with 40 percent of the units affordable to low-income households, 40 percent to very-low income households, and 20 percent to extremely low-income households;
Build affordable housing onsite or off-site with modified income targeting;
Purchase land dedication credits, as available, and pay an affordability fee; and
Pay an in-lieu and affordability fees (typically for projects with fewer than 100 units).

The Ordinance became effective on January 20, 2005. Since that time, County Planning and SHRA staff have provided technical assistance to applicants, and reviewed and recommended approval for AHPs submitted as part of entitlement applications. The following provides summary information on Ordinance implementation as of December 31, 2006.

223 projects have been subject to the Ordinance representing over 31,745 market-rate units;
157 projects propose to meet their affordable housing obligation by paying a total of $49,700,800 in-lieu and affordability fees;
15 projects have been approved to construct a total of 580 affordable housing units (379 low, 140 very-low, and 61 extremely-low)
33 projects propose to meet their affordable housing obligation by constructing an additional 2,391 affordable housing units (1,527 low, 589 very-low, and 275 extremely-low);
11 projects propose to meet their affordable housing obligation by dedicating land and paying $12,144,000 in affordability fees.
$62,261,800 in combined in-lieu and affordability fees has been proposed.

For projects that will construct affordable units, the Ordinance requires the recordation of agreements necessary to ensure that the AHP is carried out and the affordable component is delivered. Generally, the developer will enter into an Agreement prior to approval of the development’s final entitlement approval, most typically a final map. This report recommends that SHRA enter into the Agreement with the developer of the 44^th Street Apartments residential project prior to the issuance of the first building permit in the absence of a final map. The Agreement is presented as Attachment III.

Due to the pending litigation challenging the validity of the Ordinance which names SHRA as a party, SHRA has been reluctant to adopt program guidelines for the Affordable Housing Program, including the delegation of authority for execution of the agreements, acceptance of land dedications, and adoption of program guidelines in accordance with the Ordinance. Consequently, SHRA is seeking approval to execute agreements on a project-by-project basis. All agreements will contain provisions that will hold SHRA harmless from any liability related to the litigation.

DISCUSSION

Trade Consulting and Investment, the developer, and SHRA will enter into and record an Agreement for onsite development of the low and very-low income units prior to issuance of the first building permit. This Agreement is in the form of a regulatory agreement requiring the developer to construct and manage two (2) affordable rental units with ongoing affordability for 55 years in compliance with the terms of this Agreement, the AHP, and the Ordinance. One (1) unit will be affordable to low-income households and one (1) unit will be affordable to very-low income households.

COMMISSION ACTION

At its meeting of January 17, 2006, the Sacramento Housing and Redevelopment Commission adopted a motion recommending approval of the attached resolutions. The votes were as follows:

AYES: Burns, Burruss, Fowler, Gore, Hoag, Piatkowski, Shah, Simon, Stivers

NOES: None

ABSENT: Coriano

MEASURES/EVALUATIONS

A biennial report due in 2007 will be presented to the Board providing information on the success and status of the various activities associated with the implementation of the Ordinance.

FINANCIAL ANALYSIS

There are no financial considerations associated with the recommended action.

POLICY CONSIDERATIONS

These actions are consistent with the requirements of the Ordinance and there are no changes being proposed.

ENVIRONMENTAL REVIEW

The County of Sacramento at the time of approval of the development plan review for this project found that it was exempt from environmental review per CEQA Guideline Section 15305. SHRA’s action to enter into the Agreement is in furtherance of the County’s approval of this project and no additional environmental analysis is required per CEQA Guidelines Section 15096. NEPA does not apply.

M/WBE CONSIDERATIONS

The items discussed in this report have no M/WBE impact; therefore, M/WBE considerations do not apply.

Respectfully submitted, APPROVED:

ANNE M. MOORE TERRY SCHUTTEN

Executive Director County Executive

Sacramento Housing and Redevelopment Agency

Attachments:

RES – Approval of 44^th Street Apartments Affordable Housing Agreement

ATT I – 44^th Street Apartments Site Map

ATT II – 44^th Street Apartments Vicinity Map

ATT III – 44^th Street Apartments Master Regulatory Agreement