California Redevelopment Association

Redevelopment Set-Aside

Presented By: Andrew Lazzaretto

September 16, 1999

Origin of Housing Set-Aside

• Tax Increment Revenue– Based on Value in Project Area at Time of

Adoption– Increase in Property Taxes Split

• Taxing Entities

• Redevelopment Agency - General

• Redevelopment Agency - Housing Set-Aside

Tax Increment Distribution

0

2,000,000

4,000,000

6,000,000

8,000,000

10,000,000

12,000,000

14,000,000

16,000,000B

ase 4 8 12 16 20 24 28 32 36 40 44

Base Housing Agency - Gen'l Taxing Agencies

Tax Increment Distribution

$0$10,000,000$20,000,000$30,000,000$40,000,000$50,000,000$60,000,000$70,000,000$80,000,000$90,000,000

Increment

HousingAgencyTaxing Entities

Use of Housing Set-Aside Funds

• “To Improve, Increase, & Preserve the Supply of Affordable Housing In the Community”

• New Construction

• Acquisition

• Improvements– Off Site & On-Site

Use of Housing Set-Aside Funds

• Rehabilitation

• Provide Subsidies– Low & Moderate Income Families– Private Entities to Maintain Affordability

• Loans, Bonds, & Advances

• Develop Plans

• Maintain Supply of Mobile Home Parks

Use of Housing Set-Aside Funds

• Preserve Affordable Housing Threatened w/Conversion to Market Rate Housing

Limitations on Housing Funds

• When any affordable housing is destroyed or removed from the market, the Agency must replace an equal number of units w/in 4 years– 75% of housing units must be in same income

levels

Limitations on Housing Funds

• At least 30% of all new units developed by the Agency must be affordable– 50 % must be provided to very low income

households

• At least 15% of all new (or substantially rehabilitated) units developed by others must be affordable– 40% must be very low income units– Within Project Area Only!

Limitations on Housing Funds

Units Developedby Agency

Units Developedby Others

Total 100 100

Total Affordable 30 15

Low/ModerateIncome 15 9

Very Low Income 15 6

Limitations on Housing Funds

• To satisfy the provisions of the CRA, the Agency may aggregate the replacement housing units in one or more projects, provided that doing so will not cause or exacerbate racial, ethnic, or economic segregation

Limitations on Housing Funds

• The CRA requires affordability to be maintained for the “longest time feasible”– Not less than 30 years– The Code permits the resale of units to eligible

families, including equity sharing• The Agency’s investment from the Low and

Moderate Income Housing Fund must be protected

Limitations on Housing Funds

• The Agency can replace destroyed or removed units with a fewer number of replacement units, provided the total number of bedrooms equals or exceeds the number of bedrooms in the destroyed or removed units

Limitations on Housing Funds

• The Agency must develop a Replacement Housing Plan 30 days prior to acquiring real estate, or entering into a DDA or OPA

Practical Uses for FundsFour Case Studies

Norwalk Senior Housing

• Acquisition of Land• Relocation of Tenants• Environmental Review• Demolished Existing Improvements• Undergrounded Utilities• Abandoned Rights-of-Way• Attracted Developer• Contributed Land in Return for Community Center

Development

La Mirada Town Homes

• Off-site Improvements• Agreed to Acquire Developed Units

– Negotiated Price– Below Public Offering Price– Dispersed Throughout Larger Project

• Agency Sold Units to Eligible Families– Absorbed Affordability Gap

• Issues w/Homeowner’s Association

Avalon Metropole Project

• Proposed• Land Acquisition• Tenant Relocation• City Contributed City Hall Land• Mixed Use Development• Seeking Developer

– City Hall, Affordable Housing, Market Rate Housing, Community Center

Santa Fe Springs Approach• Home Repair Crew

– Make Improvements for Eligible Families• Home Acquisition & Renovation Program

– Purchase Dilapidated Homes– Upgrade to Current Standards– Sell to Qualifying Families

• Multi-Family Acquisition– Acquired RTC Apartment Building– Replaced w/New Single-Family Neighborhood

Conclusions

• CRA Law Has Many Mandates, but Provides Flexibility

• Most Effective Use is in Conjunction w/Other Private & Public Resources