PURPOSE

The purpose of this report is to provide information to the Burbank Redevelopment Agency Board (Agency Board) to consider a Replacement Housing Plan (Exhibit A) for 1722 Elliot Drive proposed to be acquired by Burbank Housing Corporation and subsequently demolished pending future Agency Board authorization. 

BACKGROUND

On February 16, 2006, the Burbank Housing Corporation (BHC) entered into a purchase agreement with the owner of residential property located at 1722 Elliot Drive (Property) in the Peyton-Grismer Focus Neighborhood.  The Property contains five dwelling units.  BHC proposes to purchase the Property and demolish the existing housing units in preparation for a future affordable housing development on the site. 

Burbank Housing Corporation�s acquisition of the property is contingent upon the Agency Board providing financing to BHC for the purchase. Agency staff is preparing for future Agency Board consideration of a Loan Agreement with BHC that would finance the property acquisition.  Staff has scheduled the proposed Loan Agreement with BHC for the Agency Board�s consideration for April 25, 2006.    

California Redevelopment Law requires a redevelopment agency to adopt a replacement housing plan when entering into an agreement that would lead to the destruction or removal of residential units from the low and moderate-income housing market.  The proposed acquisition and demolition of the 1722 Elliot Drive will result in the removal of residential units from the low and moderate-income housing market.  In anticipation of the Agency Board�s future consideration of a loan agreement with BHC to acquire and subsequently demolish 1722 Elliot Drive, staff has contracted with Overland, Pacific & Cutler, Inc., an acquisition and relocation consulting firm, to prepare the attached Replacement Housing Plan (Plan) for the Agency Board�s consideration and approval.  The Plan identifies the number of housing units and bedrooms that require replacement by the Agency as a result the proposed acquisition and demolition of 1722 Elliot Drive.  

ANALYSIS

Description and Occupancy of Property

The property at 1722 Elliot Drive is located on two parcels within a R-4 residential zone and contains five dwelling units:  a two-bedroom house, two one-bedroom units, and two studio units.  According to the public records of the Los Angeles County Assessor and City of Burbank Building Division, the legal use of the property is a four-unit residential property.  This indicates that one of the five housing units on the property may not be a legally permitted residential structure.  In addition, the property is not well maintained and the units are in poor and deteriorating condition.  Photos of the Property are attached hereto as Exhibit B. 

The property owner occupies the two-bedroom house.  In addition, a one-bedroom unit is occupied by the property owner�s extended family.  The remaining housing units, two one-bedroom units and one studio unit are renter occupied.  The three renter occupied units are the subject of the Replacement Housing Plan.  Two of the renter occupied units are considered affordable to extremely low-income households and the third unit is considered affordable to a very low-income household.  The two owner-occupied units are not subject to the Replacement Housing Plan.  

Draft Replacement Housing Plan

As stated above, California Redevelopment Law under Section 33413.5 (Health and Safety Code, Section 33000 et. sec.) requires a redevelopment agency to adopt a replacement housing plan when entering into an agreement that would lead to the destruction or removal of residential units from the low and moderate-income housing market.  The plan should identify the effect that a redevelopment project will have on the supply of low and moderate-income housing in the community and describe the measures an agency will undertake to provide comparable replacement housing.  The Replacement Housing Plan notes that Community Redevelopment Law offers a redevelopment agency two options in meeting its replacement housing obligations:

• Section 33413(a) mandates that whenever housing units for low or moderate-income households are destroyed, an agency is to replace the removed units with comparable housing units within four years of demolition.  Since January 1, 2002, all replacement units must also be available at an affordable housing cost and be occupied by households whose income levels are commensurate with those households displaced from units removed through Agency assisted projects.

• Section 33413 (f) allows a redevelopment agency to replace destroyed or removed dwelling units with a lesser number of replacement units if the following criteria are met:  (1) The total number of bedrooms in the replacement dwelling units equals or exceeds the number of bedrooms in the destroyed or removed units, and (2) the replacement units are affordable to the same income level of the households as the destroyed or removed units.

Replacement units must be in standard condition and be affordable to extremely low, very low, low, and moderate-income households for the longest feasible period, but not less than the land use controls set for the Redevelopment Plan.

The table below identifies three housing units and corresponding bedrooms that will be removed from the low and moderate-income housing market as a result of the proposed acquisition and demolition of 1722 Elliot Drive.  These units and/or bedrooms must be replaced and be affordable to the same income level as the tenants being displaced.  To replace the bedrooms by income category will necessitate two replacement bedrooms affordable to extremely low-income households and one replacement bedroom affordable to a very low-income household.  A lesser number of units may serve as replacement units to the extent that the total number of bedrooms by income category is achieved.

The table on the following page shows that the Agency currently has an inventory of 324 replacement units and 333 replacement bedrooms created from other Agency affordable housing projects for very low, low, and moderate income households.  The Agency will draw from this surplus or �banked� replacement units and bedrooms to satisfy the replacement obligations for the very low-income unit and bedroom, which will result in a remaining surplus of 321 units and 330 bedrooms available for any future replacement housing needs. 

However, the Agency currently has no surplus extremely low-income replacement units or bedrooms.  As a result, the Agency will commit to providing two extremely low-income replacement housing units or bedrooms within a four year period from the date of removal of the extremely low-income units from 1722 Elliot Drive.  In addition, the extremely low-income replacement units or bedrooms will remain affordable for a period of at least 55 years.  

ENVIRONMENTAL REVIEW

The Burbank Redevelopment Agency acting as the lead agency has determined, pursuant to the California Environmental Quality Act (CEQA), that the Replacement Housing Plan is covered under the exemption for the proposed acquisition of 1722 Elliot Drive to be described in the pending Loan Agreement between the Burbank Redevelopment Agency and Burbank Housing Corporation.

FISCAL IMPACT

There will be no fiscal impact to the City General Fund.  In addition, there is no immediate fiscal impact to the Agency Low and Moderate Income Housing Fund.  The Agency will use its surplus replacement housing units to meet its replacement housing obligation for the very low-income housing unit.  The Agency may incur a future cost to the Low and Moderate Income Housing Fund to provide two extremely low-income replacement housing units or bedrooms required to meet its replacement housing obligation.  These future costs will not be incurred without prior Agency Board approval.  

RECOMMENDATION

Staff recommends that the Agency Board approve the proposed resolution adopting the Replacement Housing Plan for 1722 Elliot Drive.

EXHIBITS

A         Replacement Housing Plan

B          Photos of 1722 Elliot Drive