PURPOSE

The purpose of this memorandum is to transmit to the City Council (City) the Draft Relocation Plan (Exhibit A) and provide to the Redevelopment Agency (Agency) the Replacement Housing Plan (Exhibit B) for 2321 North Fairview Street and 2321-2323 North Catalina Street to be acquired and rehabilitated by the Burbank Housing Corporation (Properties) pending future Agency authorization.

BACKGROUND

The Burbank Housing Corporation recently entered into a purchase agreement with the owner of the Properties contingent upon financing from the Burbank Redevelopment Agency.   Redevelopment Agency staff in turn is preparing for future Agency consideration an Affordable Housing Agreement with the Burbank Housing Corporation that would finance development costs necessary for the Burbank Housing Corporation to acquire the properties and complete the scope of work involving rehabilitation, demolition, site work and use conversion to establish an activity center for the neighborhood.

The Properties will adhere to a proven strategy for upgrading a neighborhood in decline.   As with other focus neighborhoods, such as the Elmwood area, the approach is to assist the Burbank Housing Corporation acquire and rehabilitate properties in the neighborhood.  The Burbank Housing Corporation is then to operate these sites as mixed-income projects with an affordability component and, in this instance, convert a residential building into an activity center from which to provide services that will help to integrate tenants into the community. 

As part of the strategy to upgrade the area, the efforts of the Burbank Housing Corporation have been complimented by other recent achievements:

�      Burbank Cottages.  The Agency has joined with M. David Paul and Associates to construct 20 single-family detached units, 10 of which are restricted to moderate-income households and the remaining units sold at market rate. 

�       Cottages Children�s Center.  An important step toward addressing the shortage of quality childcare in Burbank, this recently completed project includes an 8,600 square foot childcare facility and playground designed to accommodate 92 children. 

Tonight�s actions by the City to accept the Draft Relocation Plan and by the Agency to approve the Replacement Housing Plan for the Properties is in anticipation of future consideration of an Affordable Housing Agreement that implements several elements of the aforementioned approach to revitalizing neighborhoods.  This action also fulfills several housing objectives and programs adopted by the Agency and City Council, as recommended by the Blue Ribbon Task Force on Affordable Housing and as later reiterated at the July 2003 study session on an affordable housing strategy. 

q       Objective: Sustain and Strengthen Neighborhoods

q       Program:  Continue acquisition/rehabilitation activities in focus neighborhoods

In recent years, the City and the Agency assisted the Burbank Housing Corporation to acquire and rehabilitate 15 other units, all within several blocks of one another; part of the 187 units the Burbank Housing Corporation currently operates in Burbank.[1] 

The Burbank Housing Corporation has had limited success, though, in acquiring properties in this neighborhood due to property owners who are unwilling to sell. Over the past three years, the Burbank Housing Corporation has made inquiries to a number of property owners, leading to the current property holdings, as well as the rejection of offers from owners of 12 owners of distressed properties (Exhibit C).   In addition, the Burbank Housing Corporation looked into purchasing two parcels (2337 and 2341 North Fairview Street) sandwiched between the three parcels owned by Burbank Housing Corporation from 2325 to 2335 North Fairview and another Burbank Housing Corporation property at 3000-3030 North Thornton.  In neither instance was the Burbank Housing Corporation able to negotiate with a willing seller.

q       Objective: Create community in conjunction with housing

q       Program:  Integrate community-serving uses with housing development

Whenever possible, the Agency is to seek to incorporate community-serving uses within new and existing residential development that address the needs of the larger neighborhood.   The Agency has integrated an activity center into the Elmwood neighborhood, the Lake-Verdugo area and an activity center is being constructed as part of the Peyton-Grismer project, leaving the Golden State area as the only focus area without an activity center. 

The placement of the proposed activity center, which would function primarily as an activity center for youth, is planned for 2321 North Catalina and would be centrally located in the western quadrant of the Golden State Focus Neighborhood.   If the Burbank Housing Corporation continues expansion into the eastern quadrant, between Naomi and Lincoln Streets, the Agency may at some future date wish to look at yet another activity center.

ANALYSIS

On January 22, 2004, the Burbank Housing Corporation made an offer to purchase 2321 North Fairview Street and 2321-2323 North Catalina Street.   Following negotiations, the Burbank Housing Corporation entered into a purchase agreement with the property owners, subject to financing from the Redevelopment Agency.   Redevelopment Agency staff in turn is preparing, for future Agency consideration, an Affordable Housing Agreement with the Burbank Housing Corporation that would finance the following development activities: 

• Acquire 18 rental units:

• Convert one single-family residential unit into an activity center for common use by tenants (primarily serving as a youth center);

• Demolish three residential units to improve parking, open space and on-site circulation; and

• Rehabilitate the remaining 14 residential units as a mixed-income project with an affordability component for very low and lower income households. 

Burbank Housing Corporation�s property negotiations were predicated upon the owners� indication that they do not wish to sell the two sites separately.  This has been a positive outcome, for this transaction would virtually double Burbank Housing Corporation�s units in the Golden State neighborhood thereby improving its cash flow.

Project Site

Located in an R-4 medium density residential neighborhood in the Golden State Focus Neighborhood, the Site is comprised of three parcels at two separate sites (Exhibit B).   Combined, the two locations encompass 18 residential units: 14 one-bedroom units (two of which are studio units) and four two-bedroom units.   The property at 2321 North Fairview Street contains a two-story apartment building constructed in 1963 and includes six one-bedroom units on a 6,795 square foot lot.   The two parcels at 2321-2323 Catalina Street include two one-bedroom detached single-family dwellings, a duplex comprised of studio units and an eight-unit apartment building with four one-bedroom and four two-bedroom units built in 1941 on a 13,595 square foot lot.

The following information summarizes the salient sections of the Draft Relocation Plan for the Properties that the City is asked to accept.  At the end of a thirty-day public comment period, the City considers approving the Relocation Plan.  An overview of the Replacement Housing Plan for the Properties is also set forth in this memorandum.   At the end of thirty days from Agency adoption of the Replacement Housing Plan, the Agency will be requested to approve an Affordable Housing Agreement with the Burbank Housing Corporation; it is the actions authorized under the Affordable Housing Agreement that mandates the requirement for the two aforementioned plans.

The City�s Draft Relocation Housing Plan

A Relocation Plan is required for the Properties because of the necessity to relocate tenants for the conversion of a renter-occupied, single-family unit into a new activity center and for the demolition of three other units (a duplex with two studio apartments and a functionally obsolescent one-bedroom, single-family dwelling) to improve on-site parking and circulation.    Under California Relocation Guidelines, a relocation plan is required after the initiation of negotiations (January 22, 2004 was the date of Burbank Housing Corporation�s offer to purchase) and before any action triggering displacement, in this instance, rehabilitation and demolition actions.   Consequently, the Agency�s relocation consultants, Overland, Pacific and Cutler (Consultant), prepared the attached Draft Relocation Plan for the Properties, which serves as the initial step in the tenant relocation process.

In conformance with State relocation guidelines, the Draft Relocation Plan for the Property is to be available for public review for 30 days before initiating any relocation activities, including issuance of 90-day notices to vacate.  The following primary areas of the Draft Relocation Plan will be under public review:

q       An assessment of the relocation needs of residents expected to be displaced by the project

The Draft Relocation Plan notes that "There are eight adults and three children occupying the four households�, and that these �households reported income levels that fall within the area�s �extremely low�, �very low� and median income categories.� 

Two of the four households proposed to be displaced occupy two studios and pay rent of $450 and $550 per month, while the other two households to be displaced reside in two one-bedroom units and pay rent of $650 and $825 per month. 

q       An assessment of the availability of replacement housing in Burbank

A key component to any relocation plan is the necessity in demonstrating that there is comparable housing that is safe, decent and sanitary for displacees.  To that end, the Consultant conducted a rental housing survey on March 1, 2004, which found that there �was an adequate number of available market-rate units �found to meet the potential needs of the households that will be permanently displaced.�   No household is displaced without first receiving a 90-day written notice and without a comparable[2] replacement housing unit being available.

The Draft Relocation Plan notes that the Consultant is to provide the following relocation assistance: distribute a general information notice to all tenants; provide a minimum of three referrals to displacees of comparable replacement units; and assist with the completion and filing of relocation claims, rental applications and, if necessary, appeals forms.  Relocation benefits will include payment for moving expenses, either a fixed payment allowance or actual moving expenses, as well as Rental Assistance Payments computed under State Relocation Law as either $5,250 or �Last Resort Housing Payments�[3] if comparable, affordable housing is unavailable. 

q       The steps and procedures to be undertaken to ensure a fair and equitable relocation program 

The relocation program that the Agency is to implement is in accordance with State Relocation Law (Government Code Section 7260, et.  seq.) and Relocation Assistance and Real Property Acquisition (Title 25, Chapter 6) and, as such, is intended to achieve the following objectives:

• Inform all eligible occupants of the relocation process, assistance and benefits;

• Determine the needs of each eligible displacee household;

• Provide current information on replacement housing opportunities and an adequate number of referrals to comparable, decent, safe and sanitary housing units;

• Provide non-discriminatory relocation assistance to all relocated persons;

• Assist each eligible person to complete applications for benefits;

• Make relocation benefit payments in accordance with the State relocation guidelines;

• Inform all persons subject to displacement of the Agency's policies with regard to eviction and property management; and

• Establish and maintain a formal grievance procedure for use by displaced persons seeking administrative review of Agency decisions with respect to relocation assistance. 

The Agency�s Replacement Housing Plan

California Redevelopment Law under Section 33413.5 (Healthy and Safety Code, Section 33000 et seq.) stipulates that a redevelopment agency is 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.   A replacement housing plan identifies the effect a redevelopment project will have on the local jurisdiction�s low and moderate-income housing supply and describes 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 very low, low, and moderate-income households for the longest feasible period, but not less than the land use controls set forth in the Redevelopment Plan (see page two, of the Replacement Housing Plan, which sets forth the expiration period per project area).

Chart A on the following page stipulates that the loss of four units and a corresponding four bedrooms due to destruction or conversion must be replaced and be affordable to the same income levels as the tenants being relocated.   To replace the bedrooms by income category will necessitate three replacement bedrooms affordable to very low-income households and one unit affordable to a moderate-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.

Before the advent of the Properties, the Agency had an inventory of 313 replacement units and 320 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 of the Properties, which will result in a remaining surplus of 309 units and 316 bedrooms available for any future replacement housing needs.  

ENVIRONMENTAL REVIEW

The Burbank Redevelopment Agency acting as the lead agency determined, pursuant to the California Environmental Quality Act (CEQA), that the Replacement Housing Plan and the Draft Relocation Plan for the Properties are covered under the Statutory Exemption for the proposed lower-income housing project at 2321 North Fairview Street and 2321-2323 North Catalina Street as described in the pending Affordable Housing Agreement between the Burbank Redevelopment Agency and the Burbank Housing Corporation.

FISCAL IMPACT

There will be no direct fiscal impact to the City General Fund.  The Agency will use several of its banked replacement housing units thus requiring no additional expenditure of Agency funds to create new replacement units.   The development cost for the Properties, which includes an estimated relocation budget of $105,000, requires a budget amendment of the Agency�s Low and Moderate-Income Housing funds when the Agency acts on an Affordable Housing Agreement with the Burbank Housing Corporation.

RECOMMENDATION

Staff recommends the following actions:

q     The City Council accept the Draft Relocation Plan for 2321 North Fairview Street and 2321-2323 North Catalina Street and instruct staff to return at the end of the 30-day public review period at which time the City Council is to consider the adoption of the proposed Relocation Plan; and

q     The Redevelopment Agency approves the proposed resolution adopting the Replacement Housing Plan for 2321 North Fairview Street and 2321-2323 North Catalina Street.

EXHIBITS:

A         Draft Relocation Plan 

B         Replacement Housing Plan

C         Vicinity Map

Pgrelocationplan

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