Staff Report - April 2, 2002 - Agenda Item

The purpose of this memorandum is to (1) transmit for the approval of the Burbank Redevelopment Agency Board (Agency) an Affordable Housing Agreement (Exhibit A) with the Burbank Housing Corporation to finance the Burbank Housing Corporation�s acquisition and rehabilitation of rental units at 2321 North Fairview Street and 2321-2323 North Catalina Street (Properties) in the Golden State Focus Neighborhood as a mixed-income, affordable housing project inclusive of an activity center; and (2) to provide for the approval of the City Council (City) a Relocation Plan (Exhibit B) for the Properties.

Assisting in the acquisition and rehabilitation of the Site is predicated upon a proven strategy for upgrading a neighborhood in decline. The City and Redevelopment Agency have provided the Burbank Housing Corporation with funding since 1997 to upgrade rental properties and to implement youth and family services as a proven strategy for upgrading neighborhoods in decline. In each focus neighborhood, such as Elmwood and Peyton-Grismer, the approach has been to assist the Burbank Housing Corporation acquire and rehabilitate deteriorated properties, operate them as mixed-income properties with an affordability component and develop 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.

The initial steps leading to a housing strategy began in 1999, when a Housing Needs Assessment was prepared in order to provide a profile of the community housing stock that updated the 1990 census data. The Housing Needs Assessment became a guide in determining the adequacy of existing housing programs and the catalyst for developing new programs. The study also served as the basis to several essential housing documents for the City required by state or federal law: the City�s Housing Element required by State Law; the Redevelopment Agency Implementation Plan also required by state law; and the Consolidated Plan required by the Federal government for fund grantees. Due to the dynamic nature of the housing market, and the available 2000 census data, the Needs Assessment was updated in December 2001 by the Housing Profile, which more specifically evaluated the impact of the City�s escalating housing demand on Burbank�s residents and workforce, and laid the groundwork for identifying gaps in the City�s current affordable housing programs. Both studies were intended to increase the Agency�s understanding of local market conditions, and led to the creation of the Blue Ribbon Task Force on Affordable Housing in April 2002.

Concurrently, the City and Agency prepared three plans required by either the State or Federal government. All are interconnected by a common set of housing principals that include continuing geographical targeting of resources into focus neighborhoods and working with the Burbank Housing Corporation (BHC) to acquire and rehabilitate substandard units as affordable rental properties, as well as encouraging development of mixed-use projects in the downtown and along commercial corridors.

q Housing Element

Adopted June 2001, the Housing Element of the General Plan is a State mandated policy document that details Burbank�s affordable housing needs and sets forth policies for the City to encourage and facilitate both public and private sector development of affordable housing. The Housing Element acknowledges that both public and private sector efforts are needed to address Burbank�s affordable housing needs.

q Implementation Plan

In conformance with California Redevelopment Law (Section 22390), the Implementation Plan sets forth the means for instituting the Plan�s goals and objectives for housing preservation and production, as well as meeting the statutory requirement for setting aside tax increment funds for housing purposes. The Plan further describes the Agency�s inclusionary and replacement housing obligations and the expenditure of the Low and Moderate-Income Housing Fund. In December 2002, the Agency approved the mid-cycle update to the Plan.

q Consolidated Plan

As a prerequisite to receive federal entitlement funds (e.g., Community Development Block Grant and HOME Investment Partnerships Act funds) and to be eligible to apply for other federal sources, the City Council approved the most recent Consolidated Plan in April 2003. This document is a multi-year strategic plan for addressing Burbank�s low and moderate-income housing and community development needs and explaining how federal, State and local sources will be used to carry out programs responding to identified local needs.

In order to localize affordable housing goals and objectives through community outreach, in April 2002, the Agency appointed a Blue Ribbon Task Force on Affordable Housing (Task Force) charged with taking a comprehensive look at the City�s affordable housing needs and providing recommendations to increase Burbank's stock of affordable housing. The intent of the task force was to incorporate public participation into the housing strategy process. Over a period of six months and eight committee meetings, the Task Force took a comprehensive look at Burbank�s affordable housing needs and developed a consensus report recommending implementation of a series of 16 housing programs. Following is a list of the goals and implementing programs developed by the Task Force.

� Program: Adopt inclusionary zoning to integrate affordable units within market rate developments.

� Program: Site assembly and reuse of existing structures in Downtown for mixed-income development.

� Program: Site assembly along commercial corridors for residential in-fill.

� Program: Adopt mixed-use zoning standards, including live/work options and standards for small lot development.

� Program: Acquire scattered vacant residential sites/distressed properties for in-fill development.

� Program: Buy-down of debt on existing apartment buildings in exchange for affordability covenants.

� Program: Continue acquisition/rehabilitation activities in focus neighborhoods.

� Program: Continue single-family and multifamily rehabilitation assistance.

� Program: Provide housing for special needs populations, including the disabled, large families, single-parent households, seniors and victims of domestic violence.

� Program: Extend financial assistance to property owners and tenants for accessibility improvements in existing rental housing.

The item discussed tonight also fulfills 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 Program: Continue acquisition/rehabilitation activities in focus neighborhoods

The Burbank Housing Corporation has had difficulty in acquiring properties in this neighborhood due to uncooperative property owners. The City and the Agency have assisted the Burbank Housing Corporation with the acquisition and rehabilitation of 15 other units; a small fraction of the 187 units the Burbank Housing Corporation currently operates in Burbank.[1]

Whenever possible, the Agency is to incorporate community-serving uses within new and existing residential developments 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 Agency in cooperation with the Burbank Housing Corporation continues to take strides in outreaching to residents in the focus neighborhoods. The Agency has developed, neighborhood-by-neighborhood, activity centers from which to offer community enriching uses, such as family and youth services. Beginning with Elmwood, the Agency has also funded the Verdugo-Lake Activity Center, budgeted funds to construct the Peyton-Grismer Activity Center and tonight will consider an activity center for the Properties in the Golden State neighborhood. Along with funding a facility, an activity center, the Agency has structured agreements to fund the operation of these facilities out of the rental revenue.

The Agency and the Burbank Housing Corporation continue to sponsor neighborhood events and facilitate information sharing for residents as an on-going effort to improve citizen participation and to strengthen and build a sense of community in their neighborhoods. Here are some recent examples:

� Following a series of meetings spanning 12 months with residents in the Peyton-Grismer focus area, the Agency provided a neighborhood picnic last summer at the site of the future Peyton-Grismer Activity Center;

� The first Grismer Revitalization Project Monthly Update for 1801-1819 residents was released last month;

� A street fair that included exhibitors by many City Departments as well as local community organizations was coordinated for residents in the Verdugo-Lake focus area on May 15^th; and

� A quarterly community outreach newsletter is being developed for distribution to the five focus neighborhoods; the first publication is due out this summer. Each newsletter will highlight City programs as well as other outside agency programs.

With the creation of a Community Resources Coordinator position earlier this year, we have been able to focus on community outreach within the five (including one under study) focus neighborhoods as recommended by the Blue Ribbon Task Force. In addition to the activities listed above, the Community Resources Coordinator has provided presentations to organizations and groups on City and local services and programs. These efforts are geared toward building community within the focus neighborhoods and connecting the community with available resources, with the ultimate goal of enhancing quality of life and community enrichment.

Located in an R-4 medium density residential neighborhood in the Golden State Focus Neighborhood, the Properties are comprised of three parcels at two separate sites (Exhibit C). 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 Burbank Housing Corporation has entered into a purchase agreement with the sellers for a purchase price of $2.494 million, contingent upon Agency assistance. Purchasing in today�s residential market remains costly, with supply continuing to lag behind demand, making the highest and best use for this site multifamily development. The Agency�s appraiser noted, �The current supply of multi-residential buildings in Burbank is lower than the present demand for these properties. This creates an upward effect on prices and rent levels in the marketplace.� It is important to note, though, that the purchase price is within ten percent of the fair market value based upon an appraisal by Otis E. Hackett & Associates. Past practice has been to accept an offer if it falls within ten percent of appraised value. Purchase of the Properties is contingent upon Agency Board consideration of an Affordable Housing Agreement based upon the agreed purchase price of the Properties with the use and the covenants, conditions and development costs required by the Agency.

The Property owners have said they do not wish to sell the properties separately and negotiations with the Burbank Housing Corporation have consistently been based upon wrapping the sale of both locations together. 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.

The Affordable Housing Agreement presented for Agency consideration is intended to accomplish the following: 1) extend below market interest rate financing to the Burbank Housing Corporation to purchase and rehabilitate the Properties; 2) provide security to the Agency for purchase and rehabilitation financing in the form of a Note secured by a First Trust Deed recorded against the Properties; and 3) place terms, conditions and covenants affecting housing operations.

Summarized below are the salient provisions of the proposed Affordable Housing Agreement, which sets forth the terms and conditions under which the Agency would assist the Burbank Housing Corporation purchase and operate the Properties.

The Affordable Housing Agreement requires the Burbank Housing Corporation to obtain the necessary land use approvals and entitlements and imposes rehabilitation standards set forth in the scope of development, the site plan and schedule of performance. Acting as the lead agency, the Agency has determined that, pursuant to the California Environmental Quality Act (CEQA), these Properties are statutorily exempt in accordance with Section 15280 of the State CEQA Guidelines pertaining to lower-income housing projects.

The scope of work entails treatment to the 18 rental units that make up the Properties. Work will include the demolition of three units at 2331 North Catalina Street: a duplex comprised of two studio units and a small one-bedroom single-family dwelling at the rear of the site that �is functionally obsolete [with] serious drainage problems.�[2] The remaining building at 2331 North Catalina Street is a single-family unit, which the Burbank Housing Corporation �is proposing to convert into � an activity center by adding square footage and reconfiguring the internal layout�[3] (Exhibit D). Rehabilitation of the remaining 14 rental units will entail the following work items:

� Remodel kitchens and bathrooms � specific improvements will focus on health and safety issues; however, work may include new counters, fixtures, cabinets and flooring;

Under the terms of the Affordable Housing Agreement, the Agency would lend the Burbank Housing Corporation $3.143[4] million in Low and Moderate-Income Housing Funds. The amount of the loan is tantamount to 95 percent of the $3.315 million development cost[5] and comprises three major components:

1) The purchase price of $2.494 million represents approximately 75 percent of the total cost of development and, when coupled with estimated relocation costs, is $2.599 million or 78 percent of development costs;

2) Direct costs for building rehabilitation of $701,000 or 21 percent of the total

� Conversion and expansion of a single-family dwelling into an activity center at a cost of $110,000.

The Burbank Housing Corporation is responsible for paying development costs exceeding the Agency�s loan. Any remaining funds are to be applied to the Agency loan balance.

If the costs associated with the proposed activity center are deducted, this is equivalent to $182,570 per restricted unit (the chart below points out the costs of development absent expenses linked to the activity center).

Financing for the acquisition of the Properties and any remaining funds to facilitate rehabilitation will be provided through a first trust deed with the Agency. It is important to note that the Properties� cash flow will be severely restricted because of reduced rental income from the loss of four units due to demolition or use conversion combined with below market rents.[6] Given the limited net operating income, financing for the acquisition of the Project would be provided by an Agency loan. The Agency loan of up to $3.143 million will be amortized at three percent simple interest and repaid annually through residual receipts shared equally with the Burbank Housing Corporation from the Properties� Net Profits, beginning April 1, 2006. Any remaining loan balance will be due and payable on April 1, 2061. At the time of completion of rehabilitation, any remaining loan balance will be applied towards reducing the Agency loan principal.

Net Profit is defined as the net cash flow from the Properties after payment of operating expenses and debt service on the bank loan. Operating expenses are inclusive of: 1) actual cash expenses to operate the Properties, such as maintenance and utilities and property taxes (for those units not eligible for property tax abatement from the County Assessor�s Office); 2) a Capital Replacement Reserve that is capitalized at $300 per unit per year; 3) a property management fee of the greater of $35 per unit per month; and 4) an operating reserve capitalized at two percent of gross rent after completion of rehabilitation. Operating expenses also entail a cash outlay of $51,700 annually to operate the proposed activity center.

The Burbank Housing Corporation believes that a share of the Properties� cash flow is adequate for its operating costs now that the Agency has agreed to refinance the debt on Burbank Housing Corporation�s properties in the Lake-Verdugo Focus Neighborhood. Supporting all operating costs from Burbank Housing Corporation�s other projects in the neighborhood from this one project would have been an excessive burden for the Properties. Later, when this project is completed and rents are stabilized, the Agency and the Burbank Housing Corporation may wish to consider an approach approved for the Lake-Verdugo Focus Neighborhood, whereby the disparate project agreements were combined under one loan document and regulatory agreement. In the meantime, staff has assisted the Burbank Housing Corporation finalize (per a recommendation from the Agency�s economic consultant, Keyser Marston and Associates) an operational strategy, the Burbank Housing Corporation Business Plan, that identifies the Corporation�s development/operating goals and quantifies the ongoing costs associated with achieving these goals.

The Burbank Housing Corporation is to fulfill to the Agency�s satisfaction all precedent conditions to the Affordable Housing Agreement, e.g., completing a tenant survey and submitting an acceptable Management Plan. The Management Plan must include a written tenant selection policy and a tenant participation plan. The written tenant selection policy and a tenant participation plan must incorporate for Agency approval a fair lease and grievance procedure, a plan for tenant participation in management decisions and an affirmative marketing plan. In addition, the Agency may require replacement of the manager or management company for poor performance and have right of approval of a new manager or management company.

In addition to describing the terms of sale and subsequent rehabilitation of the Properties, the Affordable Housing Agreement also governs key conditions for the long-term operation of the Properties that extend into perpetuity defined as the useful life of the land use controls but not less than 55 years.

Structured as a mixed-income project, the Burbank Housing Corporation is to restrict occupancy and rent at an affordable rate one apartment unit to a very low-income household (gross annual income not exceeding 50 percent of Los Angeles area family median income, as adjusted for household size), six apartment units to a lower income household (gross annual income not exceeding 80 percent of the Los Angeles area family median income, as adjusted for household size)[7] and seven apartment units to a moderate-income household (gross annual income not exceeding 120 percent of Los Angeles area family median income, as adjusted for household size).

Income Categories	One-Bedroom	Two-Bedroom	Total
Very Low	1	0	1
Low	6	0	6
Moderate	3	4	7
Total	10	4	14

The maximum monthly rental amount for the restricted residential units within the Properties shall be established by the Agency on an annual basis by written notice to the Burbank Housing Corporation, upon publication of annual median income limits by the United States Department of Housing and Urban Development at the following amounts:

� One unit will be affordable to a very low-income household. This unit will be considered as a HOME designated unit rented at the lesser of Low HOME rents under 24 CFR 92.252(b)(1) or Agency Very Low-Income rent defined under the State Health and Safety Code Section 50053(b)(2).

� Six units will be affordable to lower-income households. These units will be considered as HOME designated units rented at the lesser of High HOME rents defined under 24 CFR 92.252(a) or Agency Lower Income rents defined under the State Health and Safety Code Section 50053(b)(3).[8]

� Seven units will be affordable to moderate-income households. These units will be rented at Agency Moderate-Income rents defined under the State Health and Safety Code Section 50053(b)(4).[9]

The Burbank Housing Corporation is required to maintain the Properties in accordance with all applicable local codes, rehabilitation standards, ordinances and zoning ordinances and at a standard of maintenance commensurate to similar housing units within Los Angeles County (Section 307 of the Affordable Housing Agreement and Section 10 of the Regulatory Agreement). To guard against overcrowding conditions, the Affordable Housing Agreement also imposes an occupancy standard for tenants occupying units subsequent to the Affordable Housing Agreement that limits the one-bedroom household size to three persons (Section 306 of the Affordable Housing Agreement and Section 9 of the Regulatory Agreement) and two-bedroom units to five persons.

The Affordable Housing Agreement also provides for periodic inspections (Section 309 of Affordable Housing Agreement and Section 12 of the Regulatory Agreement). However, if the Burbank Housing Corporation fails to maintain the Properties, the Agency may abate the violation and attach a lien upon the Properties or assess the Burbank Housing Corporation (Section 307 of the Affordable Housing Agreement and Section 10 Regulatory Agreement). Again, the Agency has authority to require replacement of a property manager due to poor performance and to approve another property manager or property management company.

The Affordable Housing Agreement extends in perpetuity[10] and all of the terms, covenants and conditions are binding upon the Burbank Housing Corporation and any �permitted� successors and assigns. The Properties may not be sold, transferred, conveyed, encumbered to secure financing, assignment or lease without the prior written approval of the Agency, except for these permitted transfers: (a) the Agency subordinates its loan to accommodate financing (Section 106 of the Affordable Housing Agreement) or (b) the Properties are sold, transferred or assigned and the Agency�s restrictions related to housing operations described under Section 300 (income, affordability, occupancy, maintenance) are continued. Approval of sales, transfers or assignments would be restricted to only those proposed assignees or transferees demonstrating comparable operational experience and capability, who would be required to assume the obligations of the Burbank Housing Corporation under the Agreement and would be considered a Community Housing Development Corporation (Section 504 of the Agreement and Section 22 of the Regulatory Agreement).

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, open space 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 Fairview-Catalina Relocation Plan, which serves as the initial step in the tenant relocation process.

In conformance with State relocation guidelines, the City accepted a Draft Relocation Plan for the Properties on May 11, 2004, which was available for public review for 30 days before initiating any relocation activities, including issuance of 90-day notices to vacate. No public comment was received. The City is now asked to adopt the Fairview-Catalina Relocation Plan following the end of the 30-day public review period.

The Agency has requested assurance from staff that every step be taken to ensure households displaced during the project receive adequate assistance, both in advisory services and financial compensation. Clearly, the Agency is sensitive about having to displace any household, particularly for a project that will provide affordable housing. Staff believes that the proper perspective, though, is to recognize that renter households relocated from the Properties will have their lives improved by being moved from substandard residential units into standard, affordable dwellings of their choice.

As a general statement, all four households being displaced will be afforded all benefits under California�s Relocation Guidelines. This means that each �displacee� household will be offered various services, as described below and outlined in the Fairview-Catalina Relocation Plan (Exhibit B), and provided comparable housing owned by the Burbank Housing Corporation or units available in the private market. Of course, the Burbank Housing Corporation (under its tenant selection plan) gives preference to any household displaced by governmental action. Thus, any of these four households would be given the first opportunity to rent any available and comparable Burbank Housing Corporation unit at an affordable rate (that is, rent not exceeding 30 percent of a household�s gross income). If the household is now in an overcrowded unit (the Agency occupancy standard limits household size to two persons per bedroom plus one member), then a comparable unit would include additional bedrooms. Alternatively, had any of the four households been on the Housing Authority�s Section 8 Program waiting list (none are), then the household would have been given preference for a Section 8 voucher.

If the Burbank Housing Corporation does not have available units or if households opt instead to rent from the private market, then the Agency will fund their relocation assistance payments to rent or purchase on the private market. The affected households will essentially receive a relocation payment spanning a 42-month period calculated on rent at 30 percent of gross income. Additionally, Agency staff has noted in other projects that some displacee households prefer to escrow their relocation payments as a down payment for a dwelling, yet another option available to the Properties� displaced households. To that end, the Agency has budgeted $105,000 for relocation payments for households displaced or temporarily relocated during rehabilitation.

Among other services displacees may avail themselves include the option to (a) suspend their relocation payments and return to the Properties if a vacancy for a comparable unit occurs over the next 42 months or (b) be given priority in applying for any future Agency-assisted project. Agency staff will also coordinate with the Agency�s Consultant in providing advisory services, including explaining relocation rights and benefit options and offering households a list of comparable units. The Agency is also to pay for moving expenses for all households displaced or temporarily relocated due to rehabilitation.

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

The Relocation Plan notes that "There are eight adults and three children occupying the four households,� and 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.

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 that 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[11] replacement housing unit being available.

The 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, appeal 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�[12] 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:

There will be no direct fiscal impact to the City�s General Fund. A budget amendment is required to reallocate $3.248 million from the Low and Moderate-Income Housing Fund undesignated fund balance account 305.ND000.30004.0000 into the focus neighborhoods account 305 CD23A.70005.0000.13057. The Affordable Housing Agreement is underwritten by the Agency�s Low and Moderate-Income Housing Fund, which is required to be used to increase the supply of affordable housing.

RECOMMENDATION

q The Redevelopment Agency adopt the attached resolution approving the Affordable Housing Agreement with the Burbank Housing Corporation;

q The Redevelopment Agency adopt the attached resolution authorizing approving a $3.143 million budget amendment to the Fiscal 2003-04 budget; and

q The City Council adopts the attached resolution accepting the Relocation Plan for 2321 North Fairview Street and 2321-2323 North Catalina Street.

[1] 65 units in Elmwood Focus Neighborhood, 30 units in the Lake-Verdugo Focus Neighborhood, 77 units (after rehabilitation) in the Peyton-Grismer Focus Neighborhood and the current 29 units in the Golden State Focus Neighborhood.

[2] Burbank Housing Corporation proposal.

[3] Same

[4] The Agency is also to fund an estimated $105,000 in relocation costs for households displaced or temporarily relocated. When coupled with the cost of acquisition, the total costs of acquisition is $2.599 million or 78 percent of development costs.

[5] While not affecting the cost of development, the Site�s net operating income that could support conventional financing and consequently reduce Agency assistance is hampered by: (a) loss of rental income from four units due to demolition and use conversion; (b) placement of income covenants suppressing rents below market; and (c) increased operating costs for an activity center.

[6] All units will be suppressed for up to 42 months to avoid triggering relocation payments.

[7] While federal HOME Investment Partnerships Act (HOME) funds will not be provided, several HOME Program requirements will be included in the Affordable Housing Agreement, making the Properties a HOME eligible project and Agency Low and Moderate-Income Housing Funds a local HOME match source.

[8] Low HOME rent less the monthly allowance for utilities and services to be paid by each tenant is the product of thirty percent (30%) of fifty percent (50%) of Los Angeles County median income, as determined by the State of California, for a household size appropriate to the unit. High HOME rents less the monthly allowance for utilities and services to be paid by each tenant are the lesser of (a) the fair market value for comparable housing in the area as established by HUD, or (b) thirty percent (30%) of sixty-five percent (65%) of Los Angeles County median income, as determined by the State of California, for a household size appropriate to the unit.

California Redevelopment Law calculates very low-income rents less the monthly allowance for utilities and services to be paid by each tenant as the product of thirty percent of fifty percent (50%) of Los Angeles County median income, as determined by the State of California, for a household size appropriate to the unit and lower income rents less the monthly allowance for utilities and services to be paid by each tenant as thirty percent (30%) of sixty percent (60%) of Los Angeles County median income, as determined by the State of California, for a household size appropriate to the unit.

[9] California Redevelopment Law calculates moderate-income rents less the monthly allowance for utilities and services to be paid by each tenant as the product of thirty percent of 110 percent of Los Angeles County median income, as determined by the State of California, for a household size appropriate to the unit.

[10] Perpetuity is defined in the Affordable Housing Agreement as the life of the land use controls for the site, but not less than 55 years.

[11] The Relocation Plan stipulates that:

Comparable housing includes standards such as: decent, safe, and sanitary, comparable to the number of bedrooms, living space, and type and quality of construction of the acquired unit, but not lesser in rooms or living space than necessary to accommodate the displaced household; in an area that does not have unreasonable environmental conditions; not generally less desirable than the acquired unit with respect to location to schools, employment, health and medical facilities, and other public and commercial facilities and services; and within the financial means of the displaced household.

[12] Last Resort Housing Payments is calculated on the �difference over a forty-two (42) month period between the rent [the displaced household] must pay for a comparable replacement dwelling and the lesser of [the displaced household�s] current rent or thirty percent (30%) of [the displaced household�s] gross monthly household income.�

BURBANK REDEVELOPMENT AGENCY

Tuesday, June 15, 2004

Dennis A. Barlow, Agency Counsel/City Attorney

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

q Housing Element

q Implementation Plan

q Consolidated Plan

Burbank Housing Corporation Properties

Number of Units

3000-3030 Thornton Avenue

5

2331-2333 North Fairview Street

3

2325 and 2335 Fairview Street

7

2321 North Fairview & 2321-2323 North Catalina Streets

14

Totals

29

RECOMMENDATION