To: Honorable Mayor and Members of City Council
From: Steve Potter, City Manager
Prepared By: Stephanie Gaul, Housing Manager
TITLE:
Title
3875 Jefferson Street Housing Project Update
LABEL
RECOMMENDED ACTION:
Recommendation
Receive an update on the City-owned property at 3875 Jefferson Street and a presentation by the Housing Land Trust of the North Bay’s Executive Director, Dev Goetschius, on the housing land trust model and provide staff direction on whether to pursue the land trust model for affordable housing development on the site.
Body
DISCUSSION:
In October 2022, the City Council authorized a Purchase and Sale Agreement to acquire the approximately 2.75 acre property located at 3875 Jefferson Street (“the Property”) for the future development of affordable housing. Upon completion of due diligence investigations, the City acquired the Property in March 2023. The Property was acquired utilizing Transient Occupancy Special Tax for Affordable and Workforce Housing funds with the intent that the future project could serve households earning up to 120% of area median income (AMI).
Since the acquisition, staff has been working to secure a contractor to demolish the existing structures in order to facilitate the future development of the site. Demolition of the existing structures is expected to commence by November 1, 2023.
The City intends to issue a Request for Proposal (RFP) in the coming months for developers to propose an affordable housing project on the property. Upon review and ranking of the responses to a RFP, and prior to entering into an agreement with a developer, City Council will be required to adopt a resolution declaring the property as surplus exempt under Government Code Section 54221(f)(1)(F) in accordance with the Surplus Lands Act. To qualify for this exemption, the City would have to put the Property out to open, competitive bid, and all of the units in the housing development would have to be restricted for occupancy by low and moderate income households (up to 120% of Area Median Income) for a minimum of 45 years, with at least 75% of the units restricted to lower income households (up to 80% of Area Median Income).
The City Council has previously voiced questions regarding tools available to help alleviate the housing cost burden and provide generational wealth building opportunities. One of the tools to homeownership that is gaining national attention is the land trust model. Under this model, the homeowner only owns the home itself and does not own the land the home sits on. Rather, the land trust steward owns the land and ground leases it to the homeowner. Both the land and the home are restricted by recorded covenants to ensure their affordability, and if the homeowner decides to sell the home, the land trust steward finds and qualifies the new buyer and assists with the sale of the home. Therefore, if the City were to use the land trust model to develop the Property, the City would transfer the Property to a land trust steward, who would then enter into a long-term ground lease with the individual homeowners. The City and land trust steward would also enter into a deed restriction, which would be recorded against the Property to ensure its use for affordable housing.
The non-profit Housing Land Trust of the North Bay (HLT) has been a land trust steward in Sonoma County for more than 20 years.
Dev Goetschius, the Housing Land Trust of the North Bay’s Director, will provide a presentation on the land trust model as an affordable housing tool.
Upon receiving the presentation, staff is seeking direction from City Council on whether to pursue the land trust model for development of the Property. If Council provides direction to staff to pursue the land trust model, staff would prepare and issue an RFP for development of affordable housing on the Property that requires the housing developer to incorporate the land trust model into the development and partner with a land trust steward, subject to approval by the California Department of Housing and Community Development as to the surplus exemption determination.
FINANCIAL IMPACTS:
None.
CEQA:
The City Manager has determined that the Recommended Action described in this Agenda Report is not in-and-of-itself a “project” (pursuant to CEQA Guidelines Section 15378) since it does not result in a physical change in the environment. However, the Recommended Action is a part of a larger “project” that will be subject to environmental review in accordance with CEQA at the “earliest feasible time” prior to “approval” consistent with CEQA Guidelines Sections 15004 and 15352. The larger “project” is execution of an agreement with a developer for the transfer and development of the property for affordable housing, and staff plans to bring back a CEQA analysis of that project to Council prior to Council’s approval of such an agreement.
DOCUMENTS ATTACHED:
None.
NOTIFICATION:
None.