To: Honorable Chair and Commissioners
From: Vincent Smith, Community Development Director
Prepared By: Lark Ferrell, Housing Manager
TITLE:
Title
Valley Lodge Apartments Project-Based Vouchers
LABEL
RECOMMENDED ACTION:
Recommendationle
Adopt a resolution approving an award of 38 project-based vouchers to Burbank Housing Development Corporation for the Valley Lodge Apartments, a 55-unit affordable housing project located at 200 South Coombs Street, Napa.
Body
DISCUSSION:
The Housing Authority provides Section 8 rental assistance throughout the County of Napa. Typically, this rental assistance is in the form of Housing Choice vouchers which are tied to the tenant. However, HUD allows a housing authority to set aside up to approximately 20% of its authorized vouchers for a specific project (“project based vouchers” or “PBVs”). This means the PBVs are tied to a property rather than to a tenant. The Housing Authority’s Five-Year Annual Plan identifies funding PBVs as a strategy to expand housing opportunities for lower-income households.
PBVs have several advantages over Housing Choice vouchers. First, because the vouchers provide for higher rents than are typically received for rent restricted affordable units, PBVs typically allow an affordable housing developer to borrow a larger mortgage, which in turn helps fund development of the affordable housing or, in the case of permanent supportive housing projects, the higher rents help provide funding to pay for the costs required to provide supportive services for the project’s residents. Secondly, in a tight rental environment, such as currently exists in Napa County, tenants with vouchers often have a very difficult time finding housing. Because the Section 8 assistance is tied to the units, the tenants do not have to compete on the open market for units.
Burbank Housing Development Corporation (“Burbank”) is proposing to repurpose and renovate the 55-unit Wine Valley Lodge, located at 200 South Coombs Street, Napa, into Valley Lodge Apartments, a supportive housing project which would provide permanent affordable housing to formerly homeless referred through the County’s Coordinated Entry System (the “Project”). The Project would include 54 affordable units and one unrestricted manager’s unit. Twenty of the units would be set-aside for chronically homeless, 14 units would be set-aside for transitional aged youth (up to 24 years of age), and the remaining 20 units would be available for general homeless referrals. Abode Services and VOICES would provide supportive services to the residents. As the property is good condition, rehab work would primarily be to make ADA improvements and to add kitchenettes to the units.
The State recently approved approximately $18.1 million in State Project Homekey funds for the Project. The City of Napa has reserved $3 million in City’s Affordable Housing Impact Fee funds for the Project and recently submitted an application to the State Department of Housing and Community Development to provide $2.8 million in CDBG Disaster Recovery funds to the Project. This funding is being leveraged with up to $2 million in County housing funds and $1 million from Providence/Queen of the Valley.
The Developer has requested the Housing Authority provide 38 PBVs for the Project. All of these PBV units would be made available to homeless referred through the County’s Coordinated Entry System. The rent provided by PBVs would help the Project with paying for supportive services to the Project’s tenants.
The award of PBVs can be done on a competitive or non-competitive basis. Based on HUD regulations and the Housing Authority’s Administrative Plan, the Housing Authority may award PBVs on a non-competitive basis if a project meets certain criteria. Specifically, the project must have been chosen for other funding through a State, federal, or local competitive selection process, must be located outside a high poverty census tract and outside an area of minority concentration, and must expand the community’s supply of affordable housing. While the Project is located at the border of a census tract that HUD considers to have a minority concentration, staff has documented the Project qualifies for an exception on the basis that sufficient alternative housing options exist within the jurisdiction. Therefore, the Developer is eligible to apply non-competitively for PBVs for the Project.
Prior to the start of construction and the Housing Authority and Developer entering into a formal agreement for the PBVs, the Project must complete a federal environmental review, a subsidy layering review, and receive HUD approval. The Housing Authority would then enter into an Affordable Housing Assistance Payment Agreement (AHAP) with the Developer, or the limited partnership formed by the Developer for the Project to ensure the Project complies with all HUD requirements. Upon completion of the renovations, the Developer would enter into a 20-year Housing Assistance Payment (HAP) contract with the Housing Authority. Under the HAP contract, the Housing Authority would require that 38 of the units be rented through the Section 8 PBV Program with all referrals done through the County of Napa’s Coordinated Entry System. The Developer, County of Napa, and the Authority would enter into a Memorandum of Understanding for these units.
It is anticipated that this Project would be able to come online very quickly due to the availability of funding and the minimal amount of renovations required on the units. Therefore, it is estimated units would be ready for occupancy this summer.
FINANCIAL IMPACTS:
This action would allocate an estimated $721,000 in annual rental assistance over a 20-year period to be used for 38 units at the Valley Lodge Apartments. If the Housing Authority does not approve project-based vouchers for the Project, the same amount of rental assistance would instead be used to fund tenant-based vouchers. Therefore, no budget authority is needed for this action.
CEQA:
Staff recommends the Housing Authority, as the responsible agency, determine that the Recommended Action is exempt from CEQA pursuant to CEQA Guidelines Section 15301, which exempts existing private structures involving negligible expansion of existing use, and Section 15303, which exempts conversion of existing small structures from one use to another where there are only minor exterior modifications. The project is also exempt pursuant to Public Resources Code Section 21080.50, which exempts conversion of motels and hotels to transitional or supportive housing.
DOCUMENTS ATTACHED:
ATCH 1- Resolution
NOTIFICATION:
Notification was provided to Burbank and the County of Napa Housing and Homeless Division.