AgdaPkt 2016-12-12 Closed and Joint SA PFA

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6.3.A. - Page 71 Provide an assessment of units expected to be lost from the affordable housing inventory for any reason, such as expiration of Section 8 contracts. Two developments—St. Clare Apartments, and Redwood City Commons—have expiring affordability covenants during the next 10 years. St. Clare Apartments was acquired with CDBG funds, contingent on an affordability restriction until 2011. The related loans have been fully paid and as such, no affordability requirement remains. As St. Clare Apartments is owned and operated by a nonprofit organization with a mission to maintain and increase affordable housing, the risk of conversion for this project is considered low. However, Redwood City Commons is a 58 -unit affordable development for elderly residents, operated by a for-profit company. In 2013, the project owners signed a three-year Section 8 contract which expires in 2016. As the property is owned by a for-profit company, this property is considered to be at risk of conversion to market rate. Preservation of at -risk units can be achieved in a variety of ways, with adequate funding availability. State law requires that housing elements analyze options to preserve at -risk units and the related costs that would be incurred. Potential options include: • Transfer ownership to nonprofit developers and housing organizations • Seek rental assistance for renters through other funding sources • Restructure mortgage financing Consistent with State law, the at -risk analysis must also include an estimate of the total cost of producing new rental housing to replace the units that could change from low-income use. The following analysis applies these options to Redwood City's one at -risk project, Redwood City Commons. Does the availability of housing units meet the needs of the population? No. There are several indicators that demonstrate the supply of housing is inadequate including low vacancy rates in the rental market as well as overbidding situations in the real estate market. There have been numerous reports of residents with Section 8 vouchers not being able to find landlords willing to participate in the program since the market rates have increased to a point that make Section 8 unviable. This means that lower income households are paying far too much for housing, and may be severely overcrowded to make ends meet. Describe the need for specific types of housing: There is a need for the entire spectrum of housing for large and small families, and seniors particularly those in the extremely low, very low, low and moderate income groups. Over the past few years the private market has started building rental units rather than condominiums as was the pattern for the Consolidated Plan REDWOOD CITY 68 OMB Control No: 2506-0117 (exp. 07/31/2015)