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...:5: /. A - / REPORT To the Redevelopment Agency Board From the Executive Director April 11,2005 Subject Amended and Restated Disposition and Development Agreement (DDA) for First Community Housing's (FCH) proposal for 58-unit affordable housing project at EI Camino & Vera Avenue Recommendations It is recommended that the Redevelopment Agency Board ratify and approve the Amended and Restated DDA. Background On January 24, 2005, the Redevelopment Agency Board (the "Agency") approved a Disposition and Development Agreement (the "DDA") by and between the Agency and First Community Housing, Inc ("FCH") for the development of a 58 unit affordable housing project. Pursuant to the approved DDA, 100% of the units were required to be reserved for the rental and occupancy by low to very low income households, which is defined as income between 20% and 50% of Area Median Income (AMI) pursuant to HUD guidelines. Unfortunately, we have recently been notified by FCH that, in light of the Agency's lack of Article 34 authority, FCH will not be able to secure the additional state funding needed to complete the project unless the DDA is revised to reduce the number of required low to very low units. Specifically, in order to secure additional public assistance,' the number of required units affordable to low to very low households will need to be reduced from 100% of the units to 49%. The following describes the specific revisions needed and the reasons and ramifications related thereto. I. Agency's Lack of Article 34 Authority The Article 34 authority cited by FCH refers to Article 34 of the California Constitution which provides that a low-rent housing project shall not be developed, constructed, or acquired by any state public bodi until the voters of the city approve the project at an election. A low-rent housing project is defined as a housing project which would be affordable to persons earning 80% or less of the AMI (i.e. low or very low). Many public agencies have sought voter approval of ballot measures which merely state the maximum number of dwelling units a public agency may develop, construct or acquire over a period of time, but do not describe the location or design of the units, the source 1 A redevelopment agency is a state public body as defined in Article 34 SM:cje Redev Shêl'edI2005 Staff ReportslO4-2005/Amended FCH DDA