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REPORT <br />To the Honorable Mayor and City Council <br />From the City Manager <br /> <br />April 24, 2017 <br /> <br />SUBJECT <br />Funding Commitment to provide a Loan for Acquisition of Atherton Court Apartments to <br />Preserve and Create Affordable Housing <br /> <br />RECOMMENDATION <br />Approve by resolution a commitment to provide a loan to MidPen Housing of <br />$1,100,000 for the acquisition of the Atherton Court Apartments located at 3752-3770 <br />Rolison Road, Redwood City, contingent upon preparation and Council approval of loan <br />documents on or before February 1, 2018 based upon the terms as specified in the staff <br />report <br /> <br />BACKGROUND <br />On December 7, 2015, the City Council adopted the Affordable Housing Impact Fee <br />Ordinance (“Ordinance”) as a mechanism to increase the supply of and preserve <br />affordable housing pursuant to the City’s Housing Element. The Ordinance is generally <br />applicable to residential and nonresidential development projects deemed complete <br />after September 21, 2015. Based on applications that have been approved, there will <br />be a substantial amount (approximately $4 million) of funding available for affordable <br />housing causes available within the coming months. <br />The Ordinance requires that all fees collected be deposited into the City’s Affordable <br />Housing Fund to be used to increase and preserve the supply of housing affordable to <br />extremely low, very low, low and moderate income households. On October 10, 2016, <br />the Council Finance and Audit Committee held a meeting to discuss the use of <br />affordable housing funding. The Committee recommended to the full Council and to <br />City staff that existing apartment buildings be identified for preservation of housing. <br />This is typically done by partnering with non-profit housing providers, who acquire, <br />rehabilitate and make those units available for qualified low-income residents, many of <br />whom have lived in the apartment complex for years. This strategy has two key positive <br />aspects: 1) it preserves existing “naturally affordable” apartment complexes, many of <br />which in the region have been recently bought, rehabilitated and been subject to <br />substantial rent increases that existing residents cannot afford, and 2) it typically creates <br />deed restricted units at a much lower cost than the production of new units. <br />6.3.A. - Page 4