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6.E. - Page 2 of 16 <br />criteria, which the Council adopted in May 2018. Additional information on the Home For All initiative can <br />be found at https://homeforallsmc.org. <br />While creating new housing is generally difficult for numerous reasons, below market rate or affordable <br />housing is exponentially more difficult to create. Primarily due to the high price of land and the continually <br />escalating cost of construction over the last few years, each new affordable housing unit typically requires <br />a subsidy of several hundred thousand dollars. In 2019, producing affordable housing is even more <br />complicated because previous affordable housing funding sources have been reduced (tax credit funding) <br />or eliminated (Redevelopment funding). This reduction in funding has occurred during the same economic <br />cycle that land costs and construction costs have increased to historic levels. <br />The subject developments, 353 Main Street and 612 Jefferson Avenue, represent a key piece of Redwood <br />City's affordable housing strategy, new 100% affordable housing developments. The developers' funding <br />requests are attached to this report. If directed by Council (per the recommendation in the report), City <br />staff will prepare funding resolutions and affordable housing agreements for Council consideration when <br />City affordable housing funding is available. Affordable housing impact fees and AirBNB Transit Occupancy <br />Taxes are anticipated to be available by summer 2019. However, it is important that the applicants have <br />some funding assurances from the City at this time, as they work towards securing other funding sources. <br />Additional details about the projects and funding can be found in the Analysis section below. <br />ANALYSIS <br />Home for All Funding Guidelines <br />As noted above, the City hosted a number of community housing discussions in 2017 and 2018 in <br />conjunction with the "Home for All" process. The City Council staff report describing the Home for All <br />process in greater detail can be found in Attachment 1. One of the key "work products" that came out <br />this process was the establishment of criteria for funding affordable housing projects. The City Council <br />adopted the recommended criteria for allocating affordable housing funding: <br />1. Acquisition of existing multifamily housing for conversion to deed restricted affordable housing <br />2. New construction of affordable housing including site acquisition for development of affordable <br />housing <br />3. Acquisition and rehabilitation of existing multifamily housing for conversion to deed restricted <br />affordable housing <br />4. Rehabilitation of existing deed -restricted affordable housing <br />5. Refinance of existing deed -restricted affordable housing to preserve affordability. <br />While City staff and the City Council have stated that it typically preferable to complete a "Notice of Funds <br />Available" process to solicit affordable housing proposals, the City Council also recognized the funding <br />process moves quickly, and the City's process must therefore be flexible when exceptional opportunities <br />arise or when there is an extraordinary circumstance to produce or preserve affordable housing. This is <br />particularly the case when projects are approved and shovel -ready, and City funds are necessary to fill a <br />gap in project financing. As noted below, both of these projects have received their planning entitlements, <br />and are scheduled to break ground in 2019. <br />City of Redwood City 1017 Middlefield Road, Redwood City, CA. 94063 Tel: 650-780-7000 www.redwoodcity.org <br />111 <br />