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6.E. - Page 3 of 16 353 Main Street In 2018, ROEM Development received Planning Commission and City Council (on appeal) approval for a new 125 -unit development at 353 Main Street. The approved development included 19 affordable units. Subsequent to the approval, the applicant (ROEM) and City representatives discussed converting this development to a 100% affordable development. After discussions with the County of San Mateo Department of Housing, the applicant (ROEM) decided to convert all the units in the development to affordable units. As now proposed, the development would include 62 low-income units and 63 very -low income units. In order to convert all of the units in the project to be affordable units, City, County, as well as tax -credit funding will be required. ROEM has requested $3.5 million of funding from the City, and approximately $7 million from the County of San Mateo. ROEM initially requested close to $6 million from the City, but the City does not have that level of funding at this time. In addition, to help with the funding process, ROEM received a $3.5 million short-term (up to 5 year) loan from Housing Endowment and Regional Trust (HEART) of San Mateo County, of which the City is a member. If granted by the City Council, the City funds would be used to pay off this short-term loan from HEART. In order to secure the additional funding necessary to construct and operate this housing development, ROEM must convert the short-term HEART loan to a longer-term loan. For affordable housing developments, loans are generally tied to the length of affordability associated with the project, typically 55 years for rental projects. The $3.5 million loan from the City would represent a subsidy of $28,000 per unit, a fraction of the subsidy usually required for affordable housing developments. The loan terms and other loan details will be provided when an affordable housing funding agreement and resolution are brought back to the Council for consideration. 612 Jefferson Street In 2017, Habitat for Humanity received approval from the Planning Commission and City Council (on appeal) for a 20 -unit, affordable housing development at 612 Jefferson. This project is a for -sale project. Future owners will contribute sweat equity into their homes, which will be made available at the low- income level to qualifying applicants. This project was the subject of a lawsuit from an adjacent property owner. While Habitat for Humanity was able to settle the lawsuit, the project was delayed. This delay has led to construction cost increases, which is the primary reason for Habitat requesting additional funds. The Council has committed $1,657,385 to this project per actions taken in 2015, 2016 and 2017. This includes $1,425,000 million in in -lieu fees (from the One Marina Development) and $232,385 in Community Development Block Grant (CDBG) funding. The subject funding request would be in addition to this amount bringing the total to $4,154,385 ($207,869/unit). It is expected that the contribution to Habitat for Humanity would also be structured as a long-term loan. The exact terms of the loan will be detailed in the affordable housing funding agreement and funding resolution. Status of Affordable Housing Fees In 2015, the Council adopted an affordable housing impact fee ordinance. This ordinance requires that market -rate residential development that doesn't fully provide affordable housing onsite, and all City of Redwood City 1017 Middlefield Road, Redwood City, CA. 94063 Tel: 650-780-7000 www.redwoodcity.ore 112