§ 4.54.240. Program details.

The following is a summary of programs that could be funded from affordable housing bond funds. The summary is illustrative only, and is not intended to be an exclusive list of programs or uses eligible for bond funding. The City Council or the City Administrator may authorize the use of affordable housing bond funds for programs and projects in addition to the programs listed below, subject to conformance with the provisions of this Chapter that set forth eligible expenditures, funding priorities, and income targeting.

Acquisition, Rehabilitation, and Preservation Program

Description:

Council Resolution No. 86125 C.M.S., passed on April 19, 2016, created the Affordable Housing Acquisition, Rehabilitation and Preservation Program. The program funds (1) loans to developers or owners of affordable housing to assist in the acquisition and/or rehabilitation of existing multifamily housing properties for use as affordable housing, (2) loans to developers of affordable housing to assist in the acquisition of land or nonresidential properties for development as affordable housing, and/or (3) loans to developers or owners of affordable housing to acquire and/or preserve restricted affordable housing or acquire affordability covenants on unrestricted housing that is otherwise affordable and in imminent risk of loss. The goal of the program is to preserve, increase, and improve the supply of affordable housing available in the City in part by assisting nonprofit and for-profit developers to remove properties from the market, renovate them, and restrict their rents or sales prices for long-term affordability. These funds can be used for property acquisition and holding costs, rehabilitation costs, and all soft costs associated with these processes, including without limitation environmental assessments, appraisals, legal costs, architectural and engineering expenses, and developer fees. Acquisition/rehabilitation funds can target a range of property types including small rental properties, small-to-medium properties, larger buildings, and single room occupancy buildings. Private property owners could participate in the program and obtain rehabilitation funds if they accept the 55-year or more affordability requirements.

Length of Affordability:

Affordability restrictions for the program would be set to the maximum amount allowed by law, but in no case less than 55 years. The City may require that participating owners grant the City a first right of refusal to purchase the property if the property is sold during the affordability period.

Income Target:

Projects receiving affordable housing bond funds under the program are required to target certain income levels within each project. At acquisition, all tenants will be able to stay in their homes regardless of income (tenant incomes are expected to range from very low income to moderate income). As existing tenants choose to leave and new tenants move in, property owners will be required to fill vacancies with lower income households at or below 60 percent of area median income for the Oakland area ("AMI"). Rents will be adjusted to be affordable to households who are at or below 60 percent of AMI until an average of 80 percent of AMI for the project is achieved. For homeownership, eligible buyers must be moderate income households or below. Projects with deeper affordability levels shall be prioritized. The City will establish a scoring mechanism in the application process that requires applicants to meet a certain threshold point level to qualify for funding. That point system will include significant weight for providing a viable plan for targeting extremely low income households within a reasonable period of time.

Loan/Subsidy Amount:

A loan of up to $150,000 per unit on average is projected; however, the per unit loan/subsidy amount for the program shall be periodically reviewed and revised accordingly to ensure feasible subsidy amounts that reflect current market conditions.

Rental Rehabilitation Program

Description:

The goal of the Rental Rehabilitation Program is to facilitate the physical improvement of rental housing in the City to ensure housing habitability for lower income households. This program seeks to expand and improve the existing federal, state and local programs by providing financial assistance in exchange for affordability restrictions on the rehabilitated units.

Length of Affordability:

Affordability restrictions for the program would be set to the maximum amount allowed by law, but in no case less than 55 years.

Income Target:

As existing tenants choose to leave and new tenants move in, property owners will be required to fill vacancies with lower income households at or below 60 percent of AMI. Rents will be adjusted to be affordable to households who are at or below 60 percent of AMI until an average of 80 percent of AMI for the project is achieved. The City will establish a scoring mechanism in the application process that requires applicants to meet a certain threshold point level to qualify for funding. That point system will include significant weight for providing a viable plan for targeting extremely low income households within a reasonable period of time.

Loan Amount:

A loan amount of $50,000 per unit on average for the building is projected; however, the per-unit loan amount shall be periodically reviewed and revised accordingly to ensure feasible subsidy amounts that reflect current market conditions.

Homeowner Rehabilitation Program

Description:

This program will assist lower income and senior homeowners living in substandard housing conditions and/or at risk of losing their homes due to deferred maintenance. Homeowner rehabilitation loans would be eligible uses for bond funds only if they fund improvements to real property. Further, appropriate policies would need to be developed to ensure long-term affordability with respect to the property.

New Construction Program

Description:

The purpose of new construction is to support the creation of new affordable rental properties, helping to create long-term affordability in a neighborhood.

Length of Affordability:

Affordability shall be maintained for at least 55 years based upon the industry standard or the requirements of leveraged financing sources.

Income Target:

Projects that are new construction generally shall serve lower income households at or below 60 percent of AMI.

Loan/Subsidy Amount:

A subsidy amount of $165,000 per unit is projected; however, the per-unit loan/subsidy amount shall be periodically reviewed and revised accordingly to ensure feasible subsidy amounts that reflect current market conditions.

(Ord. No. 13403, § 2, 11-29-2016)