REPORT TO THE CITY COUNCIL
July 16, 2020
FROM: JENNIFER K. CLARK, Director
Planning and Development Department
THROUGH: THOMAS MORGAN, Manager
Housing and Community Development Division
BY: CORRINA NUNEZ, Project Manager
Housing and Community Development Division
SUBJECT
Title
Approve a $1,462,000 HOME Investment Partnerships Program, Community Housing Development Organization Agreement with Self-Help Enterprises for the construction of its proposed Annadale Phase II Single-Family Housing Project consisting of 22 affordable single-family homes on Annadale Avenue west of Elm Avenue in southwest Fresno (District 3)
Body
RECOMMENDATION
Staff recommends the City Council approve a $1,462,000 HOME Investment Partnerships Program (HOME), Community Housing Development Organization (CHDO) Agreement (Exhibit “A” - HOME CHDO Agreement and Exhibit “D” - Signature Page) with Self-Help Enterprises (SHE) for the construction of its proposed Annadale Phase II Single-Family Housing Project consisting of 22 affordable single-family housing units on Annadale Avenue west of Elm Avenue in southwest Fresno (Exhibit “B” - Project Location Map), of which 11 will be HOME CHDO-funded houses.
EXECUTIVE SUMMARY
On May 6, 2019, SHE was selected through a January 17, 2019, Notice of Funding Availability (NOFA) to receive $1,462,000 in 2019-2020 HOME CHDO funds for its proposed Annadale Phase II Single-Family Housing Project. SHE is a City-certified CHDO eligible to receive the HOME CHDO funding for its proposed Annadale Phase II Single-Family Housing Project.
BACKGROUND
On January 17, 2019, the Housing and Community Development Division released a NOFA for 2019-2020 HOME and CHDO funding for the development of affordable housing. In accordance with the City of Fresno Better Business Act, the proposed funding was issued through a Notice of Funding Availability and is therefore not subject to the Act process.
In response to the 2019-2020 NOFA, the City received five applications one of which was SHE’s Annadale Phase II Single-Family Housing Project. After preliminary underwriting, technical and program evaluation of the applications, the Annadale Phase II Single-Family Housing Project was determined to be one of the most viable projects and was therefore recommended to receive a 2019-2020 HOME and CHDO loan funds in the amount of $1,462,000.
SHE will enter into a HOME CHDO Agreement with the City for the $1,462,000 at 2% interest. Once the houses are constructed, SHE will transfer ownership of each parcel through escrow to a very low- to low-income homebuyer. Upon the transfer, the $1,462,000 in HOME CHDO loan funds will be proportionally conveyed to the 11 homebuyers as a second mortgage at 0% interest with a 30-year balloon due at loan maturity. Also upon transfer of the properties to the homebuyers through escrow, SHE will be released from any further obligation under the Promissory Note. Qualifying homebuyers occupying the houses will have an income from 60% to 80% of the Fresno area median income as determined annually by HUD.
On April 18, 2017, the City of Fresno Housing Successor Agency Board (Housing Successor) approved a Disposition and Development Agreement with SHE for its proposed Annadale Phase II Single-Family Housing Project. As such, the updated Surplus Land Act requirements do not apply to this property so long as the disposition is completed by December 31, 2022. The Housing Successor also approved the transfer of vacant land located in southwest Fresno to SHE for the development of the project. Other sources of funds include the City of Fresno HOME CHDO Program funds in the amount of $1,462,000, Federal Housing Administration home loan in the amount of $1,343,000 and Sweat Equity in the amount of $110,000. The estimated project cost is $2,915,000 (Exhibit “C” - Project Budget).
The 11 HOME CHDO-funded single-family houses will consist of four 3-bedroom/2-bathroom units with 1,100 sq. ft. and seven 4-bedroom/2-bathroom units with 1,450 sq. ft. SHE will utilize its “sweat equity” building technique and incorporate the City’s Universal Design elements into each house. The “sweat equity” method requires that each household member contribute at least 500 hours of “sweat equity” to help build their house and the other houses in the development. SHE will also provide homeownership training in the areas of home maintenance, home improvement, interior design, budgeting, and consumer awareness.
SHE has been a leading non-profit housing development organization in Fresno County since 1965 and continues to provide safe, decent, and affordable housing for lower income residents. Its mission is to work together with low-income families to build and sustain healthy homes and communities. Since its inception, SHE has assisted over
55,000 families achieve affordable homeownership housing. All of SHE’s newly built communities are located near amenities such as transit, shopping, banking, and services. Also, all of SHE’s new builds feature energy efficient appliances, gas stoves and ovens, a dishwasher, refrigerator and central heating and air.
Once the project is complete, the single-family homes will assist the City in meeting its affordable housing goals as identified in the Housing Element of the 2035 General Plan, Consolidated Plan, and HOME CHDO Program funding priorities for new housing development. The project is also expected to make a positive impact to the neighborhood by offering new, in-fill, quality, durable, affordable single-family housing.
The Housing and Community Development Commission reviewed this item on June 24, 2020 and recommended approval.
ENVIRONMENTAL FINDINGS
On March 17, 2017, pursuant to the California Environmental Quality Act (CEQA) guidelines, the proposed activities resulted in a Mitigated Negative Declaration. On June 17, 2017, the Fresno City Council approved a General Plan Amendment, Rezone, and Mitigated Negative Declaration environmental assessment for the project.
An analysis has been performed pursuant CEQA Guidelines § 15162 to determine whether subsequent environmental review is required for the Project. Based upon this analysis the following findings are made to support the determination that no subsequent CEQA environmental review is required:
1) No substantial changes are proposed in the project which will require major revisions of the previous Mitigated Negative Declaration due to the involvement of new significant environmental effects or a substantial increase in the severity of previously identified significant effects. 2) No substantial changes have occurred with respect to the circumstances under which the project was undertaken which will require major revisions of the previous Mitigated Negative Declaration due to the involvement of new significant environmental effects or a substantial increase in the severity of previously identified significant effects. 3) There is no new information, which was not known and could not have been known at the time of the previous CEQA Mitigated Negative Declaration.
Based upon these findings, it has been determined that no further CEQA environmental documentation is required for this project.
Additionally, on September 6, 2018, pursuant to the National Environmental Policy Act (NEPA) guidelines, a review of the project activities resulted in a Finding of No Significant Impact. The Housing and Community Development Division received authorization to use grant funds from the U.S. Department of Housing and Urban Development on April 20, 2020.
FISCAL IMPACT
The HOME CHDO Program funds for the proposed Annadale Phase II Single-Family Housing project were appropriated to the Planning and Development Department as part of its fiscal year 2021 Budget.
Attachments:
Exhibit A - HOME CHDO Agreement
Exhibit B - Project Location Map
Exhibit C - Project Budget
Exhibit D - Signature Page