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Agenda Item 5.

City Council Meeting

Meeting Date:	07/21/2020
FROM:	Bill Gallardo

Subject:

Discuss and Define a Policy Statement for the Use of Affordable Housing Funds

RECOMMENDATION

Consider options for the Senior Rental Subsidy Program and provide policy direction.

BACKGROUND/DISCUSSION

In 1989, the City of Brea received grant funding to begin a rental subsidy program to assist with rent for very low income senior citizens residing in Brea. When the grant funding ended, the City decided to continue the program with Redevelopment Agency 20% housing funds.

Over the years, hundreds of seniors have been helped by this unique program. Rental subsidies are paid directly to the landlord on behalf of the participant. The subsidy amount gradually increased over the years from $100 to $254 per month, per qualified participant.

When the State dissolved Redevelopment in 2012, staff stopped filling vacancies and accepting new applications in anticipation of the loss of redevelopment funding. Fortunately, staff was able to negotiate with the Department of Finance (DOF) to fund the program through tax increment revenues until the end of 2019. Subsequently, it was decided to wind down the program through attrition using the Affordable Housing Trust Fund (Fund 270).

At the time of the redevelopment dissolution in 2012, there were 116 participants in the program. Currently, there are 14 participants remaining. At this level, the annual cost of the program is $42,672 in direct subsidies.

The Affordable Housing Trust Fund has a balance of over $2,500,000. The main purpose of Fund 270 is to construct and/or acquire new affordable units.

The following are two options for Council's consideration:

Maintain the program as is, using Fund 270 to wind down through attrition until all participants have left the program.
Allocate more funding to the program, establish an appropriate funding source (if not Fund 270), and begin accepting new participants. (Due to the age of the program, new polices and procedures would need to be established to replace the outdated program currently in place.)

FISCAL IMPACT/SUMMARY

The current balance of Fund 270 is over $2,500.000. The current annual cost for the remaining 14 participants is $42,672. There is no impact to the General Fund.

Council is asked to provide staff policy direction on the future of the Senior Rental Subsidy Program.

RESPECTFULLY SUBMITTED:

William Gallardo, City Manager
Prepared by: Marie Dao, Management Analyst I
Concurrence: Tracy Steinkruger, Community Development Director