REQUEST FOR HOUSING AUTHORITY ACTION
SUBMITTED TO: Honorable Chair and Board Members
SUBMITTED BY: Travis Hopkins, City Manager
VIA: Jennifer Villasenor, Director of Community Development
PREPARED BY: Charles Kovac, Housing Manager
Subject:
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Approve and Authorize Execution of the Third Amendment to the Affordable Housing Agreement and the Second Amendment to the Declaration of Covenants, Conditions and Restrictions to Extend Affordability Covenants by One Year for the Five Points Senior Villas Project
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Statement of Issue:
The Huntington Beach Housing Authority (“Authority”) is requested to approve a one-year extension of existing affordability covenants for the Five Points Senior Villas Apartments, a 164-unit senior housing community located at 18651 Florida Street (“Project”). The extension would maintain existing income restrictions on 48 units (32 very low-income and 16 low/moderate-income) through July 30, 2027. The extension has been requested by the property owner and would be implemented through amendments to the existing Affordable Housing Agreement and Declaration of Covenants, Conditions, and Restrictions.
Financial Impact:
There is no fiscal impact. Five Points Seniors, L.P. does not have an existing loan or financial obligation to the City.
Recommended Action:
recommendation
A) Approve the Third Amendment to the Affordable Housing Agreement by and between the Huntington Beach Housing Authority and Five Points Seniors, L.P.;
B) Approve the Second Amendment to the Declaration of Covenants, Conditions, and Restrictions by and between the Huntington Beach Housing Authority and Five Points Seniors, L.P.; and,
C) Authorize the Housing Authority Executive Director or their designee to execute the Third Amendment to the Affordable Housing Agreement, the Second Amendment to the Declaration of Covenants, Conditions and Restrictions, and all related documents necessary to implement the one-year extension.
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Alternative Action(s):
Do not approve the Amendments and let the affordability restrictions expire on July 30, 2026.
Analysis:
The action being requested is brought forward for consideration by the Huntington Beach Housing Authority, which serves as the housing successor to the former Huntington Beach Redevelopment Agency. Under State law, when redevelopment agencies were dissolved in 2012, housing assets and responsibilities, including monitoring and enforcement of long-term affordability covenants, were transferred to local housing successor agencies. In Huntington Beach, the City Council serves as the governing body of the Housing Authority.
The Five Points Senior Villas Project is one such legacy project. Developed in the early 1990s, the 164-unit senior apartment community at 18651 Florida Street includes 48 affordable units restricted to low- and very low-income households. These affordability restrictions were originally imposed through a 1991 Affordable Housing Agreement and a 1993 Declaration of Covenants, Conditions, and Restrictions (CC&Rs), both executed by the former Redevelopment Agency.
The original affordability period was 30 years, set to expire on July 30, 2023. In 2020, the Housing Authority approved amendments to extend the affordability restrictions by three years, through July 30, 2026. The current request is to approve a one-year extension, through July 30, 2027.
Although it is unusual for a private property owner to request a voluntary extension of affordability restrictions without seeking financial consideration, staff has confirmed that the owner’s request is motivated by two key factors:
1. Avoiding Disruption to Senior Residents: If no extension is approved, the owner would be required by State law to issue formal notices to residents about the upcoming expiration of the affordability period. Given the vulnerable nature of the senior population and the uncertainty that such notices can create, the owner has expressed a desire to avoid causing unnecessary confusion or concern, particularly if the affordability ends up being extended further in the near future.
2. Evaluating Long-Term Options: The owner has indicated they are actively evaluating the long-term future of the property and may bring forward a proposal that includes physical rehabilitation, restructuring, and a long-term affordability extension. The one-year extension provides time for those plans to be finalized and reviewed without allowing the existing affordability covenants to lapse in the interim.
The proposed amendments, a Third Amendment to Affordable Housing Agreement and a Second Amendment to the CC&Rs, were prepared by the City Attorney’s office and are included as Attachments 1 and 2. Approval of this request allows the Housing Authority to preserve 48 units of affordable senior units for at least one additional year, with no cost to the City and no new obligations created.
Staff recommends approval of the proposed amendments to ensure continuity of affordability restrictions while longer-term plans are developed.
Environmental Status:
This action is not subject to the California Environmental Quality Act (CEQA) as it is not a project. Pursuant to CEQA Guidelines Section 15378 (b), administrative activities that will not result in direct or indirect physical changes to the environment are not projects and therefore, not subject to CEQA.
Strategic Plan Goal:
Non Applicable - Administrative Item
For details, visit www.huntingtonbeachca.gov/strategicplan.
Attachment(s):
1. Proposed Third Amendment to the Affordable Housing Agreement by and between the Huntington Beach Housing Authority and Five Points Seniors, L.P. for the Five Points Senior Villas housing project
2. Proposed Second Amendment to the Declaration of Covenants, Conditions and Restrictions by and between the Huntington Beach Housing Authority and Five Points Seniors, L.P. for the Five Points Senior Villas housing project
3. PowerPoint Presentation