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HomeMy WebLinkAbout1985 017 CC RESO1985 017 CC RESO;¢f4ç[ RESOLUTION NO. 85-17 A RESOLUTION OF THE CITY COUNCIL OF THE CITY OF BALDWIN PARK APPROVING HOUSING POLICY REPORT UNDER INTERNAL REVENUE CODE SECTION 103A AND DIRECTING ITS PUBLICATION RESOLVED, by the City Council of the City of Baldwin Park, California as follows: WHEREAS, Section 103A(j)(5) of the Internal Revenue Code of 1954, as amended, as implemented by proposed and temporary regulations of the Department of the Treasury, Section 6a.103A-2(1), requires the applicable elected representative of an issuer of qualified mortgage subsidy bonds to publish, after public hearing, a housing policy report; and WHEREAS, this Council is the applicable elected representative of the City of Baldwin Park which City proposes to issue in 1985 qualified mortgage subsidy bonds; and WHEREAS, this Council has received a draft housing policy report dated October 31, 1984, and has reviewed each and every part thereof and this Council has conducted a duly noticed public hearing; and WHEREAS, it is in the public interest and for the public benefit that said housing policy report be approved and published. NOW, THEREFORE, it is hereby ORDERED and DETERMINED as follows: SECTION 1. The City Manager of the City is hereby authorized and directed to prepare a summary of the comments made at the aforesaid public hearing and to include said summary as a part of the Policy Report Under Section 103A. SECTION 2. The report of the City of Baldwin Park entitled, Policy Report Under Section 103A," and dated October 31, 1984 is hereby approved with the inclusion of said summary of comments. SECTION 3. The Mayor of the City, as a member of this Council, is hereby authorized and directed to execute said report on behalf of this Council as the duly elected representative of the City. SECTION 4. This Council does hereby publish the Report by authorizing and directing the City Clerk, and the City Clerk is hereby so authorized and directed, to make said Report available in the Office of the City Clerk for distribution to the public. SECTION 5. The City Clerk of the City is hereby authorized and directed to file the Report with the Internal Revenue Service at the Internal Revenue Service Center, Philadelphia, Pennsylvania 19255, l APPROVED and ADOPTED this 6th rfay of March, 1985. A ATTEST-: / MAYOR /^ /f y/^-^ NDA L. GA^R, CITY CLERK BIB] 37672-U01 1985-U02 017-U02 CC-U02 RESO-U02 LI3-U03 FO2126-U03 FO10071-U03 DO10074-U03 C6-U03 RESO-U03 2/19/2003-U04 ROBIN-U04 1985 017 CC RESO;¢f4ç[ Resolution No. 85-17 Page Two STATE OF CALIFORNIA COUNTY OF LOS ANGELES) ss. CITY OF BALDWIN PARK I, LINDA L. GAIR, City Clerk of the City of Baldwin Park, do hereby certify that the foregoing Resolution was duly approved and adopted by the City Council of the City of Baldwin Park at a REGULAR MEETING AND CONTINUED PUBLIC HEARING of the City Council on the 6th day of March, 1985 by the following vote AYES: COUNCILMEN GIBSON, McNEILL, IZELL, KING AND MAYOR WHITE NOES; COUNCILMEN NONE______________________________________ ABSENT: COUNCILMEN NONE BIB] 37672-U01 1985-U02 017-U02 CC-U02 RESO-U02 LI3-U03 FO2126-U03 FO10071-U03 DO10074-U03 C6-U03 RESO-U03 2/19/2003-U04 ROBIN-U04 1985 017 CC RESO;¢f4ç[ CITY OP BALDWIN PARK Employer Identification Number POLICY REPORT UNDER SECTION 103A October 31, 1984 BIB] 37672-U01 1985-U02 017-U02 CC-U02 RESO-U02 LI3-U03 FO2126-U03 FO10071-U03 DO10074-U03 C6-U03 RESO-U03 2/19/2003-U04 ROBIN-U04 1985 017 CC RESO;¢f4ç[ CITY OF BALDWIN PARK HOUSING POLICIES REPORT REQUIREMENTS The Tax Reform Act of 1984 has added a new paragraph, Section 611, to the Housing Tax Law", Section 103A of the Internal Revenue Code of 1954. The new legislation requires any City wishing to issue Mortgage Revenue Bonds during 1985 or thereafter, must first adopt a Housing Policies Report during the year preceding issuance of the bonds. The content of the Report is summarized as follows. Contents Section 103A(j)(5) of the Act states that the Housing Policies Report shall include: i) a statement of policies and goals with respect to housing, development, and low-income housing assistance? ii) an assessment of compliance with the prior year's report? iii) an assessment of compliance with Congressional intent? and iv) a summary of the comments received at the public hearing on the report. POLICIES AND GOALS Housing Policies and Goals The California State Legislature has found and declared that; There exists within the State of California a serious shortage of decent, safe, and sanitary housing which is affordable to many persons in the state. This shortage is exacerbated during periods of rising interest rates, particularly as high interest rates have the effect of diminishing the number of otherwise creditworthy buyers from qualifying for private sector mortgage capital sources. In order to remedy this adverse effect on potential home buyers on the lower end of the purchasing spectrum, it is necessary to implement a public program to reduce the cost of mortgage financing for the single- family purchases for those persons unable to compete for mortgage financing in the conventional mortgage market. California Health and Safety Code Section 52001.) The California State Legislature has additionally found and declared that: It is necessary and essential that counties and cities be authorized to directly and indirectly make long-term, low-interest loans to persons not presently eligible for financing through private sector lending institutions to finance construction, rehabilitation, and acquisition of homes in order to encourage investment and upgrade local areas. California Health and Safety Code Section 52002.) BIB] 37672-U01 1985-U02 017-U02 CC-U02 RESO-U02 LI3-U03 FO2126-U03 FO10071-U03 DO10074-U03 C6-U03 RESO-U03 2/19/2003-U04 ROBIN-U04 1985 017 CC RESO;¢f4ç[ The City of Baldwin Park plans to issue qualified single family mortgage bonds the Bonds") in 1985 in furtherance of the above-stated policies of the California State Legislature and In conformance to the following policies and goals. Use of Proceeds The proceeds of the Bonds will be used to finance the acquisition of newly constructed single-family residences* Targeting of Proceeds to Housing Type The proceeds of the Bonds will be targeted to newly constructed single-family housing. Determination of Need for Targeting An estimate of the need for new housing in the City of Baldwin Park was established by the Southern California Association of Governments SCAG), which states: The estimate of future need during the 1983 to 1988 planning period is based on projections of population, household formation, demand created by employment growth and vacancy rate. The total estimated additional housing need for 1988 is 597 units. Of this housing need, approximately 23.1%, or 138 units, should be affordable to households making 80% to 120% of median income. Method of Targeting Proceeds The method used to target the Bond proceeds toward the purchase of newly constructed single-family housing will be the structuring of the Bond Program as stated in the Commitment Contracts to be entered into with the participating developers, pursuant to which the Developer will commit to the construction of a particular project and will be charged a participation fee. Other Pertinent Information Policies and goals related to Housing adopted as part of the City of Baldwin Park Housing Element of the General Plan January of 1984 include the following: * Identify adequate housing sites which will be made available through appropriate zoning and development standards and with public services and facilities needed to facilitate and encourage the development of a variety of types of housing for all income groups. * Address and, where appropriate and legally possible, remove governmental constraints to the maintenance, improvement, and development of housing. * Promote housing opportunities for all persons regardless of race, religion, sex, marital status, ancestry, national origin or color. To assist the private sector in meeting the projected housing needs of owner and renter households in the moderate, above-moderate and upper income groups, * Encourage neighborhood conservation and preservation programs. BIB] 37672-U01 1985-U02 017-U02 CC-U02 RESO-U02 LI3-U03 FO2126-U03 FO10071-U03 DO10074-U03 C6-U03 RESO-U03 2/19/2003-U04 ROBIN-U04 1985 017 CC RESO;¢f4ç[ Related Policies The Housing policies, which identify locations for housing, promote housing opportunities, and assist the private sector in meeting projected housing needs, are targeted through the City's Development policies which identify persons needing assistance and locations where development should occur. The Low-Income Housing Assistance policies utilize the Development and Housing policies and further focus on the City's need to specifically address the needs of this housing group. The result is a balanced supply of decent, safe and sanitary housing for all Income groups in a manner and location conducive to the general plan for the City of Baldwin Park. Development Policies and Goals The California State Legislature has found and declared that; There exists within the State of California a serious shortage of decent, safe, and sanitary housing which is affordable to many persons in the state. This shortage Is exacerbated during periods of rising interest rates, particularly as high interest rates have the effect of diminishing the number of otherwise creditworthy buyers from qualifying for private sector mortgage capital sources. In order to remedy this adverse effect on potential home buyers on the lower end of the purchasing spectrum, it is necessary to implement a public program to reduce the cost of mortgage financing for the single- family purchases for those persons unable to compete for mortgage financing in the conventional mortgage market. California Health and Safety Code Section 52001.) The California State Legislature has additionally found and declared that: It is necessary and essential that counties and cities be authorized to directly and indirectly make long-term, low-interest loans to persons not presently eligible for financing through private sector lending institutions to finance construction, rehabilitation, and acquisition of homes In order to encourage investment and upgrade local areas. California Health and Safety Code Section 52002.) The City of Baldwin Park plans to issue qualified single family mortgage bonds the Bonds") in 1985 in furtherance of the above-stated policies of the California State Legislature and in conformance to the following policies and goals: Targeting of Proceeds to Areas Bond proceeds will be targeted to specific projects identified within the City, for which Commitment Contracts must be entered into by the Developers to construct the project. There are not any targeted areas" under Section 103A within the City of Baldwin Park, therefore none of the proceeds are required to go to these areas. Description of Target Areas All of the bond proceeds will be utilized by developers yet to be selected. The Developers will construct new single family housing on sites under their control. There are not any targeted areas under Section 103A within the City of Baldwin Park, therefore none of the proceeds will to go to these areas. BIB] 37672-U01 1985-U02 017-U02 CC-U02 RESO-U02 LI3-U03 FO2126-U03 FO10071-U03 DO10074-U03 C6-U03 RESO-U03 2/19/2003-U04 ROBIN-U04 1985 017 CC RESO;¢f4ç[ Selection of Target Areas Sites will be selected based upon those developers who agree to comply with the City's Housing Guidelines and reserve funds for that purpose pursuant to the State of California Mortgage Bond Allocation statutes. Use of Targeted Proceeds The proceeds of the Bonds which will be targeted to the area described above will be used to finance new construction of single family homes. Other Pertinent Information Policies and goals related to Development adopted as part of the City of Baldwin Park Housing Element of the General Plan include the following; * Encourage the development of new housing units to meet the housing needs of all economic segments of the community, * Encourage the development of new housing for senior citizens, the handicapped and large families in new construction. * Encourage higher density residential development in appropriate locations based on the City's ability to properly provide utilities, street capacities, outdoor space for recreation and other normal public services. * Encourage development of lots which are either under-utilized or passed over in the development process. * Increase the potential housing supply by encouraging more efficient utilization of deep lots". Related Policies The Development policies, which identify persons needing assistance and locations where development should occur, focus the Housing policies to persons and places most appropriate. The Low-Income Housing Assistance policies utilize the Development and Housing policies and further focus on the City's need to specifically address the needs of this housing group. The result is a balanced supply of decent, safe and sanitary housing for all income groups in a manner and location conducive to the general plan for the City of Baldwin Park. Low-Income Housing Assistance Policies and Goals To insure that qualified mortgage bond issues assist lower income families to afford home ownership, California law provides that a city that administers a home financing program must establish criteria for qualification of persons and families for participation in such program. The criteria must include a maximum household Income, which maximum shall not exceed 150 percent of median household income defined as the highest of a) statewide median household income, b) county-wide median household income, or c) median household family income for an area as determined by the United States Department of Housing and Urban Development) for mortgagors who will be the first occupant of a home. California Health and Safety Code Section 52020(d).) 4 BIB] 37672-U01 1985-U02 017-U02 CC-U02 RESO-U02 LI3-U03 FO2126-U03 FO10071-U03 DO10074-U03 C6-U03 RESO-U03 2/19/2003-U04 ROBIN-U04 1985 017 CC RESO;¢f4ç[ The City of Baldwin Park plans to issue qualified single family mortgage bonds the Bonds") in 1985 in furtherance of the above-stated policies of the California State Legislature, with an allocation of entitlement funds and in conformance to the following policies and goalsx Targeting of Proceeds According to Income None of the proceeds of the Bonds will be targeted to low-income families and $20,000,000, less Bond issuance costs and Reserve Funds, of the proceeds of the Bonds will be targeted to moderate income families. Low-income families are defined as families earning 80% or less of median income; moderate income families are defined as families earning between 80% and 120% of median income. Median income is determined by the Secretary of Housing and Urban Development and means $28,800 Los Angeles County) as of January 1984. Method of Targeting Proceeds The method by which the proceeds will be targeted will be through a bond program income ceiling of 150 percent of the median income. Other Pertinent Information The purpose of providing housing for this income group is based on a combination of the City's established need and the State program requirements for single family mortgage revenue bonds, utilizing entitlement funds. Through the use of mortgage revenue Bonds a City can subsidize lower income families by lowering the monthly cost of buying a home, in turn making the house more affordable. Policies and goals related to Low-Income housing assistance adopted as part of the City of Baldwin Park Housing Element of the General Plan Include the following: Conserve and improve the condition of the existing affordable housing stock. * Assist In the development of adequate housing to meet the needs of low- and moderate-income households. To explore feasible methods of addressing the projected housing needs of very low- and low-income households. The City of Baldwin Park also has the following programs assisting low- and moderate- income households currently underway. A City funded Housing Rehabilitation Loan Program. HUD Section 8 Rehabilitation Program and rental assistance for existing housing and newly constructed housing. Community Development Block Grant program for public housing. HUD Section 202 housing assistance for elderly households. BIB] 37672-U01 1985-U02 017-U02 CC-U02 RESO-U02 LI3-U03 FO2126-U03 FO10071-U03 DO10074-U03 C6-U03 RESO-U03 2/19/2003-U04 ROBIN-U04 1985 017 CC RESO;¢f4ç[ Related Policies The Low-Income Housing Assistance policies focus on the City's need to address the needs of this housing group. The Development policies identify persons needing assistance and locations where development should occur, and the Housing policies identify locations for housing, promote housing opportunities and assist the private sector in meeting projected housing needs. The result is a balanced supply of decent, safe and sanitary housing for all income groups in a manner and location conducive to the general plan for the City of Baldwin Park. COMPLIANCE WITH PREVIOUS REPORT The City of Baldwin Park has not published a Policy Report Under Section 103A prior to this Policy Report. COMPLIANCE WITH INTENT OF CONGRESS On November 22, 1983, the Redevelopment Agency of the City of Baldwin Park Issued 1983 Home Mortgage Revenue Bonds in the aggregate principal amount of $7,500,000 1984 Bonds") in an effort to assist lower-income families to afford home ownership. They are referred to as 1984 Bonds as they were primarily available for use during the 1984 year. The following information is provided with respect the 1984 Bonds: Under the Bond Program, the Agency set aside funds to provide permanent financing for one-family condominium units the Project") within the City which had not been previously occupied. Method of Distributing 1984 Bond Proceeds The method the City used to target the proceeds of the Bonds was by restricting the use of the proceeds to the Puente-Merced Redevelopment Project. Bond money is distributed through a lender by the purchase of the mortgage loan originated on the property. The program mortgage rate is 10.65%, approximately 2.5 percentage points less than the rate for a conventional loan. Assistance to Lower-Income Families The proceeds of the 1984 Bonds assisted lower-income families before assisting higher- income families by limiting 90% of the participants to first-time homebuyers, all of the buyers to owner occupants, and the sales price to 110% percent of the average area purchase price. The units sold for between $65,900 to $85,000. In addition, the program offered a graduated payment buydown option whereby the buyer could qualify at a mortgage Interest rate of 7.65%, further allowing assistance to lower income families. Income Levels There were no maximum income restrictions in the Bond Program, however, due to the sales price of the units, the requirement for owner occupants, and the limitation to 90% first-time homebuyers, the proceeds primarily were used for low- and moderate income persons. 6 BIB] 37672-U01 1985-U02 017-U02 CC-U02 RESO-U02 LI3-U03 FO2126-U03 FO10071-U03 DO10074-U03 C6-U03 RESO-U03 2/19/2003-U04 ROBIN-U04 1985 017 CC RESO;¢f4ç[ SUMMARY OF HEARING COMMENTS A public hearing on the proposed Policy Report was duly noticed and held on March 6, 1985. The following comments were received: This report is submitted by the undersigned elected representative of the City of Baldwin Park. Mayor, City of Baldwin Park ATTEST: Ofty Clerk BIB] 37672-U01 1985-U02 017-U02 CC-U02 RESO-U02 LI3-U03 FO2126-U03 FO10071-U03 DO10074-U03 C6-U03 RESO-U03 2/19/2003-U04 ROBIN-U04