City Committee to Consider Loaning Affordable Housing Provider $977,000

The Economic Development and Technology Committee will take up a proposal that the City loan a local nonprofit affordable housing provider funds to help buy three low-cost units to be resold to first-time homebuyers.

The plan will be considered when the Committee meets on Tuesday, February 21, for its regular monthly meeting. Depending on the subsequent action, the committee will then take it up to the City Council by February 27.

In the proposal,Pasadena’s Department of Housing and Career Services advocates the City to extend a loan not exceeding $977,000 to Heritage Housing Partners (HHP) so it can acquire three affordable homeownership units at the Fair Oaks Court Development, and resell them to qualified first-time homebuyers.

Housing and Career Services Director William K. Huang is recommending to the City Council this month, through the Economic Development and Technology Committee, that it approve a Housing Acquisition Loan Agreement with HHP for the amount, which by a budget amendment could be appropriated from the Inclusionary Housing Fund balance that’s in the Housing Department’s fiscal year 2017 budget.

When the recommendation is approved, the City Manager will have the authority to execute all documents necessary to proceed with extending the loan to HHP.

Fair Oaks Court is a 43-unit homeownership project at 588 to 608 N. Fair Oaks Avenue developed by HHP in 2008 with the City’s financial assistance. Thirty-seven of the units are affordable housing that have been sold to low and moderate income families through second trust deed homebuyer assistance loans. The affordable units are deed restricted and grant the right of first refusal (ROFR) to HHP and the City to purchase the property when the homeowner decides to resell.

Three owners of the affordable units recently notified the City and HHP of their intent to resell for various reasons, mostly to relocate, and HHP promptly submitted an acquisition financing request in January for $977,000 to cover the total acquisition cost for the three units.

The Housing Department said HHP is an experienced housing organization with a strong track record in developing, marketing and selling affordable ownership housing, and has fully repaid acquisition financing earlier extended by the City.

Huang said HHP also has an interest list of over 1,350 income-eligible households that are waiting for the opportunity to own a home in Pasadena.

About the transaction’s fiscal impact once approved, Huang said the action will reduce the Inclusionary Fund balance to about $1.53 million in non-earmarked funds available to new project commitments. According to the proposed terms of the loan agreement, HHP shall repay the City from resale proceeds when the three properties are purchased by qualified homebuyers.

At the Economic Development and Technology Committee meeting, Huang and Planning and Community Development Director David Reyes are expected to report on the outcomes of the Biannual Housing Workshop in Pasadena and of the Planning Commission meeting that discussed the General Plan’s Housing Element and its implementation.

Huang will also report on proposed amendments to the City’s Tenant Protection Ordinance, which requires landlords to pay qualified tenants – meaning tenants in good standing – a relocation allowance and a moving expense allowance if they are required to leave rented property under certain circumstances.

The Economic Development and Technology Committee meeting starts at 5:30 p.m. at the City Council Chambers, Room S249 at City Hall.