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Council Committee to Mull 5 Loan Agreements for Second Unit Accessory Dwelling Unit Pilot Program

Funds would develop five new and previously unpermitted projects

Published on Monday, April 19, 2021 | 5:54 am
 

The City Council Economic Development and Technology (EdTech) Committee will vote Tuesday on whether to recommend the City Council’s transfer $674,500 from the Inclusionary Housing Trust Fund to the Housing Department’s Fiscal Year 2021 Operating Budget, and will consider five loan agreements totaling $600,000 for accessory dwelling unit projects under the City’s Second Unit Accessory Dwelling Unit Pilot Program.

The Housing Department launched the Second Unit ADU Loan Pilot Program in 202O, with a budget totaling $674,500—$600,000 for loans, and $74,500 for third-party project management. The program is part of the City’s ongoing effort to create more housing in a City with a growing dearth of available and affordable housing.

“Through this affordable housing initiative homeowners are incentivized to create an accessory dwelling unit (ADU) to be operated as an affordable rental unit,” said the EdTech Committee staff report.

The program offers two options with financial assistance. Homeowners may  build an ADU through new construction or garage conversion, or may rehabilitate and bring up to code an existing unpermitted ADU.

The City’s selected ADU consultant, Design with Skill, will provide advice to homeowners in choosing the designers, builders, planners, and contractors for the ADU design and construction.

Design With Skill will also assist homeowners from pre-design to permitting to bid preparation, as well as  project oversight.

According to the EdTech Committee staff report, over 30 applications were received during the 30-day application window. Applications for new and unpermitted ADU construction projects were scored and prioritized based on location in Community Development Block Grant census tracts and property valuation thresholds.

Five loans were then approved for the following five homeowners:

  • Elizabeth Holle,560 Prescott Street Pasadena 91104

  • Jeffrey Hayden, 1181 Lincoln Avenue Pasadena 91103

  • Marcelo Bugarin, 681 E. Elizabeth Street Pasadena 91104

  • Carmen Lopez, 1295 N. Raymond Avenue Pasadena 91103

  • Hiida Menaklan & Robert Blakeley, 1552 Asbury Drive Pasadena 91104

The construction loans are subject to two loan options, according to the committee staff report.

 In the first option, new ADU Construction Loans up to $150, 000 would be 3-year loan terms with 1% simple interest. No payments would required for the term of the loan. Loan must then be paid in full through refinance prior to the end of the term, and the homeowner would agree to rent the ADU exclusively to Pasadena housing voucher tenants for seven years.

In the second option, which would apply to  Existing Unpermitted ADUs,  Loans up to $75.000, would have 20-year loan terms with 1% simple interest, and deferred payments for the first five years

In addition, the Loan must be paid in full prior to the end of the term, and homeowner’s household income cannot exceed 80% area median income

The Internal Housing Loan Committee previously recommended approval of the proposed loans, on March 18, 2021.

The Economic Development and Technology Committee will meet online Tuesday, April 20 at 4 p.m. The meeting is accessible at www.pasadenamedia.org

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