County of Santa Clara
Office of the Board of Supervisors
County Government Center, East Wing
70 west Bedding street. 10th Floor
San Jose, California 951 lO
(408) 299-2323
FAX 298-8460 TDD 993-8272

THIS RELATES TO:
12/17/02(Item 43)
Supplemental Information #2

^4 CL

James T. Beall, Jr.

Supervisor. Fourth Distria

Board of Supervisors

To:

Supervisor James T. Beall, Jr.

From:

District 4

Supervisor Liz Kniss ^
District 5
Date:

December 16, 2002

Subject:

Agenda Item #43 - Report on Office of Affordable Housing Staffing and
Use of Redevelopment Set-Aside Funds.

I respectfully propose the following actions be approved by the Board of Supervisors:

A. Accept report on the Office of Affordable Housing status and funding.
B. Direct the Administration to proceed with staffing initiatives identified as Phase 1
actions and work with the Employee Services Agency to return to the Board on
January 14th, 2003 with recommended actions necessary to implement this
direction. At this time, Phase 1 should only include staffing recommendations for
the position of Director, Office or Affordable Housing and one analyst position.
C. Authorize the Administration to proceed with the physical consolidation of the
Office of Affordable Housing staff in leased space at 1735 N. First Street.

D. Direct the Administration to report back on January 14"^, 2003 with level of initial
redevelopment set-aside funds required for use by die Office of Affordable
Housing for a three-year operating plan, including housing initiatives, as directed

by the Board on June 10^^, 2002.

Add Free Peper

E, Finalize dedication of Redevelopment Set-Aside Funds for affordable housing.

Staff will report back on January 14th, 2003 with a year one funding plan. The
balance will remain set-aside for affordable housing.

Attachment 2

Office of Affordable Housing - Current Funding Sources

The following are non-General Fund sources of support for current Office of Affordable
Housing programs and activities.
• Housing Bond Trust Fund (Fund 0208)
This fund was established in 1991 with administrative fees and revenues from the

Housing Bond and Mortgage Credit Certificate Program. Application fees from

Mortgage Credit Certificates(MCCs)and Reissued MCCs(RMCCs),fees to lenders
who participate in the MCC and RMCC programs, and issuance and administrative
fees for housing bonds provide operating funds to support the contract-based MCC
program and administration of tax-exempt bonds. Almost $2.5 million has been
disbursed from the Housing Bond Trust Fund to affordable housing projects as loans
in $100,000 increments. It is estimated that the balance of the Housing Bond Trust
Fund will reach approximately $450,000 at the conclusion of FY2003.
• CDBG Program - Community Development Block Grant(Fund 0035)
This is an HUD formula-based program providing block grant funding to carry out a
wide range of community activities, including providing safe and secure housing,
revitalizing neighborhoods, supporting economic development and improving
community facilities and services. The County administers CDBG funds for the

Urban County -"non-entitlement" jurisdictions within the County whose populations
total fewer than 50,000. These jurisdictions are Morgan Hill, Saratoga, Monte

Sereno,. Campbell, Los Gatos, Los Altos, Los Altos Hills and Cupertino. Because

Cupertino has met the population threshold to become an entitlement jurisdiction, it
is expected to leave the Urban County group in the upcoming cycle. This funding
source allows 20% of the allocation to support administrative costs. Use of CDBG
funds is not restricted to housing programs. The Urban County allocation for the

current year was $2,584,000; of this, the County's share was $801,846 ~ $190,046
for project allocations which are obligated by Board action annually, $200,000 in
funding set aside for rehabilitation program services and $411,800 to cover County
administrative costs.

• HOME Program (Fund 0038)

This is a HUD formula-based program providing grant funding for housing

rehabilitation targeted to low and very low-income residents. Administration of this
fund is similar to the CDBG fund and allocations are approved by the Board in the

same funding process. This funding source allows 10% of the allocation to support
administrative costs. Use of these funds is restricted to housing programs. The

Urban County allocation for the current year was $1,043,000, which includes County
administrative costs.

Attachment 2, Page 1

Office of Affordable Housing - Current Funding Sources

• ESG - Emergency Shelter Grant(Fund 0034)
This is a HUD formula-based program for rehabilitation or conversion of buildings
into homeless shelters and funding of certain social services, homeless prevention
activities, operating expenses and administrative costs. Program administration is
handled through the HCD Program. The County allocation for the current year was
$91,000, which includes County administrative costs.

• Shelter Plus Care (Fund 0032)

This is a HUD program to provide rental assistance and continuum service support
for people with disabilities. Program administration is handled through the Housing
Authority, with County program coordination through the Homeless Concerns
Program. This program allows 8% of the allocation to support administrative costs,
which is shared between the Housing Authority(6%)and the County (2%).
• Revolving Loan Program - Single Family (Fund 0036)
This fund was established to capture loan repayments from the CDBG program.

Loan proceeds are used for single family housing rehabilitation and is administered
by the HCD Program. Loans are reviewed and approved by a County loan
committee, comprised of staff from the Finance Agency, General Services Agency
and County Executive's Office. This funding allows 20% of the allocation to support
administrative costs. The fund balance (as of June, 2002)totaled $766,507.
• Revolving Loan Program - Multi-Family (Fund 0029)

Like the Single Family Revolving Loan Program, this fund was also established to
capture loan repayments from the CDBG program. The program has been closed
by HUD; however, the County has the flexibility to continue to use the program funds
as matching funds under the HOME program rules and/or as a match for any CDBG
eligible activities. The fund balance (as of June, 2002) totaled $516,437.
• CALDAP Earthquake Loan (Fund 0252)

This was a State program to rehabilitate owner-occupied and rental properties

damaged in the Loma Prieta earthquake. The program is now closed. The fund
balance represents reimbursements to the HCD Program for expenses incurred in
Loma Prieta staff response. Use of these funds is not restricted. The fund balance
(as of June, 2002) totaled $311,568.
• Low and Moderate Income Housing Fund (0209)
This fund was established in 1979, when the Board approved the Density Bonus

Program. This program permitted a 10% increase in density for subdivisions in
which 10% or more of the units are devoted to low or moderate income housing.
The additional "affordable" lots can be sold at fair market value and the proceeds

deposited in the Low and Moderate Income Housing Fund. In 1999, it wds reported
to the Board that activity in this program had ceased, after roughly ten subdivisions
participated in the program. Historically, these funds have been allocated by the
Board to supplement CDBG-funded projects for housing and housing services. The
fund balance (as of June, 2002)totaled $497,242.
Attachment 2, Page 2

Office of Affordable Housing - Current Funding Sources

• Stanford Affordable Housing Trust Fund (Fund 289)

This is a recently-established fund, relating to the General Use Permit for Stanford
University. The GUP requires that, for every 11,763 square feet of academic
development, one affordable housing unit be developed or a cash in lieu fee of $15
per square foot of development be paid into this fund. The June 2002 fund balance
totaled $85,772; another $50,720 will be deposited into this fund prior to the end of
FY2003. These funds must be used for affordable housing projects located within 6
miles of the Stanford Campus.

Attachment 2, Page 3

Office of Affordable Housing - Current Funding Sources