COUNTY OF SANTA CLARA

OFFICE OF AFFORDABLE HOUSING

RECOMMENDATIONS

NOVEMBER 12,2002

PRESENTED BY;

I IThe Enterprise Foundation

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TABLE OF CONTENTS

SCOPE OF WORK

3

TASKS UNDER PHASE ONE

4

SUMMARY OF RECOMMENDATIONS

5

USE OF ADDITIONAL FUNDS

9

IMPLEMENTATION PLAN

13

ATTACHMENT A - INTERVIEWEES

14

ATTACHMENT B - ORGANIZATIONAL CHART

23

ATTACHMENT C - JOB DESCRIPTIONS

24

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SCOPE OF WORK

The County of Santa Clara requested assistance with implementation of
recommendations made by the Housing Task Force (HTF). These recommendations
included:

• Consolidation ofthree departments into one Office of Affordable Housing
(OAH)

• Developing a plan for county-wide participation of cities in the OAH and a
new County Housing Commission

• Working with county agencies (including the Housing Authority and Housing
Trust) to partieipate and work with the OAH.

The purpose ofthe OAH is to strategically coordinate and potentially enhance existing
county housing services and to seek opportunities for the county to contribute resources
to the creation of more affordable housing units using funding sources such as HOME.
The Task Force recommended special attention to the development of special needs
housing.

The technical assistance was divided into two phases. The first phase ofthe work is

presented in this document. In phase two The Enterprise Eoundation will assist the OAH
in addressing the recommendation to establish a County Housing Commission,
development of a plan for regional housing advocacy, development of a Land Bank and
identification of ongoing sources of local public revenue to support housing development
to leverage programs such as HOME. Under both phases an assumption is made that the
county would be able to use the 30% Redevelopment Agreement settlement funds for the
OAH and support for housing development.

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TASKS UNDER PHASE ONE

1) Develop a plan to consolidate three departments- HCD,Housing Bonds/MCC and
Homeless Services into the new OAH. The original goals of the OAH set forth by the
task force were to:

Play a more visible role in the affordable housing arena
Expand the number of housing units that are produced in the county
Assess possible surplus properties in the county that could be used for
affordable housing development

Centralize and coordinate housing services to special needs populations
Develop a single coordinating or advisory committee to replace the
committees now used by the three independent departments
Target affordable housing development funds more effectively
The process included:

• Evaluating the functions of each department
• Interviewing all current staff members to determine opportunities for
consolidation/coordination

•
•
•
•

Assessing the needs of the combined departments
Identifying overlapping functions among the three departments
Developing a plan for resulting OAH structure
Developing an implementation plan for the consolidation

Key to the success of the new OAH in meeting its stated goals is the participation of
cities and other county agencies in the development ofthe specific goals ofthe OAH. At
the same time Enterprise Foundation staff were working on the above plan, staff were
interviewed from the 15 cities, nonprofits, for profits, elected officials, and county

agencies to assess their needs and gain support/buy-in (see Attachment A for complete
list of interviewees). From these interviews a formal structure was developed for
implementing the OAH and longer-term participation ofthese entities with the OAH.

2) Make recommendations on how the 30% RDA settlement funds would be used to
support the development of affordable housing.

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SUMMARY OF RECOMMENDATIONS

First of all, many thanks to the county staff for being very open and receptive to this
process. All staff participated in the interviews and they were very honest and
forthcoming about what was working and made excellent suggestions for potential
changes. Many positive comments were heard from the cities, nonprofits and other
agencies about county staff.

Each ofthese recommendations are related to the goal of creating an Office of Affordable

Housing that is responsive, creative, coordinated and "deal making" oriented. When
talking with staff, other agencies and people in the community there were several key
messages. These ineluded a lack of communication and coordination between
departments, a slow cumbersome process and a lack of entrepreneurial spirit among some
areas. In addition, a lack of leadership on behalf ofthe county in the area of affordable
housing was identified by a majority of those interviewed.

This report starts with the re-organization ofthe department and then lists the specific
changes and positions with detailed rationale.
• Reorganize the office into functional areas. As shown in Attachment B, there is a
recommendation that the new Office of Affordable Housing be organized by function.
These functions would include Office Manager/Administrative Support,

Finance/Accounting, Homeless Concerns and Housing & Community Development.
In addition an analyst position would be added to support the work of the new
Director. Details for each area/recommendation are included in the bullet points to
follow.

Office Manager/Administrative Support - This area will include a new Office
Manager and all ofthe administrative support staff for the OAH. The Office
Manager will coordinate and direct support to the various departments. In addition,
the Manager will take back the Office Manager Coordinator(OMC)functions that
were distributed to various staff when the old OMC position was not filled.

Finance/Accounting - All ofthe finance/accounting functions would be centralized
into one area for the entire OAH. This area would also expand the types of

management reports provided to the various departments.
Homeless Concerns - There would be no changes to this area. Homeless Concerns

would continue to provide operating support for supportive housing and homeless
programs.

Housing & Community Development - All of the programs that provide funding and
support for affordable housing development would be under the Housing &
Community Development umbrella. This includes MCC/Bonds and the Housing
Trust Fund (HTF)of Santa Clara County contractor Loan Position.

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The goal of bringing all ofthe development programs/resources together is to

improve coordination and foster an environment more focused on the creation of
affordable housing and deal making.

• Create an OAH Strategic Plan. Having stakeholders (including staff) come together
and create a strategic plan based on the final blueprint for the OAH will help to make

sure OAH overall goals will be met. In addition, creating a plan together will help
each person take ownership ofthe new office. Once that strategic plan has been
approved, each person in the office should set specific yearly goals for themselves
with their manager/supervisor, linked to the OAH goals. Staff then have a better
understanding and commitment to the new plan for the OAH and their role in making
the goals ofthe OAH a reality. This plan should be spearheaded by the Board of
Supervisors in conjunction with key stakeholders (such as those interviewed for this

report). This plan should provide guidance for the type of activities the OAH should
undertake and give specific housing goals for each year. These goals should include
targets for the number and type of units to be developed. The plan should also
include performance benchmarks for all activities ofthe OAH. Creating an outcome
based strategic plan will be a key to the success ofthe new office, both internally and
externally. External audiences have an expectation that there will be tangible changes
and results as a result of the new OAH.

• Focus on outcomes. Internal and external sources feel that both H&CD and Homeless

Concerns could operate more strategically rather than in a reactive mode. Staff have
a number of activities that are mandated and therefore are forced to spend much of

their time meeting deadlines and preparing reports. Creating a strategic plan will help
focus the efforts of these departments. However working with staff to focus efforts
on strategic outcomes in all parts oftheir jobs will be key to implementing the
strategic plan. This includes working with boards and committees, staff and outside

parties. For example, when working with an advisory board, staff should determine

how the effort ofthe committee is linked to the strategic goals and develop agendas
and a workplan that directly relates to the strategic plan.
• Director. OAH - The Visionary. The Director should be a person who focuses on

housing policy, creates and moves forward a legislative agenda and coordinates
affordable housing development throughout the county (see recommendations from
external audiences). This person should have a strong management team that is
focused on the operational delivery of programs and funds. This will allow the
Director to focus on policy and legislation. This position should have high visibility
inside the county and therefore should report to the County Executive or be a part of
the senior management team. External audiences and staff felt that the director
should have some very specific qualities. These include an extensive knowledge of
affordable housing development, legislative knowledge and skills, an orientation
towards policy development, connections in the development communities, public
speaking skills, entrepreneurial leadership skills, political clout and consensus
building skills.

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• Housing Development Manager- The Deal Maker. Critical to the success of the new
office would be this position. This was a message heard from external/internal parties
and county staff. While the Director would focus on policy and legislative issues, the
OAH needs someone out there helping to broker deals and putting actual numbers to
policy goals. In addition, affordable housing developers need to have one person they
ean eome to at the county who knows the players, the programs and the financial
resources that are available. This person would strueture deals and then, more
importantly, make sure that there is follow through by the county in a timely manner.
By placing all of the development departments under this person - they are
empowered with the "purse strings" ofthe organization. A key element of making
this person successful will be to delegate authority to the Offiee of Affordable
Housing to make commitments on deals. This will require the support ofthe Board
of Supervisors in the form of consistent political support of the department decisions

or some type of delegated authority. Our recommendation is that the Board of
Supervisors set specific strategic goals for the department each year and empower the
staff to implement these goals.

• Office Manager Position. An organized offiee manager could help a great deal with
the efficient running of the OAH. Specific duties would include managing the
workload ofthe administrative staff, taking back the duties that were associated with
the former office management coordinator, supporting the efforts of the H&CD

Manager and provide support to the OAH Director. Additional staff added to the

OAH will create additional administrative work. When asked about additional

assistance or ways to improve efficiency, many of the program and aecounting staff
indicated that they have a significant backlog of filing and could use help developing
improved systems. This position would be key in creating organized filing systems
and their on-going management. The manager would also serve as a strong voice for
the administrative staff

• Pool the Administrative Staff. In eonjunction with filling the Office Manager

position, administrative staff would be pooled together in one department. With the
consolidation ofthe various departments, it makes sense to have a pool of staff that
can be drawn from when there are "crunch" times in all areas. In addition, there will

be inereased administrative support from the new positions and the work ofthe
Director. The administrative staff would continue to have primary responsibilities to

the areas they work with now, but they would be directly supervised and the
workload would be coordinated through the Office Manager.
• Hire a Policy Analyst. The Director will need extensive support if he/she is going to

take a leadership role in the county. This person can also provide support to the
various boards and commissions. The duties of this position would include creating a
set of common “truths” about the affordable housing needs in the eounty. Almost all
ofthe external interviews indicated that there needs to be one place where they ean

turn to get data and statistics on the affordable housing need in the county that
everyone agrees with. In addition, as legislative agendas are moved forward there
will be a need for research and analysis.

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• Move the accounting/Finance area out of H&CD. As this area supports the other

programs as well, it is appropriate to move this out of H&CD and have the accountant
report directly to the OAH Director. There are opportunities for increased use ofthe
accountant with regard to creating management reports for OAH staff. There would
be a potential for better use ofthe skills ofthe staff in this area. Our recommendation
to make H&CD focused on housing development deals also support this change. The
H&CD Director should not be focused on other functional areas such as accounting
or administrative support.

• Move MCC/Bonds under H&CD. Again, the primary reason for this change is to

coordinate housing development in one department. There was a concern from
external audiences that there was a lack of communication and coordination between

MCC and H&CD. These two areas directly support affordable housing development

through funding. By placing these areas together additional coordination will occur.
In addition, by working more closely together shared goals can be developed under
the strategic planning process.
• Hire One Additional Person in H&CD. There is a need for additional resources in the

H&CD area, especially in the HOME program. A recent HUD audit identified the
need to improve systems, tracking and monitoring of projects. The basic underlying
need comes in three areas. First, as the number of projects increases, the monitoring

and compliance needs of those projects grows as well. Each year more and more
projects are added to the list that needs to be monitored. The second area is the
ability of staff to think creatively in their jobs. If staff are overwhelmed with their
current workload - they will not have time to take on additional projects or to come

up with creative solutions for improving efficiency. Finally, the recommendation to
increase

the amount ofPR the OAH does will increase the workload of an already

busy staff If the additional funds are targeted to this area for funding special needs
housing, this work should be added to this position.
• Consolidate Loan Functions. There is an opportunity to bring together the loan

function that is currently contracted with the HTF of Santa Clara County and the loan
function in the rehab area. The HTF has set up an extensive database to process

loans. By having a position that takes on management ofthe loan processing for the
HTF and the Rehab Program there will be an opportunity to standardize loan

programs and documents. During our interviews, many staff expressed the need for a
database system that would serve all ofthe housing development areas. There is a
potential to leverage offthe existing database for the HTF and develop a larger
system for the entire office. The new position is listed as Loan Supervisor on the
organizational chart. Hopelully funds could be transferred somehow from the HTF of
Santa Clara County to pay for the majority of this position.
• Focus on Special Needs Housing. The Task Force report and both internal and
external audiences voiced a need for more Ilmding and coordination for housing for

special needs populations. Housing for special needs populations are currently
incidental to existing programs with some special needs housing being funded or
coordinated by other departments within the county. The new OAH should take a

more strategic approach to funding special needs housing (seefunding
recommendations section).

• Increase the level ofPR and training. With the added roles ofthe OAH - one very

important piece is outreach to the community. This includes providing training and
technical assistance to grant recipients and housing developers, as well as education
county staff, political leaders and the public about the programs offered by the OAH.
Housing fairs, training classes, speeches at various groups and organizations will all
be required to meet this goal. Public relations and training should be included in the
strategic plan for the new OAH.

• Boards and Commissions. One of the requested tasks was to analyze the various
boards and commissions that county staff support. There are a great number of these
boards and the thought was that there might be some overlap among these entities
which would allow for consolidation. This was started in September and we realized
that because ofthe number of boards, the task was greater than time would allow for
inclusion in this report. Therefore this topics will be addressed in the coming months
and a detailed analysis provided early in 2003.

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USE OF THE ADDITIONAL FUNDS

Assuming the newly formed Santa Clara Office of Affordable Housing has an additional
$6 million in funding per year for three (3) years - the following are recommendations
about how those funds should be allocated:

$300,000 - $350,000 in salaries for new positions including
• Director of the Office of Affordable Housing
• Housing Development Manger
• Office Manager

• Policy Analyst

• Management Analyst(in H&CD)

The remaining $5.65 - $5.70 million should be allocated as follows:
Special Needs Housing Fund

$4 million per year (estimate)

Pre-Development Fund

$250,000 per year (estimate)

Land Acquisition Fund

$1.5 million per year (estimate)

These programs are described in greater detail below:
SPECIAL NEEDS HOUSING FUND t$4 MILLIONA^EAR)

The County of Santa Clara currently provides funding, case management and supportive
services to over 4,300 special needs clients throughout the county annually. According to
the County’s Supportive Housing Initiative Report, “agencies are bearing a significant
and increasing burden because there are never enough beds or units to meet the need.
Front line managers and case managers are spending more oftheir days trying tofind
housingfor clients. Housing that is available is more costly both to the county and the
clients, meaning more service dollars and client dollars are being usedfor housing
rather than on services. The Continuum ofCare strategy ofthe countyfor serving

special needs populations is in danger ofcollapsing as more dollars are spent onfewer
units and consequently less service.”

In an effort to create more units of permanently affordable housing for special needs
populations, Santa Clara County should establish a Special Needs Housing Fund. These
funds should be used for a variety of types of special needs housing including group
homes and set-aside units for special needs populations in other affordable housing
projects serving both special needs populations and low-, very low- and moderateincome individuals and families.

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The Special Needs Housing Fund would provide a per unit subsidy based on # of
bedrooms. The per unit subsidy should be determined by an analysis of the amount
needed for projects ofthis type. For example the subsidy for units receiving funding
from the Special Needs Housing Fund could be as follows;

0 bedroom

$70,000 1-bedroom

2+ bedroom

$95,000 Group Home

$80,000
$250,000

4+ bedroom

Based on the above-suggested subsidy Santa Clara County could support the
development of45 additional permanently affordable Special Needs housing units per
year as follows:
14 studio/SRO/eff

@ $70,000 each

$ 980,000

13 1 bedroom units

@ $80,000 each

$1,040,000

10 2+ bedroom units

@$95,000 each

$ 950,000

4 Group homes

@$250,000 each

$1,000,000

The Special Needs Housing Fund will provide equity-like capital to projects and should
be designed to leverage federal and non-federal resources. The county should require
that the project sponsor secure a match, the amount of the required match should be
determined through an analysis oftypical subsidy needed to insure that the housing is
affordable to the special needs tenant. In order to meet the operational goal of
streamlining processes, developers could apply for funding from the Special Needs
Housing Fund by completing a 1 - 2 page addendum to any existing County of Santa
Clara application process including but not limited to application for HOME funds,
CDBG and ESG. Applicants not using any other Santa Clara County housing funding,
for example if Special Needs Housing Funds are being requested for a HUD Section 811
(Supportive Housing for Persons with Disabilities) project, the applicant could use the
addendum along with the County HOME Program application.
The Special Needs Housing Funds will be made available to a project that has all funding

commitments in place in the form of a long term loan that can be subordinated by all
other project funding. The loan will be structured to have repayment of75% of residual
cash flows after expenses and debt serviee. The loan can remain in effect throughout the
period where the property is maintained as affordable and targeted to the special needs
population originally intended at the time the property is put into service.

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PRE-DEVELOPMENT FUND (S250.000 PER YEAR)

Recognizing that the affordable housing development process begins long before
blueprints are approved, loan applications are filed or ground is broken, the Santa Clara
County Office of Affordable Housing will establish a Pre-Development Fund. Securing
funding for pre-development costs is extremely difficult the result of which is that
potentially viable projects often take years to navigate through the pre-development
phase because ofthe costs of getting the project to the point where resources are made
available. To foster a climate that supports an entrepreneurial approach to affordable
housing development the Pre-Development Fund will address the need for these types of
resources and ultimately generate additional units of affordable housing throughout the

county. Additionally by linking the Pre-Development Fund to strategic planning efforts
ofthe Office of Affordable Housing, the County of Santa Clara can establish priorities
both geographic and for certain types of housing and use the Pre-Development Fund to
encourage the type of development for which the county has established specific
priorities.

The Pre-Development Fund will be structured as a revolving loan fund providing seed

money of up to $50,000 per year to fund pre-development costs for eligible activities
including, but not limited to:

• Land options or escrow accounts related to real estate transactions
• Professional fees including legal, permitting, engineering, environmental studies,
appraisals, and loan/grant application packaging
• Salaries for staff time used exclusively for the project development

• Other uses as approved by the Santa Clara County Office of Affordable Housing.
The Pre-Development Fund awards will be structured as recoverable grants that must be

repaid by the housing developer within 60 days of receiving construction or permanent
financing for the project. Ifthe project is unable to obtain construction or permanent
financing within two years, the grant may be forgiven as determined on a case-by-case

basis by the Office of Affordable Housing. All awards returned to the Pre-Development

Fund will become part of the pool of funds available for future grants.

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LAND ACQUISITION FUND ($1.5 MILLIONA^EAR)

One ofthe primary barriers to developing affordable housing in Santa Clara County is the
lack of developable land. Furthermore, despite the downturn in the economy, the housing
market in Santa Clara County remains healthy, meaning competition for available land
continues to drive developers of affordable housing out ofthe market, in part because
they are unable to move quickly to secure parcels of land that do become available. In
establishing a Land Acquisition Fund, Santa Clara County is creating a tool that will
enable affordable housing developers to overcome this particular barrier.

The Land Acquisition Fund will provide funds to eligible developers for the acquisition
of land for affordable housing development. The county should make the Land
Acquisition Funds available with no specific funding cycle. Developers could apply for
funds whenever funding is available; enabling developers to move quickly on land
acquisition.

The Land Acquisition Fund will be structured as a revolving loan fund providing up to

85of acquisition costs for land for eligible, affordable housing projects. Funds will be
provided to the developer as a 1-year loan, with the ability to extend for up to two(2)
additional 1-year periods. The loan will have a 3% interest rate, deferred, and will
include a shared equity provision. The shared equity provision will be structured such
that once the project is developed, Santa Clara County’s equity share will be waived. If,
however, the project does not move forward and the land is sold, Santa Clara County will
realize a full equity share ofthe sales price ofthe land. {For example, if100% ofthe land

costs of$500,000 arefunded with countyfunds and the land is soldfor $600,000, the
county receives the entire $600,000. Ifonly 50% ofthe land costs of$500,000 are
funded with countyfunds, the county will receive the original $250,000 and /i ofthe
appreciation, or a total of$300,000.)

When the Land Acquisition Funds are repaid they become available for new land

acquisitions for eligible projects. By designating $1.5 million per year for three years the
fund will grow to more than $4,500,000 (once interest and shared equity are included).
With short-term repayment of 1 to 3 years, the Land Acquisition Fund should be selfsustaining by year three.

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IMPLEMENTATION PLAN

Given that the resources for this changes may come in to the department over a period of
time, we developed what we feel is the best strategy for implementing our
recommendations. Items are listed in chronological order.

TIMELINE

STAFF HIRES

YEAR 1

STAFF CHANGES

PLANS/PROGRAMS

Physically move all
staff into one area
OAH Director

Office Manager

Change reporting for
MCC/Bond and

Create Strategic OAH
Strategic Plan

Loan Supervisor

Develop Special
Needs Housing Fund

Housing
Development
Deal Maker

(contract person)
YEAR 2

Policy Analyst
Develop Land
Acquisition Fund

Housing
Development
Management
Analyst

Develop PreDevelopment Fund

YEARS

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ATTACHMENT A

INTERVIEWS COMPLETED

County of Santa Clara Board of Supervisors

Supervisor James T. Beall, Jr.
Supervisor Pete McHugh
Supervisor Donald F. Gage

Javier Aguirre for Supervisor Blanca Alvarado

City Housing and Administrative Staff

City of Palo Alto, Cathy Siegel
City of Campbell, Sharon Teeter, Bernard Strojny

City of Cupertino, Dave Knapp, Vera Gil, Dolly Sandoval
City of Gilroy, Jay Baksa, Marilyn Roaf
City of Los Altos Hills, Carl Cahill
City of Los Gatos
City of Milpitas, Felix Reliford, Gloria Anaya
City of Monte Sereno

City of Mountain View, Linda Lauzze, Adriane Garafalos
City of San JoseLeslye Corsiglia, Norberto Duenas, Vivian Frelix-Hart
City of Santa Clara, Jeffrey B. Pedersen, Geoffrey Goodfellow
City of Saratoga, Tom Sullivan, Lata Vasudevan
Non Profit and For Profit Affordable Housing Providers and Advocates

Builder, Barry Swenson

Affordable Housing Network of Santa Clara County, Phyllis Ward, Ron Johnson, Saul
Wachter

Charities Housing, Chris Block

Community Housing Developers, Ron Morgan, Bonnie Bamburg
Cupertino Community Services, Jaclyn Fabre
Emergency Housing Consortium, Emergency Housing Consortium
Housing Choices Coalition, Kris McCann
Housing for Independent People, Kristi Kesel
Mid-Peninsula Housing Coalition, Fran Wagstaff
Palo Alto Housing Corp., Marlene Prendergast

Self Help for the Elderly of Santa Clara County, Alison Tam, Helen Yen
Silicon Valley Manufacturing Group, Laura Stuchinsky, Shiloh Ballard
Working Partnerships USA,Bob Brownstein
Bridge Housing Corporation, Isaac Henderson, Kristy Wong
South County Housing, Dennis Lawler

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Housing Trust Fund, Paul Wysocki,
Housing Authority of Santa Clara County, Alex Sanchez,
County Agency Staff(Housing and non-housing)

Assessor, Larry Stone,

Santa Clara Valley Health and Hospital System, Robert Sillen and Janette Murphy
Social Services Agency, Frank Motta,
Jane Decker

Susan Phillips
Margaret Gregg
Joe Zenk

Lynn Terzian
Brandi Hoffman
Charlie Chew
Bill MeWood

Judy Borah
Anglea McCormick
Neena Battalones

Chrissy Field
Wendy Garcia
Thuy Huynh
Robert Rathbun

Tracy Cunningham

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Director - NEW
ATTACHMENT B

Homeless

Policy Analyst NEW

Office Manager

Accounting

Housing Development -

-NEW

/Finance

NEW

Concerns

Associate

Accounting

Assistant

Assistant

Adv. Clerk

Adv. Clerk

Typist

Typist

H&D - Program
Mgr.

Loan

Supervisor

Sr. Mgt.

Mgt.

Loan

Rehab

Bonds and

Analyst

Analyst(3)

Officer

Specialist

MCC

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