BOS Agenda Date :October 8, 2002

County of Santa Clara
Office of the County Executive
Office of Affordable Housing

CE09 100802

Prepared by: Susan Phillips
Acting Director, Office
of Affordable Housing
Submitted by: Jane Decker
Deputy County Executive
DATE:

October 8, 2002

TO:

Board of Supervisors

FROM:

V

Richard Wittenberg
County Executive

SUBJECT: Use of Redevelopment Settlement Agreement Revenues for Housing Purposes

RECOMMENDED ACTION

Consider recommendations relating to use of redevelopment settlement agreement revenues
for housing purposes.
Possible action:

a. Accept preliminary recommendations on the use of redevelopment settlement
agreement revenues for housing purposes,. _

b. Direct the Administration to report back to the'Boafd of Supervisors with specific
recommendations and a process.for:allocating,designated Rinds following Board action

Board of Supervisors; Donald F.

Blanca Alvarado, Pete McHu^^h, James T. Bo.allJr., Li.'^ Kniss

County Executive; Riclm.-'d Wittenberg
1

BOS Agenda Date :October 8, 2002

on the State budget impacts, the Board's Capital Workshop (scheduled for October 22,
2002) and on the receipt by Administration of the Office of Affordable Housing(O AH)
role and staffing recommendations prepared by the Enterprise Foundation. The
Administration will report back to the Board in early December.
FISCAL IMPLICATIONS

There is no impact on the General Fund as a result of this action.
CONTRACT HISTORY

None.

REASONS FOR RECOMMENDATION

While it is possible for the Administration to make some preliminary recommendations for
use of the redevelopment settlement agreement revenues, three issues preclude us from
providing a formal recommendation at this time.

First, the Enterprise Foundation interviews and analysis (which is discussed in greater detail
below) will provide the County with a better understanding of what non-County stakeholders
(nonprofit organizations, other jurisdictions, affordable housing developers) are looking for in
terms of support from a new County Office of Affordable Housing. The result of this work
will assist the Administration in structuring the new organization in a way which targets these
activities and supports the Board's concern that "special needs" clients be the primary
beneficiaries of County housing activities.

Second, until a staffing configuration for the new office is developed, it will not be possible to
evaluate how to structure federal program reimbursements and how much supplemental
funding (from the redevelopment revenues) will be required for ongoing staff and other
operational costs. At the least, a Director position and a staff support position will be required;
however, other changes in the organizational mission will drive staffing needs. These may be
met by targeted add/delete actions and may be achieved through reassignment of existing
staff, but it is premature to speculate now on what these changes might be.
so

Finally, the timing of the Enterprise Foundation work, which is expected to be completed in
late October, coincides with the Board's Capital Workshop oh October 22, 2002, and
.p‘ -

Beard of Supervisors: Donald F. Gage, Blanca Alvarado, Pete McHugh,James T. BeallJr., Liz Knisa
Count}'Executive: Richard Wittenberg
2

BOS Agenda Date :October 8, 2002

decisions on the County's FY2003 budget, both of which the Board has previously indicated
will influence the final decision on the activities of the new OAH and the funding available to
support those activities.

Based on the scheduled timing of these activities, it is anticipated that the Administration can
provide a full report to the Board of Supervisors in early December.
Preliminary Recommendations Regarding Use of Redevelopment Revenues
While a formal recommendation must await the events described above, it is possible to

provide preliminary information on what is likely to be the direction of the Administration's
recommendations, based on prior Board of Supervisors direction and meetings with
non-County stakeholders and County staff who are involved in the provision of housing
services to County clients.

If redevelopment revenues are allocated to housing, the County should focus most of its
resources on the provision of housing and services in areas which will reinforce and support
County programs in the Homeless Concerns, Social Services and Health and Hospitals areas.
These are the "special needs" issues which were the focus of previous Board direction. Failure
to address these critical needs will result in continued placement of County clients outside
Santa Clara County at considerable cost and with reduced program effectiveness.

Some existing programs require additional support to ensure that those County residents who
are most at risk for losing existing housing do not become homeless. One example of this is
the emergency rent assistance grants which are coordinated through the County's Homeless
Concerns Office. For a modest increase in support, large numbers of clients can be maintained
in affordable housing.

Housing specifically targeted to County clients can be incorporated into larger affordable
housing projects, thus benefiting from economies of scale and resulting in housing which is
dispersed throughout the County, where support services can be provided and where the client
base may be concentrated or may be underserved by existing housing activities. In order to
encourage development of this housing, the County has been advised that the largest gap in

governmental housing support is*a'ssistance in assembling property for housing construction,
provision of predevelopment grants-to cover the higher pisk, front-end activities (phase 1
environmental report, soils report, analysis of historic issues, noise studies, traffic studies and
O) -

:ui^or

Board of Supervisors: Donald R Gage. Blanca Alvarado, Pete McHugh, James T. Beall Jr., Liz Knisa
Countj' Exccutiv'c; Richard Wittenberg
3

BOS Agenda Date ;October 8, 2002

arborist studies) and acquisition deposits to hold property during the early predevelopment
planning work. Should the County establish a fund for affordable housing, part of the funds
could be earmarked for these specific activities and disbursed either as part of a yearly
allocation process or, more effectively, as part of a rolling allocation process based on
specified criteria.

The County may also support the purchase and retrofit of smaller, existing properties at risk
for conversion to higher cost housing, although this is likely to be less cost effective than
having a similar number of units reserved for County clients in a larger, managed complex. If
this approach is taken, it should be opportunity based, so as to take advantage of market
conditions.

One of the most effective ways to target the affordable housing need relates to providing land,
either through grant, sale or long term lease at low cost. Contract work through the County's
contract for support of the Mortgage Credit Certificate(MCC)Program continues to evaluate
the potential for using vacant public land in Santa Clara County for affordable housing. Data
which has been generated for this work includes both privately owned vacant land and

publicly owned vacant land and publicly owned land which has some improvement value (i.e.,
may be substantially underutilized). The County is also conducting its own internal review,
trying to determine which County surplus land may be appropriate for affordable housing
development or otherwise used to further the County's housing goals. As part of this analysis,
the different requirements for surplus land disposition (depending on the nature of ownership)
are also being reviewed.

All of these approaches will require the development of some very specific criteria for fund
allocation. In the case of the County's desire to address special needs, these will include the
County's ability to provide critical services to support those clients as well as the more
traditional requirements (e.g., geographic dispersal, access to transit, location near other
multi-family units, prezoning for high density residential use). Clearly, different criteria will
be required for construction funding than for service provision. Specific recommendations,
including a timeline for implementation, will be included in the Administration's December
report.
■p-njj.

Zmte

October 8,

On September 19, 2002, the Board of Supervisors' Housing, Land Use Environment and

Transportation Committee (HLUET)'^accepted this repdrt'^hhdTdrwa rded a favorable
43

Board of Supervisors; Donald F. Gage, Blanca Alvarado, Pete

JaincsT. Beall Jr., Liz ICniss

Countj' Executive: Richard Wittenberg
4

BOS Agenda Date lOctober 8, 2002

recommendation to the Board of Supervisors.
BACKGROUND

During the FY2003 Budget Hearings in June, 2002, the Board of Supervisors considered a
range of issues related to the creation of the new Office of Affordable Housing and
identification of funds to increase the supply of affordable housing and housing services in
Santa Clara County.
Office of Affordable Housing

Effective July 1, 2002, the Housing and Community Development Program (formerly in the
Environmental Resources Agency),the Office of Homeless Concerns and the Mortgage Credit
Certificate/Housing Bond Program (both in the County Executive's Office) were consolidated
into the Office of Affordable Housing(OAH), under the auspices of the County Executive's
Office. While the budgets of these units have been consolidated into one office, no changes in
staffing or operations have been made. These changes are on hold, pending completion of a
Housing and Urban Development(HUD)Technical Assistance grant-funded assessment by
the Enterprise Foundation and Board of Supervisors action to support staff positions necessary
to implement the expanded role of the new office.

In mid July, an executive manager, Susan Phillips, was loaned from the General Services
Agency to coordinate OAH activities with regard to follow through on the Board's direction
for program consolidation and report back. There is currently no specific timeline in place for
replacement by a permanent Director, as creation of new staff positions is on hold pending
results of the Enterprise Foundation work, salary ordinance amendments and appropriation
adjustments to support the additional staff positions, once identified.
Enterprise Foundation Analysis

The County is fortunate to have the assistance of the Enterprise Foundation in preparing an
analysis and implementation plan for structuring the new Office of Affordable Housing. This
work began in mid July and is scheduled for completion in late October. To date, interviews
have been completed with three members of the Board of Supervisors, County staff in the new
OAH,Social Services Agency staff, fourteen nonprofits, and many of the Santa Clara County

jurisdictions. Remaining to be completed are interviews \vith two Supervisors, staff in the
Health and Hospital System, seven cities, two,for-profit^;affordable housing developers and
six nonprofits.
iFer

4j

Board of Supervisors; Donald F. Gage. Blanca Alvarado, Pete McHugh, James T. Beall Jr., Liz Kniss
Counf>' Executive: Richard Wittenberg
5

BOS Agenda Date :October 8, 2002

The focus of this analysis is to define ways in which the new OAH can support the work of
those already involved in the provision of affordable housing and housing services, by
determining what current activities are perceived to be effective and what gaps in service and

support remain. The Administration is expecting some very preliminary feedback from the
Enterprise Foundation staff in late September, with a completed analysis and implementation
plan in late October.

Additional analyses and benchmarking related to other, related issues (e.g., regional housing
advocacy, land banking, and identification of ongoing sources of local public revenue to
support housing development to leverage existing federal-funded programs) are not currently
funded by HUD Technical Assistance grants. Development of a proposal for this work will
follow completion of the current Enterprise Foundation activities.
CONSEQUENCES OF NEGATIVE ACTION

None. The Administration will continue its work toward a December report to the Board of
Supervisors.
STEPS FOT.EOWTNCt APPROVAL

No action required following approval of this request.

October 8,200k

name

Helen Salyers

:ie ; 'umber

43

Board of Supervisors: Donald F. Gage, Blanca Alvarado, Pete McHugh, James T Beall Jr., Liz Kniss
Count>' Executive: Richard Wittcnbcig
6