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REDEVELOPMENT AGENDA ITEM NO. 19

Meeting Date: January 8, 2008

Subject/Title: Adopt a Resolution approving and authorizing the execution of an Affordable Housing Grant Agreement by and between the Redevelopment Agency of the City of Brentwood and Habitat for Humanity East Bay and approving a grant in the amount of $14,017.51 to assist in the rehabilitation of one unit at 544 First Street, a duplex located in the Downtown Project Area

Prepared by: Donald Kwong, Senior Redevelopment Analyst

Submitted by: Howard Sword, Community Development Director

RECOMMENDATION
Adopt a Resolution approving and authorizing the execution of a Affordable Housing Grant Agreement by and between the Redevelopment Agency of the City of Brentwood and Habitat for Humanity East Bay and approving a grant in the amount of $14,017.51 to assist in the rehabilitation of one unit at 544 First Street, a duplex located in the Downtown Project Area.

PREVIOUS ACTION
On April 27, 1999 the Agency Board approved a Grant Agreement for $100,500 for the acquisition of property located at 540 & 544 First Street and payment of development fees in association with co-sponsoring an affordable housing duplex project with Habitat for Humanity.

BACKGROUND
Habitat for Humanity East Bay (Habitat) was founded in 1988 as an independent affiliate of Habitat for Humanity International. Since then, the organization has completed 185 self help housing units in Alameda and Contra Costa Counties. The eligible and selected households participate by providing sweat equity into the construction of their homes.

In 1999, the Agency participated in the construction of a duplex at 540 & 544 First Street. Prospective owners were selected by Habitat, and the owners contributed over 500 hours of sweat equity in the construction of their homes in exchange for a below-market purchase price.

One of the two households (544-A First Street) has moved out of state for a career opportunity and to be closer to family. Moving up the ladder of financial stability, securing career improvement and then making the unit available to another household are the fundamental goals of Habitat’s mission and the Agency’s affordable housing programs. This is the ideal success story.

The owners sold their home back to Habitat in accordance with their promissory note. Subsequently, Habitat has selected a local, income-eligible family to re-purchase the home and become first-time homeowners.

To protect the Agency’s investment in the unit, a City Building Inspector was sent to inspect the residence prior to re-sale of the unit to the new family. City staff found that the dwelling unit had a number of normal wear-and-tear repairs, some minor deferred maintenance, and an illegal garage conversion.

Habitat for Humanity East Bay is requesting a grant in an amount not to exceed $14,017.51 from the Redevelopment Agency in order to make repairs. In exchange, the period of affordability for 544 First Street will go from 30 years (which was the required length of affordability when the unit was originally constructed) to the current law requirement of 45 years. The benefit and addition of 15 years to the on-going affordability term is a considerable leverage of the cost of repairs and a significant return on the Agency’s investment. The $14,017.51 grant from the Redevelopment Agency will assist the Agency in meeting its housing production goals, and is considered an investment in sustaining and preserving the unit as a part of the Downtown neighborhood.

Proceeding with this project is consistent with the Redevelopment Plan and the Five-Year Implementation Plan to provide affordable housing.

FISCAL IMPACT
The cost of the project to the Agency is $14,017.51 and is included in the budget for fiscal year 2007/08 by the Agency’s Low and Moderate Housing Fund 302. The Low and Moderate Housing Fund is stable and healthy and can financially support the Habitat for Humanity East Bay 544 First Street project.

Attachments
Resolution
Affordable Housing Grant Agreement

AGENCY RESOLUTION NO.
RESOLUTION APPROVING AND AUTHORIZING THE EXECUTION OF AN AFFORDABLE HOUSING GRANT AGREEMENT BETWEEN THE REDEVELOPMENT AGENCY OF THE CITY OF BRENTWOOD AND HABITAT FOR HUMANITY EAST BAY, AND APPROVING A GRANT IN THE AMOUNT OF $14,017.51 TO ASSIST IN THE REHABILITATION OF ONE UNIT AT 544 FIRST STREET, A DUPLEX LOCATED IN THE DOWNTOWN PROJECT AREA
WHEREAS, to prepare an existing affordable unit for new ownership, Habitat for Humanity East Bay ("Developer") plans to rehabilitate the duplex unit known as 544 First Street (the "Project") by addressing routine wear-and-tear repairs and to bring the unit into compliance with the City Building Code, as may be amended or extended; and
WHEREAS, the Redevelopment Agency of the City of Brentwood (the "Agency") is carrying out the Merged Area Redevelopment Plan (the "Redevelopment Plan"); and
WHEREAS, the Agency has established a Low and Moderate Income Housing Fund for the Merged Project Area pursuant to Health and Safety Code Section 33334.3, and is authorized and empowered under the Community Redevelopment Law of the State of California, Health and Safety Code section 33000, et seq., and the Redevelopment Plan to use its Low and Moderate Income Housing Fund for the purpose of creating, improving and preserving the community's supply of low and moderate income housing; and
WHEREAS, in order to assist in the rehabilitation of the affordable Project, which will preserve the Agency’s supply of low-income housing and meet the Agency’s affordable housing mission and production goals, Agency desires to grant Developer the amount of $14,017.51.00 from its Low and Moderate Income Housing Fund pursuant to the terms set forth in the Grant Agreement between the Agency and Developer attached hereto (the "Grant Agreement"). The terms include the recordation of affordability covenants to ensure the long-term affordability of the Project by extending the current term of affordability from 30 years to 45 years.
NOW, THEREFORE, BE IT RESOLVED that the Redevelopment Agency of the City of Brentwood hereby approves the grant of $14,017.51 from the Agency's Low and Moderate Income Housing Fund to Developer pursuant to the terms of the Affordable Housing Grant Agreement attached hereto and authorizes and directs the Executive Director to execute the Grant Agreement, subject to any minor conforming, technical or clarifying changes approved by the Agency General Counsel. The Redevelopment Agency further authorizes the Executive Director to take all actions necessary to carry out the Affordable Housing Grant Agreement, including the execution of any attachments to the Affordable Housing Grant Agreement, subject to any minor conforming, technical or clarifying changes approved by the Agency General Counsel, and any other documents necessary to carry out the provisions of the Affordable Housing Grant Agreement.
PASSED AND ADOPTED this 8th day of January, 2008, by the following vote:
 
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