Adopted 2014-2021 Housing Element - Garden Grove

Housing Element Needs AssessmentAt-Risk UnitsOver the next 10 years (2014-2024), 21 assisted developments that provide 528 affordable unitshave expiring affordability covenants (Table 25). Affordability covenants in Garden Grove includedevelopments that hold a Federal Section 8 contracts and/or were financed with redevelopment setaside funds or federal programs (CDBG, HOME).One of these federally assisted developments at risk of conversion, Jordan Manor Senior Housing, isowned and operated by a non-profit organization. The owners have expressed that long-term use ofthis development as affordable housing is fairly secure. The Crystal View Apartments have anaffordability covenant that expires in 2013. The City will be entering into a new agreement that willextend covenants for another 15 years and increase the number of assisted units to 81 units.Jamboree Rose Crest also has an affordability covenant that expires in 2013 but is considered lowriskas it is owned and operated by a non-profit organization.As rental rates and fair market rents in Garden Grove are comparable, the risk of conversion islower because there is less incentive to convert to market rate because the gain will be nominal.However, several of the developments listed in Table 25 are owned and managed by privatecompanies, so the option to convert to market rate will continue to exist in the future. Furthermore,HUD offers funding priority for extending Section 8 assistance to housing for seniors and personswith disabilities. The City will continue to monitor the status of these at-risk units. Should a Notice ofIntent to opt out of the Section 8 program be filed, the City will ensure that tenants are properlynotified of their rights under California law.Preservation and Replacement OptionsPreservation of at-risk projects can be achieved in a variety of ways, with adequate fundingavailability. These include:• Transfer of ownership to nonprofit developers and housing organizations• Providing rental assistance to renters through other funding sources• Purchase affordability covenants• Refinance mortgage revenue bondsAlternatively, units that are converted to market rate may be replaced with new assisted multi-familyunits with specified affordability timeframes.Transfer of OwnershipTransferring ownership of the affordable units to a nonprofit housing organization is a viable way topreserve affordable housing for the long term and increases number of government resourcesavailable to the project. The feasibility of this option depends on the willingness of the owner to sell,funding sources to actually buy the property, and the existence of a nonprofit organization withsufficient administrative capacity to manage the property. The City can explore transfer ofownership options with potential agencies or organizations included in the State’s Department ofHousing and Community Development qualified entities list. The entities will be selected from theState’s list of qualified entities to acquire/manage affordable housing. Additionally, projects in whichall units are affordable, and not just a portion of units are affordable, can participate in ownershiptransfers more simply and are therefore more likely to be feasible.2014-2021 Housing Element 30 City of Garden Grove