Adopted 2014-2021 Housing Element - Garden Grove

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Housing Element Needs AssessmentRental AssistanceTable 26: Market Value of At-Risk ProjectsTotal Units in At-Risk RentalUnitsDevelopments0-bdrm 411-bdrm 2662-bdrm 1523-bdrm 69Total units 528Annual Operating Costs ($2,131,500)Gross Annual Income $7,321,824Net Annual Income $5,190,324Market Value $57,093,5641. Median Rent: 0-bed = $675, 1-bed = $925, 2-bed = $1,450, 3-bed = $2,0502. Average Size: Studio = 500 sqft, 1-bed = 650 sqft, 2-bed = 800 sqft, 3-bed = 900sqft3.4% vacancy rate and annual operating expenses per square foot = $5.004. Market value = Annual net project income * multiplication factor (ratio of theprice of a real estate investment to its annual rental income)5. Multiplication factor for a building in moderate condition = 11State, local, or other funding sources can be used to provide rental subsidies to maintain theaffordability of at-risk projects. These subsidies can be structured to mirror the Section 8 program,whereby the subsidy covers the cost of the unit above what is determined to be affordable for thetenant’s household income (including a utility allowance) up to the fair market value of theapartment. Given the mix of unit sizes, the total annual subsidy to maintain the 528 at-risk units isestimated at over $5 million.Table 27: Rent Subsidies Required to Preserve At-Risk Rental UnitsUnitSizeTotalUnitsFairMarketRentsVery LowIncome(
Housing Element Needs AssessmentRefinance County Mortgage Revenue BondsWhen County Mortgage Revenue Bonds are refinanced, projects are required by the 1986 TaxReform Act to commit their 20% low-income units for 15 years or as long as the bonds areoutstanding, whichever is greater. Because these bonds are County-managed bonds, the City issomewhat limited in its ability to effect this option. However, the City can encourage the County tonegotiate with the project owners to refinance the bonds. The cost to the County to negotiate thebond include the difference in interest rates on the remaining debt between the previous and renegotiatedbonds, an issuance cost of 3% of the bond to be paid by the County up front, andadministrative costs.Construction of Replacement UnitsThe construction of new low-income housing can be a means to replace at-risk units. The cost ofdeveloping new housing depends on a variety of factors including density, size of units,construction quality and type, location, and land cost. Assuming a development cost of $200,000for a multi-family rental unit, the cost of replacing all 528 affordable at-risk units would beapproximately $106 million.Estimates of Housing NeedSeveral factors influence the degree of demand, or "need," for housing in Garden Grove. The fourmajor needs categories considered in this element include:• Housing needs resulting from the overcrowding of units• Housing needs that result when households pay more than they can afford for housing• Housing needs of "special needs groups" such as elderly, large families, female-headedhouseholds, households with a disabled person, farmworkers, and the homelessState law requires that Cities quantify existing housing need in their Housing Element. This chapterof the Housing Element has presented the existing housing need in the previous sections and Table28 summarizes those findings.City of Garden Grove 33 2014-2021 Housing Element
Page 1: 2014-2021 Housing ElementCity of Ga
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Housing Element PlanProgram 2: Code
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Appendix A:SITES INVENTORY TABLES
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Table A-1: Garden Grove 2014-2021 H
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Table A-2: Garden Grove 2008-2014 H
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Adopted 2014-2021 Housing Element - Garden Grove

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