2011 12 06 HANOTICE AND CALL OF SPECIAL MEETING
OF THE LA QUINTA HOUSING AUTHORITY
TO THE MEMBERS OF THE HOUSING AUTHORITY OF THE CITY OF LA QUINTA
AND TO THE CITY CLERK:
NOTICE IS HEREBY GIVEN that a special meeting of the Housing Authority
of the City of La Quinta is hereby called to be held on December 6, 2011 starting
at 4:00 p.m. at La Quinta City Hall, 78 -495 Calle Tampico, La Quinta, California.
1. Approval of an Appropriation to Fund Silent Second Trust
Deeds for the Foreclosed Home Purchase and Sale
Program
2. Discussion of Washington Street Apartments Sound Wall
Design
4 TYKRI4A I NKLIN, Dated: (Z 1 2-o11
Chairperson
Attest:
Veronica J. Montecino
City Clerk
DECLARATION OF POSTING
I, Veronica J. Montecino, City Clerk of the City of La Quinta, do hereby declare
that the foregoing agenda for the Special La Quinta Housing Authority meeting of
December 6, 2011, was posted on the outside entry to the Council Chamber at 78-
495 Calle Tampico and on the bulletin boards at 51 -321 Avenida Bermudas and
78 -630 Highway 1 1 1 on December 2, 2011.
DATF6: Decem
Veronica J. nt6cinb, City
City of La 6uinta, California
001
HOUSING AUTHORITY 1 DECEMBER 6, 2011
Housing Authority agendas and staff reports
are available on the City's web site:
www.la- quinta.org
HOUSING AUTHORITY
AGENDA
CITY COUNCIL CHAMBERS
78 -495 Calle Tampico
La Quinta, California 92253
SPECIAL MEETING
TUESDAY, DECEMBER 6, 2011 AT 4:00 P.M.
Beginning Resolution No. HA 2011 -006
CALL TO ORDER
Roll Call:
Board Members: Adolph, Evans, Henderson, and Chairperson Franklin
PUBLIC COMMENT
At this time members of the public may address the Housing Authority on any matter not
listed on the agenda. Please complete a "request to speak" form and limit your comments
to three minutes.
CONFIRMATION OF AGENDA
APPROVAL OF MINUTES - NONE
CONSENT CALENDAR
1. APPROVAL OF AN APPROPRIATION TO FUND SILENT SECOND TRUST
DEEDS FOR THE FORECLOSED HOME PURCHASE AND SALE PROGRAM
BUSINESS SESSION — NONE
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HOUSING AUTHORITY AGENDA - 1 DECEMBER 6, 2011
STUDY SESSION
1. DISCUSSION OF WASHINGTON STREET APARTMENTS SOUND WALL
DESIGN
CHAIR AND BOARD MEMBERS' ITEMS - NONE
PUBLIC HEARINGS - NONE
ADJOURNMENT
The next regular meeting of the Housing Authority will be held on December 20,
2011 at 4:00 p.m. in the City Council Chambers, 78 -495 Calle Tampico,
La Quinta, CA 92253.
DECLARATION OF POSTING
I, Veronica Montecino, City Clerk of the City of La Quinta, do hereby declare that
the foregoing agenda for the La Quinta Housing Authority special meeting of
December 6, 2011, was posted on the outside entry to the Council Chamber at 78-
495 Calle Tampico and on the bulletin boards at 51 -321 Avenida Bermudas and
78 -630 Highway 111, on December 2, 2011.
DATED: December 2, 2011
VERONICA J. M TECINO, City Clerk
City of La Quinta; California
Public Notice
Any writings or documents provided to a majority of the Housing Authority regarding any
item on this agenda will be made available for public inspection at the City Clerk counter at
City Hall located at 78 -495 Calle Tampico, La Quinta, California, 92253, during normal
business hours.
003
HOUSING AUTHORITY AGENDA 2 DECEMBER 6, 2011
COUNCIL/RDA/HA MEETING DATE: December 6, 2011
ITEM TITLE: Approval of an Appropriation to Fund
Silent Second Trust Deeds for the Foreclosed Home
Purchase and Sale Program
AGENDA CATEGORY:
BUSINESS SESSION:
CONSENT CALENDAR: 1
STUDY SESSION:
PUBLIC HEARING:
RECOMMENDATION
Approve an appropriation in the amount of $375,000 from the PA 1 Housing Authority
to fund Silent Second Trust Deeds for the Foreclosed Home Program.
FISCAL IMPLICATIONS:
Funding for the Foreclosed Home Purchase, Rehabilitation and Sale Program, including
the provision of silent second trust deeds, were budgeted in the Fiscal Year
2011/2012 Redevelopment Agency budget; however, due to the California Supreme
Court stay, Redevelopment Agency funds cannot be accessed at this time, nor can the
Redevelopment Agency enter into new contracts with limited exceptions. In order to
continue providing silent second trust deeds so that very -low, low -, and moderate -
income households can purchase the homes, an appropriation is needed from existing
Housing Authority funds.
There are currently five houses that are ready to sell and one is in escrow. The silent
second trust deeds average $65,000 per home; and the one house in escrow requires
a $50,000 silent second trust deed, bringing the total appropriation to $375,000.
It should be noted that this appropriation is for accounting purposes — the silent
second trust deed is recorded on the property; however, the funds are not paid out to
anyone. The value of the silent second trust deed is added to the value of the first
trust deed to determine the selling price. The buyers obtain a first trust deed mortgage
that they can afford, and the silent second trust deed fills the gap between the sales
price and the first trust deed amount. Once a silent second trust deed is issued, an
affordability covenant is recorded on the property for a term of 45 years.
1 .. �.�.,�. -004
BACKGROUND AND OVERVIEW
In May 2009, the La Quinta Redevelopment Agency approved the Home Foreclosure
Purchase Program whereby the Agency purchases foreclosed homes that are in need
of substantial rehabilitation, rehabilitates the homes to a level consistent with the
surrounding neighborhood, then sells or rents the homes to income - qualified buyers at
affordable sales prices or affordable rents. Long -term affordability covenants are
recorded against the homes that restrict the resale to income - qualified buyers at
affordable sales prices.
Through this program, the Agency has purchased 13 homes, twelve of which have
been completely rehabilitated and one that will be rehabilitated in the near future. La
Quinta Palms Realty has been contracted to locate homes to purchase through
foreclosure sales; help manage the rehabilitation process along with City staff; and sell
the homes to qualified buyers or rent the homes to income - qualified tenants. These
homes were transferred to the Housing Authority in Fiscal Year 2010/2011.
To date, five have been sold to income - qualified households, one is in escrow, five are
for sale, and one will undergo rehabilitation in the near future.
The purchase price for the homes ranged from $68,000 to $126,000, depending on
the condition of the house. All of the houses contain roughly the same total square
footage (approximately 1,300 sq. ft.); three bedrooms; two baths; and a two -car
garage. Redevelopment law requires that the rehabilitation must cost at least 25% of
the purchase price. The investments advance the program goals of alleviating blight by
rehabilitating severely dilapidated foreclosed homes to stabilize neighborhoods, and
rehabilitate properties that may otherwise remain blighted. These homes are so
severely blighted that most private sector investors will not purchase the homes. In
addition, all rehabilitation work is performed by local contractors, which provides jobs.
A sales price of $135,000 has been determined to be affordable to very low -, low -,
and moderate - income households at this time. The price is based on home value and
affordability guidelines which include income and number of household members. The
sales price may be adjusted in the future, depending on market conditions and interest
rates. In connection with each sale, the Housing Authority provides a second trust
deed loan to the buyer. This allows the buyers to obtain a 1 51 trust deed loan from a
market -rate lender that they can afford. The buyer also provides a modest down
payment. The second trust deed loan secures the 45 -year affordability covenant on
the home, which allows the home to be counted towards the Redevelopment Agency's
affordable housing production requirements. The buyer does not make monthly
payments on the second trust deed. If the buyer were to stay in the home for 45
years, the second trust deed would be forgiven. If the buyer sells the home before the
45 year period ends, the second trust deed stays with the home, and the home must
be sold at an affordable price to another income - qualified buyer.
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FINDINGS AND ALTERNATIVES:
The alternatives available to the Housing Authority include:
1. Approve an appropriation in the amount of $375,000 from the PA 1 Housing
Authority to fund Silent Second Trust Deeds for the Foreclosed Home Program;
or
2. Do not approve an appropriation in the amount of $375,000 from the PA 1
Housing Authority to fund Silent Second Trust Deeds for the Foreclosed Home
Program; or
3. Provide staff with alternative direction.
Respectfully submitted,
�60� 1 "-
Debbie Powell
Economic Development /Housing Manager
Approved for submission by:
John M. Falconer, Acting Executive Director
•..w" 006
COUNCIL/RDA/HA MEETING DATE: December 6, 2011
ITEM TITLE: Discussion of Washington Street
Apartments Sound Wall Design
AGENDA CATEGORY:
BUSINESS SESSION:
CONSENT CALENDAR:
STUDY SESSION: 1
PUBLIC HEARING:
Please refer to Redevelopment Agency Agenda Study Session Item No. 1.
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