The Housing Program provides low interest loans to single family and multi-family ownership homes, mobilehomes, and rental properties housing low-income households. The substantial rehabilitation loans cover both code and general improvements to the structure. The intent of the program is to insure that the residents are living in safe and sanitary homes. Interest rates range from 3% to 5% depending on the household income and the ability to repay. Loans to very low-income households (50% of median income) are deferred payment. To qualify for the loans to rental property the unit(s) must be continuously rented to a low-income household and rents cannot exceed the existing HUD Section 8 rents for Santa Clara County.

Each year the Housing Program manages approximately 30 to 40 projects with a loan budget of $663,000. The funds are all from the HUD CDBG grant funds. The Housing Program has been in effect since the start of the CDBG program in the 1970’s. As a result, repayment on these loans has been averaging over $400,000 a year. These funds are recycled back to the Housing Improvement Program Revolving Loan Fund. Accomplishments for the Housing Programs are exceeding the mid-year project completion and expenditure goals with more than 66% of the proposed substantial rehabilitation projects completed. The Home Access projects have already exceeded the year end projected goals.

Project Match began the operation of a Senior Group Residence Program in the 1980s. The mission of the program is to help seniors meet their affordable housing and support service needs. In 1999, the Santa Clara County population of people 60 years of age and older totaled 300,000 which represents 18% of the total County population of 1.7 million. This represents a 40% increase in the total senior population over the past decade. As seniors age they become challenged by several factors of aging, especially mobility and self-care. If income is limited, as it is for over 60% of seniors living in Santa Clara County, the ability of a senior to afford housing is threatened. 36% of seniors in Santa Clara County have annual incomes at or below the "very low income" level of $30,000 yearly.

The Senior Group Residence Program is an effective, innovative affordable housing approach for very low-income seniors. The program makes efficient and cost-effective use of existing housing stock. Residences are located within neighborhoods. Neighborhood locations help to reduce the loneliness and social isolation often felt by seniors, living alone, and with limited economic opportunities. The average age of residents is 72 years and their average monthly income is $1,175. However, many incomes are between $600 to $800 a month. Since the tenants do not receive rent subsidies, monthly rents have been limited on average to $378 monthly, which includes utilities, phone and cable. The extremely low rents have maintained the housing affordability for the lowest income senior residents. Case management is provided to assist seniors throughout the aging process and to ensure access to needed community services.

Project Match contacted Sunnyvale in October 2001, along with other cities where their Senior Group residences are located. At issue was the necessity to restructure the financial performance of the properties. The properties have operated with a critical cashflow shortfall and this has threatened the continued financial viability of the properties operated by the agency. The proposed actions include a restructure of the existing conventional debts on the residences, and a request to the Santa Clara Housing Authority for Section 8 Project based vouchers. These actions are intended to increase the income from the properties and to reduce the monthly mortgage expenses.

GOAL C2: Ensure ownership and rental housing options in terms of style, size, and density that are appropriate and contribute positively to the surrounding area.

GOAL A: Foster the expansion of the housing supply to provide greater opportunities for current and future residents given environmental, social, fiscal, and land use constraints.

GOAL C: Promote and maintain a diversity in tenure, type, size, location and cost-of-housing to permit a range of individual choice for all current residents and those expected to become city residents as a result of normal growth processes and employment opportunities.

Policy C.2 Continue to encourage and assist property owners to maintain existing developments in a manner that is aesthetically pleasing, free from nuisances, and safe from hazards.

C.2.b Continue the rehabilitation loan program for single, multifamily and mobile homes.

Policy E.2 Continue to use local, State, and federal financing programs to reduce the costs of construction, or costs to the resident, in order to make housing affordable to low and middle income families, seniors, and the disabled.

E.2.g Acquire land and assist in development/redevelopment of housing through partnerships with regional agencies, nonprofit housing developers and private sector developers.

E.4.a Identify and partner with nonprofit housing organizations using housing funds.

Project Match has requested approval of loans for two properties located in Sunnyvale. Each loan includes the refinance of a conventional loan and the estimated cost to complete the rehabilitation work. The loans requested are as follows:

436 Offenbach/1230 Klee Court

Description: Duplex providing fives residents with housing.

Refinance: $130,000

Rehabilitation: $ 44,000

Total Loan Request: $174,000

The loan to the pre-rehab appraised value ratio on the property is 56%

1675 S. Wolfe Road

Description: Single Residence provides four residents with housing.

Refinance: $72,000

Rehabilitation: $14,000

Total Loan Request: $ 86,000

The loan to appraised value ratio on the property is 62%

Staff reviewed the audited financial statements of the agency, the property projections and the property appraisals. The proposed restructure of the existing loans will greatly enhance the financial viability of the agency and should ensure the continued operation of the sites. The sites provide housing for extremely low-income seniors. The after rehabilitation loan-to-value ratios for both properties are well below program standards. The restructure of the existing debt will position the City as the priority lender at both sites. This will strengthen the ability of the City to collect on loans, should events necessitate those actions.

Public contact was made through posting of the Council agenda on the City’s official notice bulletin board, posting of the agenda and report on the City’s web page, and the availability of the report in the Library and the City Clerk’s Office.

The funding request was presented on January 23, 2002 at the regular meeting to the Housing and Human Services Commission. Bob Campbell, Executive Director of Project Match, presented information to the Commission and responded to their questions. Housing staff presented a report that summarized the request and responded to questions.