Item No. 2.
| MEETING DATE: 05/02/2022 |
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| TO: | HONORABLE CHAIR AND DIRECTORS |
| FROM: | JIM SADRO, EXECUTIVE DIRECTOR By: Miranda Cole-Corona, Housing and Economic Dev Manager |
| SUBJECT: | APPROVE THE INSTALLATION OF A NEW MANUFACTURED HOME IN SPACE 122 OF VIEW PARK ESTATES LOCATED AT 1750 WEST LAMBERT ROAD AND IN SPACE 78 OF PARK LA HABRA MOBILE HOMES LOCATED AT 1731 WEST LAMBERT ROAD FOR FUTURE AFFORDABLE HOUSING
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RECOMMENDATION:
That the Housing Authority:
A. Authorize Augusta Communities to act as the licensed retailer on behalf of the Housing Authority under Section 3.3 of the Asset and Mobile Home Park Management Agreement between the Housing Authority and Augusta Communities dated November 4, 2019;
B. Authorize the Executive Director or his or her designee to sign, and/or approve any documents including but not limited to bids, proposals, agreements, invoices and purchase orders related to the purchase and installation of new manufactured homes, including construction cost; and,
C. Approve a budget appropriation of $250,000 from the Low and Moderate Income Asset Fund (LMIHF) for expenses related to the purchase and installation of the manufactured home located in View Park Mobile Home Estates; and,
D. Approve a budget appropriation of $250,000 from the Housing Authority for expenses related to the purchase and installation of the manufactured home located at Park La Habra Mobile Homes.
DISCUSSION:
The La Habra Housing Authority (Authority) owns and operates two mobile home parks in the City of La Habra: View Park Estates (View Park) and Park La Habra Mobile Homes (Park La Habra). Both mobile home parks are managed and operated by Augusta Communities (Augusta). Staff has identified one space in each mobile home park that could provide an opportunity for the City to facilitate affordable housing within these parks. Both spaces are currently empty and ready for a new manufactured home to be placed on the lots.
As described below, the mobile homes that were previously located in these spaces were removed due to their age and poor condition. In addition, it is more cost-effective to replace these mobile homes with more energy-efficient, longer lasting manufactured homes than it would have been to rehabilitate the older mobile homes.
At View Park, the owner of the unit that was located in space 122 stopped paying rent and the unit went into a lien sale on May 28, 2021. There were no bidders for the mobile home, so Augusta Communities worked with its legal counsel to file paperwork and paid $500 to have ownership of the unit transferred to the Authority. Augusta removed the mobile home at no cost to the Authority. .
At Park La Habra, the owner of the unit that was located in space 78 sold the unit without the consent of property management and the prospective purchaser was not granted approval to move into the mobile home by Augusta or the Authority. The owner then informed Augusta and the Authority that they would remove the mobile home. However, the mobile home was never removed and no rent was paid on the subject space.
On February 1, 2021, the mobile home went into a lien sale. There were no bidders for the mobile home, so Augusta worked with their legal counsel to file paperwork and paid $500 to have ownership transferred to the Housing Authority. Augusta subsequently removed the mobile home at no cost to the Authority.
Augusta, acting as a state licensed retailer, will oversee the purchase and installation of the new manufactured homes, including upgrading utilities, if necessary. Augusta is an experienced licensed retailer and is able to complete the aforementioned project elements pursuant to Section 3.3 of the agreement by and between the Authority and Augusta.
The long-term goal of the Authority is to provide sustainable, affordable housing opportunities for the community. This long-term goal will be furthered by the approval of this project. Furthermore, this project will enhance the Authority's efforts to encourage placement of newer manufactured homes within the mobile home parks. The new manufactured homes will also allow potential opportunities for affordable housing, as described below.
Permanent Supportive Housing
Instances of individuals and families experiencing homelessness continue to present a challenge for cities throughout California, including here in Orange County. To help address this challenge, the City of La Habra has worked closely with other municipalities and partners in the North Service Planning Area, working in close collaboration to identify and secure funding to address short- and mid-term homeless sheltering and housing needs. While more shelter beds are becoming available, there remains a lack of longer-term supportive housing for individuals and families who seek a path out of homelessness.
Staff have worked diligently to develop a supportive housing program, and in the event a program is approved by the City or Authority, staff would have another tool with which to provide a potential exit from homelessness. Permanent supportive housing would provide these housing recipients with longer-term housing and services that can lead to greater independence and self-sufficiency.
Extremely-Low Income Housing
Families and individuals with extremely low incomes in La Habra and elsewhere in Southern California struggle to pay market rate rents, in large part due to the continuous rise in housing costs. For example,an extremely-low income household typically makes 30% or less of the area's median income. According to the U.S. Department of Housing and Urban Development, in 2021, the typical household income for an extremely low-income household of four in Orange County was just $40,350 per year, with an extremely low-income household of one individual making, on average, just $28,250 annually. By creating housing options restricted to extremely-low income households, La Habra could help prevent additional homelessness.
An extremely-low income housing program could be designed that emphasizes the following:
A. Families of four or less (could be larger depending on the unit size) that meet the income restrictions;
B. Elderly or disabled residents who meet the income qualifications;
C. Veterans who meet the income restrictions.
Relocation of Occupants of the Apartment in Park La Habra
There is an apartment located above the Clubhouse in Park La Habra. In 2018, staff conducted an inspection of the apartment and found the unit in need of complete rehabilitation. Currently, a family of four rents the apartment and in order to rehabilitate the apartment, the family would need to be relocated. The proposed manufactured home in Park La Habra could be utilized to relocate the residents of the apartment. Once the apartment is vacated, it can be renovated and either re-leased or used as housing for a full-time onsite manager.
Staff will continue to evaluate options for affordable housing and provide recommendations to the Housing Authority for discussion and approval at a future date.
As described below, the mobile homes that were previously located in these spaces were removed due to their age and poor condition. In addition, it is more cost-effective to replace these mobile homes with more energy-efficient, longer lasting manufactured homes than it would have been to rehabilitate the older mobile homes.
At View Park, the owner of the unit that was located in space 122 stopped paying rent and the unit went into a lien sale on May 28, 2021. There were no bidders for the mobile home, so Augusta Communities worked with its legal counsel to file paperwork and paid $500 to have ownership of the unit transferred to the Authority. Augusta removed the mobile home at no cost to the Authority. .
At Park La Habra, the owner of the unit that was located in space 78 sold the unit without the consent of property management and the prospective purchaser was not granted approval to move into the mobile home by Augusta or the Authority. The owner then informed Augusta and the Authority that they would remove the mobile home. However, the mobile home was never removed and no rent was paid on the subject space.
On February 1, 2021, the mobile home went into a lien sale. There were no bidders for the mobile home, so Augusta worked with their legal counsel to file paperwork and paid $500 to have ownership transferred to the Housing Authority. Augusta subsequently removed the mobile home at no cost to the Authority.
Augusta, acting as a state licensed retailer, will oversee the purchase and installation of the new manufactured homes, including upgrading utilities, if necessary. Augusta is an experienced licensed retailer and is able to complete the aforementioned project elements pursuant to Section 3.3 of the agreement by and between the Authority and Augusta.
The long-term goal of the Authority is to provide sustainable, affordable housing opportunities for the community. This long-term goal will be furthered by the approval of this project. Furthermore, this project will enhance the Authority's efforts to encourage placement of newer manufactured homes within the mobile home parks. The new manufactured homes will also allow potential opportunities for affordable housing, as described below.
Permanent Supportive Housing
Instances of individuals and families experiencing homelessness continue to present a challenge for cities throughout California, including here in Orange County. To help address this challenge, the City of La Habra has worked closely with other municipalities and partners in the North Service Planning Area, working in close collaboration to identify and secure funding to address short- and mid-term homeless sheltering and housing needs. While more shelter beds are becoming available, there remains a lack of longer-term supportive housing for individuals and families who seek a path out of homelessness.
Staff have worked diligently to develop a supportive housing program, and in the event a program is approved by the City or Authority, staff would have another tool with which to provide a potential exit from homelessness. Permanent supportive housing would provide these housing recipients with longer-term housing and services that can lead to greater independence and self-sufficiency.
Extremely-Low Income Housing
Families and individuals with extremely low incomes in La Habra and elsewhere in Southern California struggle to pay market rate rents, in large part due to the continuous rise in housing costs. For example,an extremely-low income household typically makes 30% or less of the area's median income. According to the U.S. Department of Housing and Urban Development, in 2021, the typical household income for an extremely low-income household of four in Orange County was just $40,350 per year, with an extremely low-income household of one individual making, on average, just $28,250 annually. By creating housing options restricted to extremely-low income households, La Habra could help prevent additional homelessness.
An extremely-low income housing program could be designed that emphasizes the following:
A. Families of four or less (could be larger depending on the unit size) that meet the income restrictions;
B. Elderly or disabled residents who meet the income qualifications;
C. Veterans who meet the income restrictions.
Relocation of Occupants of the Apartment in Park La Habra
There is an apartment located above the Clubhouse in Park La Habra. In 2018, staff conducted an inspection of the apartment and found the unit in need of complete rehabilitation. Currently, a family of four rents the apartment and in order to rehabilitate the apartment, the family would need to be relocated. The proposed manufactured home in Park La Habra could be utilized to relocate the residents of the apartment. Once the apartment is vacated, it can be renovated and either re-leased or used as housing for a full-time onsite manager.
Staff will continue to evaluate options for affordable housing and provide recommendations to the Housing Authority for discussion and approval at a future date.
FISCAL IMPACT/SOURCE OF FUNDING:
Staff received three (3) bids to build the manufactured home. Just one of the bidders is willing to lock the rate for a twelve-month period, meaning that in the event costs for construction and materials increase before the manufacturer starts construction of the mobile home, the price of the manufactured home quoted would not change. This is the most expensive option, but it guarantees a price and would prevent future delays should costs increase and eliminate the need to bring the matter back to the Authority for additional consideration.
The following is the breakdown of the three bids and the additional cost of purchasing and installing each manufactured home:
The following is the breakdown of the three bids and the additional cost of purchasing and installing each manufactured home:
| Goldenwest | Redman | Skyline | |
| Home | $133,259 | $107,442 | $92,303 |
| Delivery | $5,000 | $5,000 | $5,000 |
| Set-Up | $16,000 | $16,000 | $16,000 |
| Accessories | $22,000 | $22,000 | $22,000 |
| Dealer Tax | $9,245 | $7,454 | $6,404 |
| Landscaping | $4,000 | $4,000 | $4,000 |
| Cleaning | $400 | $400 | $400 |
| Contingency | $20,216.19 | $24,344.34 | $21,915.97 |
| Total | $210,120.19 | $186,639.94 | $168,022.44 |
| Augusta @ 20% | $39,879.81 | $37,327.99 | $33,604.49 |
| Net Total | $250,000 | $223,967.92 | $201,626.92 |
Staff recommends the Authority approve an appropriation of $250,000 from LMIHAF and approve an appropriation of $250,000 from Authority funds for the purchase, installation and all exterior finishes for the two manufactured homes. The total cost of purchasing and installing two manufactured homes will not exceed $500,000.
GENERAL PLAN RELEVANCE:
H3.3 Support and Participate in Housing Programs