Long Beach to amend housing trust fund
Decision allows the city to increase its home stock for low-income families
City Attorney Dawn McIntosh will draft an ordinance that would align provisions of the local housing trust fund with state regulations, including those of the California Community Development Department, so Long Beach can capture more funds to increase its housing stock for low-income residents.
The City Council directed McIntosh and her office to craft the ordinance, which would amend current rules, during this week's meeting.
The amendments, which the council will have to OK, should include requiring at least 30% of the money in the housing trust fund be invested in helping “extremely low-income households.” Housing units or shelter beds built with that money must be affordable and available only to folks with extremely low incomes, according to the council's direction.
Currently, the housing trust fund calls for no less than 50% of the money to be available to provide housing assistance for households with above-moderate incomes, with the other half earmarked to help those defined as extremely low income, said Meggan Sorensen, the city's bureau manager with Housing and Neighborhood Services.
Extremely low-income households are those who make less than 30% of the area's median income. To be considered extremely low income in the Long Beach area, a family of four, as of mid-May, would need an income of no more than $37,850, according to the U.S. Department of Housing and Urban Development.
The goal of amending the regulations is to obtain matching funds from the state's Department of Housing and Community Development's Local Housing Trust Fund for housing refurbishment and to expand the stock of affordable units, according to a staff report for this week's council meeting.
The city's housing trust fund, created in 2005, initially collected $250,000 from the Douglas Park mitigation project and $500,000 more from the transient occupancy tax levied on hotel and motel rentals in fiscal years 2005 and 2006.
Currently, the housing trust fund has a balance of about $33,000, Sorensen said.
The ordinance, once amended, should cap fund expenses for helping moderate-income households at 20%. The remaining money in the fund should be used to support housing for lower income folks.
The city will deposit $5 million from its Permanent Local Housing Allocation program and another $200,000 from the general fund — money earmarked for a pilot Accessory Dwelling Unit loan program — into the housing trust fund so that Long Beach can receive the state's matching funds, said Rick De La Torres, spokesperson for the city's Community
Development Department.
Once the council approves the new ordinance, the city will apply for the LHFT matching funds.
The money would help restore, preserve and build affordable housing, transitional units and emergency shelters.
LHFT money also should serve to support applications for construction or financing loans, as well as to pay for pre-development and purchase costs to build or rehab affordable housing, permanent supportive housing and programs to purchase homes.
Those funds also would be available for qualifying applicants wanting to buy apartments for sale.
The city, meanwhile, would have to identify new local funding sources to keep the trust fund operational.
Pairing the housing trust fund with state regulations comes at a critical juncture, with city leaders expanding programs to house those who are homeless and increasing the availability of housing for low-income residents, many teetering on the edge of being evicted because of high rental costs.
The new ordinance, which the City Council directed McIntosh to draft during its Tuesday meeting, would allow a new strategy aimed at tripling the trust fund, rehabbing old units for low-income residents and expanding home ownership opportunities for those folks, said Christopher Koontz, director of Long Beach's Community Development Department.
“We are trying to (turn) every dollar,” Koontz said, “into three with matching funds.”