Affordable-housing project proposed for Signal Hill in peril as ‘seed money’ dries up

Sean Belk/Signal Tribune<br><strong>Property at 2170 Gundry Ave. in Signal Hill that consists of an old metal Quonset hut built after World War II is slated to be demolished to make way for a 60-unit affordable-housing project. However, funds for the project have dwindled. </strong>

Sean Belk/Signal Tribune
Property at 2170 Gundry Ave. in Signal Hill that consists of an old metal Quonset hut built after World War II is slated to be demolished to make way for a 60-unit affordable-housing project. However, funds for the project have dwindled.

Sean Belk
Staff Writer

For several years, Signal Hill has planned its sixth affordable-housing complex, but city officials now say it’s unclear when, if ever, the project will move forward since “seed money” for the development has dried up, primarily after State legislators last year eliminated the largest funding source for low- to moderate-income housing.
Even with rising rents across the region, funds set aside to stimulate affordable housing have dwindled after the State abolished redevelopment during the recent budget crisis, taking away nearly $1 billion in annual affordable-housing support. Meanwhile, funds from state housing bonds (Props. 46 and 1C) are nearly exhausted while federal housing assistance is being cut back. As a result, cities are left with little money to assist in new affordable-housing projects.
Before redevelopment was dismantled, Signal Hill city officials were in the initial stages of setting up an affordable-housing development that would consist of 60 units, taking up properties at 1500 Hill St. and 2170 Gundry Ave.
The project would involve demolishing existing structures, combining the properties into one complex and then submitting a request for proposals for an affordable-housing developer to take over the development. Although the total cost of the development is yet to be determined, the project would be funded much like Las Brisas 1 and 11 developments that were built in a partnership with nonprofit Adobe Communities.
For the new project, the former Signal Hill Redevelopment Agency (RDA) had already acquired both properties that have since been transferred to the Signal Hill Housing Authority.
The Gundry property, which consists of an old metal Quonset hut built after World War II and currently occupied by P&M Diesel, was acquired through eminent domain in January 2011. The adjacent Hill Street property, which is occupied by existing renters, was acquired in 2010.
Rental income collected from both tenants is being placed in an account designated for the Housing Authority, minus a property management fee and maintenance expenses, according to a previous City staff report.
The State Department of Finance (DOF), which has final approval of leftover redevelopment funds during the dissolution, has already approved a “settlement agreement” that requires the tenant on Gundry Avenue eventually move out of the property to make way for the housing project.
However, in December of last year, the DOF determined that $2.6 million in affordable-housing funds slated for the project are “un-obligated” since the City hadn’t signed a contract agreement with a developer yet. As such, the State forced Signal Hill to “remit” the funds to various taxing entities in Los Angeles County, said Elise McCaleb, Signal Hill’s economic development manager.
Although the properties have been acquired, she said the City must now find new ways to fund the project, since such developments, usually taken up by nonprofit developers, require “several layers” of funding that no longer are available through redevelopment funds set aside for affordable housing. McCaleb said “a lot of things have to happen” before the City will be able to turn the project over to a developer.
“We have to figure out some kind of replacement for affordable housing funds… that will be the difficulty of developing it,” she said. “We’ll need to see if the State has some other funds for low- to moderate-income housing… We’ll have to wait until the dust settles on the redevelopment dissolution to see what comes out of this.”
McCaleb added that there are still 34 acres of property in Signal Hill previously owned by the former Signal Hill Redevelopment Agency, and the City’s redevelopment successor agency must prepare a “long-range property management plan” to determine what property will be used for economic development and what will be kept for public use.
By April 1, the City is expected to receive information on the results of a due-diligence review for non-housing funds, and the City will be eligible for a “finding of completion” once all un-obligated funds are remitted, she said.
Affordable-housing legislation
New legislation, however, proposes to rejuvenate at least some affordable-housing funds in the state. Senate Bill 391, known as the California Homes and Jobs Act of 2013, introduced Feb. 20 by Sen. Mark DeSaulnier (D-Concord), would generate an estimated $500 million in state funds for affordable housing each year through charging a $75 fee on real-estate transactions, excluding home sales.
The legislation, based on a similar bill that didn’t pass last year, requires a two-thirds vote to be approved in the State Legislature and must be signed by Gov. Jerry Brown. So far, the Howard Jarvis Taxpayers Association opposes the bill.
The revenue comes out to only half of what redevelopment once provided. However, city officials, affordable-housing advocates and some legislators say the bill is a good start, adding that the legislation would create housing funds “without creating new debt” and would also “leverage an additional $2.78 billion in federal funding and bank loans annually.”
A statement on the legislation states that a private/public partnership model will be able to create 29,000 jobs annually, primarily from new housing construction, adding that the bill would assist in the building of affordable single-family homes and apartments for Californians in need, including families, seniors, veterans, and people with disabilities.
The bill is sponsored by the California Housing Consortium and Housing California and, so far, has received support from business organizations as well, including the Los Angeles Area Chamber of Commerce, the Orange County Business Council, Silicon Valley Leadership Group and the Los Angeles Business Council.
“I think it’s important to note that the housing crisis isn’t over for many Californians,” said Mike Roth, spokesperson for the legislation. “Now that we’re seeing home prices rise, which is driving affordability down, we need to get California building again… it won’t replace all of the redevelopment funds, but we recognize each community’s housing needs are unique. We look forward to working with coalition members and congressional members on how funds can be allocated for existing, highly successful housing programs.”
Tom Modica, Long Beach’s director of government affairs, said the City supports affordable housing but the bill isn’t on its legislative agenda, adding that the City hasn’t taken a position on the legislation.
In Long Beach, two affordable-housing projects are able to move forward after the State DOF approved $18.3 million in bond proceeds. Of the total, $5.9 million is going toward revitalizing the Belwood Arms Apartments at 6301 Atlantic Ave., while the remaining $12.4 million is be allocated for the construction of the Ramona Park Senior Apartments at 3290 E. Artesia Blvd. expected to break ground on March 6. The $22-million Ramona complex is expected to replace the vacant Farmers & Merchants Bank to make way for a two-story, 61-unit complex.

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