HomeMy WebLinkAboutMINUTES - 05152012 - HA C.08RECOMMENDATIONS
APPROVE the award of 208 project-based vouchers as recommended by the Executive Director.
BACKGROUND
A housing authority can utilize up to 20% of its Housing Choice Voucher (HCV) funding to “attach” rent subsidies to
specific housing units. The attached subsidy is known as a project-based voucher (PBV). PBVs are a component of
the HCV program and share most of the same rules and regulations. PBVs are attached to units via a contract with the
owner that requires the units be rented to families eligible for the HCV program. While tenants living in a PBV unit
may move with regular voucher assistance, the PBV remains attached to the unit and the owner must select another
HCV-eligible tenant for that unit. The advantage of PBVs for owners is that the PBV commitment from a housing
authority can be used to leverage financing for the construction, rehabilitation or preservation of housing for
low-income families by providing a greater cash-flow than the property would otherwise generate. This is because
most funding available to owners of affordable projects restricts the rent that can be collected from
Action of Board On: 05/15/2012 APPROVED AS RECOMMENDED OTHER
Clerks Notes:
VOTE OF
COMMISSIONERS
Contact: 925-957-8028
I hereby certify that this is a true and correct copy of an action taken and entered on the minutes of the Board of
Supervisors on the date shown.
ATTESTED: May 15, 2012
Joseph Villarreal, Executive Director
By: , Deputy
cc:
C. 8
To:Contra Costa County Housing Authority Board of Commissioners
From:Joseph Villarreal, Executive Director
Date:May 15, 2012
Contra
Costa
County
Subject:Project Based Vouchers 5-15-12
BACKGROUND (CONT'D)
tenants to an affordable amount that is usually far less than a comparable unit would merit on the open market.
However, because the HCV program pays market rate rents by subsidizing the difference between an affordable
rent for the tenant and the market rate rent for a particular unit, and the PBV program uses this same basic
formula, the amount of rent that an owner can collect from a PBV unit is usually significantly higher than
otherwise available to the project. This allows the owner to leverage far more financing than if PBVs were not
available and thus can be crucial to the success of a given project. The primary advantage of PBVs to a housing
authority is that they help increase or preserve the supply of permanent, affordable housing available to both the
community and HCV recipients.
In general, HUD regulations do not permit PBV assistance to be awarded to more than 25% of the units in a
development. However, exceptions are allowed for single-family buildings (defined by HUD as one to four units)
and units in multi-family buildings that are designated for elderly or disabled persons or for families receiving
HUD-approved supportive services. HUD will permit up to 100% of units in a development meeting these
exceptions to have PBV assistance. HUD requires housing authorities to utilize a competitive process to select
developments that will receive PBV assistance. A housing authority can utilize its own competition or may choose
projects that were competitively awarded affordable housing funds under a federal, state, or local government
program (e.g., CDBG, HOME, competitively awarded Low-Income Housing Tax Credits). If the competitive
process of another governmental entity is used, the award of those funds can not have occurred more than three
years from the PBV selection date and the earlier selection proposal must not have involved any consideration
that the project would receive PBV assistance. As provided in HACCC’s Section 8 Administrative Plan approved
by the Board of Commissioners, HACCC will accept proposals for PBV assistance from owners that were
selected in another government’s affordable housing competition. In particular, HACCC awards PBVs to
developments chosen in Contra Costa County’s competitions for HOME, CDBG, and/or HOPWA funds. HACCC
has taken this approach in order to maximize the success rate of developments funded by both the County and
HACCC. All developments recommended for PBV assistance in this Board Order have been awarded funding by
the County at least once in the past three years.
PBV assistance is usually awarded to newly constructed or rehabilitated units. However, assistance can also be
awarded to existing units to preserve affordable housing that might be lost due to financial circumstances. Upon
HACCC-approved completion of the construction or rehabilitation of the units, or the acceptance of existing units,
HACCC will enter into a housing assistance payment (HAP) contract with the owner for an initial term of fifteen
years and an extension of the initial term of fifteen years. Federal statute permits the initial term to be anywhere
from one to fifteen years. HACCC utilizes a fifteen year term to mirror the tax credit compliance term and to
provide projects with the maximum financing available. Federal statute also permits housing authorities to grant an
extension of up to fifteen years to the PBV contract at signing. HACCC utilizes the fifteen year extension in order
to further increase the financing available to the project and to ensure long-term affordability of the units. The
statute permits subsequent extensions of up to fifteen years. Both the initial contract term and any contract
extensions are subject to the availability of federal funding for the HCV program.
All tenants of PBV units must be screened for eligibility for the HCV program by HACCC and must come from
HACCC’s wait list or a joint wait list maintained by the property that is overseen by HACCC and open to
families on HACCC’s HCV wait list. The property owner will then select tenants for occupancy of a particular
unit after conducting additional suitability screening consistent with their tenant screening and eligibility policies
for that property. Tenants in PBV units will sign an initial lease with a one year term. After one year, a PBV
tenant has the ability to move from the PBV unit by using regular tenant-based HCV assistance. If a PBV property
does not continuously lease up all of its PBV units or if the property fails to meet HUD’s Housing Quality
Standards for health and safety, then the PBV units awarded to that property can be rescinded.
HACCC has awarded 209 PBVs in previous funding competitions. Staff recommends that HACCC award an
additional 208 PBVs to six different projects. A list of the projects proposed to receive PBV assistance is attached.
As mentioned above, the projects were competitively awarded at least one round of HOME, CDBG or HOPWA
funding from the County in the past three years. This funding was approved by the Board of Supervisors and the
competitive process used meets HUD’s requirements. Overall, each project has actually received more than one
round of funding from the County, and, with one exception, every project has also received funding from the City
in which it is located.
FISCAL IMPACT
Funding for project-based vouchers is provided by utilizing a portion of the Housing Authority of the County of
Contra Costa’s (HACCC) tenant-based voucher funding.
CONSEQUENCE OF NEGATIVE ACTION
Should the Board not approve the award of PBV units to one or more of these projects, completion of the
project(s) will be delayed or jeopardized. The projects would likely seek additional funding from the County and
other sources.
CLERK'S ADDENDUM
ATTACHMENTS
PBV Applicants