S2.31 20-0917 Subject: Oak Grove Apt's Preservation Loan
From: Housing And Community Development
Recommendation: Adopt A Resolution Authorizing The City Administrator Or Designee To Enter Into An Affordable Housing Preservation Loan With Watt Companies, Inc. Or Its Affiliate In An Amount Not To Exceed $5,000 From The Affordable Housing Trust Fund To Support The Preservation Of Affordability At Oak Grove Apartments, A Scattered-Site Project Consisting Of Eight Properties Located In Oakland; And Adopting Appropriate California Environmental Quality Act Findings
This agenda item raises a great number of questions. On its face, the City of Oakland is lending $5,000 to a huge developer related entity. Why?? If the agenda item passes, what is the immediate position of the City of Oakland? In regard to affordability of units, exactly the same as it was. All these units are under rent control. In regard to property taxes, not sure?? Does this become effective unit by unit converting to affordable housing? There appears to be an immediate agreement for up to 50 units to be affordable? How does this work? Can the new landlord verify what income level current tenants have?
The developer has stated that up to 215 of the 255 units may be eligible for affordable units. Is the pre-agreement by the developer that all the 250 units will be affordable, or just a possibility?
Also, the report states that “In addition, rent increases for existing tenants would continue to be subject to terms substantially similar to the Rent Adjustment Program requirements.” So this same if this legislation passes or not?
Considering that there are no practical time limits for a tenant, has this been taken into account in determining what the City gains by losing the property tax?
The report uses the term for rent restriction of “30% of 80% of AMI.” So, 24% of AMI? Does this restriction apply to both the first 50 units and all subsequent units? The rent rate used is current (20% drop)? Does this give the developer access to special loan funds?
If I am reading the agenda report correctly, the proposal is to lend a corporate developer $5,000 for a term of 55 years, to "preserve" affordability in a group of buildings that this company has purchased in Oakland. Is the City providing this loan to the company so that the entire project can be categorized as government subsidized housing under the Rent Adjustment Program? If that is true, then this benefit should be made available to small property owners.
This agenda item raises a great number of questions. On its face, the City of Oakland is lending $5,000 to a huge developer related entity. Why?? If the agenda item passes, what is the immediate position of the City of Oakland? In regard to affordability of units, exactly the same as it was. All these units are under rent control. In regard to property taxes, not sure?? Does this become effective unit by unit converting to affordable housing? There appears to be an immediate agreement for up to 50 units to be affordable? How does this work? Can the new landlord verify what income level current tenants have?
The developer has stated that up to 215 of the 255 units may be eligible for affordable units. Is the pre-agreement by the developer that all the 250 units will be affordable, or just a possibility?
Also, the report states that “In addition, rent increases for existing tenants would continue to be subject to terms substantially similar to the Rent Adjustment Program requirements.” So this same if this legislation passes or not?
Considering that there are no practical time limits for a tenant, has this been taken into account in determining what the City gains by losing the property tax?
The report uses the term for rent restriction of “30% of 80% of AMI.” So, 24% of AMI? Does this restriction apply to both the first 50 units and all subsequent units? The rent rate used is current (20% drop)? Does this give the developer access to special loan funds?
If I am reading the agenda report correctly, the proposal is to lend a corporate developer $5,000 for a term of 55 years, to "preserve" affordability in a group of buildings that this company has purchased in Oakland. Is the City providing this loan to the company so that the entire project can be categorized as government subsidized housing under the Rent Adjustment Program? If that is true, then this benefit should be made available to small property owners.