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2016-11-09 VHC Agenda Packet (Special)California Public Records Act ("PRA"): In compliance with the PRA, the documents pertaining to agenda items, including attachments, which are presented to the Vernon Housing Commission in open session are available for public inspection. They may be inspected during regular business hours in the Office of the City Clerk at Vernon City Hall, 4305 Santa Fe Avenue, Vernon, California 90058, no prior appointment necessary, and on the City’s website at www.cityofvernon.org. Americans with Disabilities Act (“ADA”): In compliance with the ADA, if you need special assistance to participate in the meeting, please contact the Office of the City Clerk at (323) 583-8811. Notification of at least 24 hours prior to the meeting or time when services are needed will assist the City staff in assuring that reasonable arrangements can be made to provide accessibility to the meeting or service. Agenda Special Meeting of the Vernon Housing Commission Wednesday, November 9, 2016, 6:00 p.m. Council Chambers 4305 Santa Fe Avenue Vernon, CA 90058 Melissa Ybarra, Chairperson Kyle Cooper, Vice Chairperson Hector Garcia, Commissioner John Kriste, Commissioner Steven Froberg, Commissioner Steven Florman, Commissioner Frank Gavina, Commissioner CALL TO ORDER & FLAG SALUTE CHANGES TO THE AGENDA PUBLIC COMMENT - At this time the public is encouraged to address the Vernon Housing Commission on any matter that is within the subject matter jurisdiction of the Commission. The public will also be given a chance to comment on matters which are on the posted agenda during Commission deliberation on those specific matters. PRESENTATION 1. Status of the Rehabilitation Project of the Single Family Housing Unit Located at 4323 Furlong Place Presented by: Felix Velasco, Assistant Engineer / / / / / / Special Vernon Housing Commission Meeting Agenda November 09, 2016 Page 2 of 3 NEW BUSINESS 2. Authorization to Offer All Tenants in Non-Remodeled Units an Opportunity to Relocate to a Remodeled Unit and Establish a Relocation Priority Interest List Recommendation: A. Find that the actions recommended in this staff report do not constitute a “project” pursuant to Section 15378(b)(2) of the Guidelines to the California Environmental Quality Act (“CEQA”), because such recommendations constitute an administrative activity; and even if the adoption of the proposed items did constitute a project, it would be exempt from CEQA in accordance with Section 15061(b)(3), the general rule that CEQA only applies to projects that may have an effect on the environment; and B. Approve the establishment of a temporary/permanent Relocation Priority Interest List to be used for the City Housing Remodel Project which would remain in effect until all units are remodeled; and C. Authorize staff to proceed with offering a temporary/permanent relocation opportunity to tenants in non-remodeled City-owned housing units. LOTTERY - PERMANENT/TEMPORARY RELOCATION PRIORITY INTEREST LIST 3. Conduct a Lottery of All Interested Subject Tenants and Establish a Permanent/Temporary Relocation Priority Interest List (Subject to Passage of Agenda Item No. 2) DISCUSSION AND POSSIBLE DIRECTIVES TO STAFF 4. Preliminary Discussion Regarding Potential Rent Adjustments for all City-Owned Housing Units Recommendation: A. Find that the discussion of potential rental rate adjustments for all City-owned housing units is exempt under the California Environmental Quality Act (“CEQA”) because such is not a “project” as that term is defined in the CEQA Guidelines section 15378, and even if it were a project, it would still be exempt in accordance with Section 15061(b)(3), the general rule that CEQA only applies to projects that may have a significant effect on the environment; and B. Direct staff to develop a rent schedule with increased rates based on the Consumer Price (all items) Index to be presented at a future Vernon Housing Commission meeting. / / / Special Vernon Housing Commission Meeting Agenda November 09, 2016 Page 3 of 3 ORAL REPORTS, PRESENTATIONS & COMMENTS FROM STAFF AND COMMISSION MEMBERS 5. Brief reports, announcements, or directives to staff from the Commissioners and Commission Officers. 6. Upcoming Meetings: A. Next regular meeting: December 14, 2016 at 6:00 p.m. SECOND PUBLIC COMMENT - The public is encouraged to address the Vernon Housing Commission on any matter that is within the subject matter jurisdiction of the Commission. ADJOURNMENT I hereby certify under penalty of perjury under the laws of the State of California, that the foregoing agenda was posted on the bulletin board at the main entrance of the City of Vernon City Hall, located at 4305 Santa Fe Avenue, Vernon, California, and on the City’s website, not less than 24 hours prior to the meeting set forth on this special meeting agenda. Dated this 8th day of November, 2016. By: ________________________________ Maria E. Ayala, CMC Secretary RECEIVED Nov 0 7 2016 CITY CTERK'S OFFICE REGEIVED ]0v 07 ms CITY ADMINISTRATION srAFF REPORT @ r\-l re PUBLIC WORKS WATER AND DEVELOPMENT SERVICES DEPARTMENT DATE: TO: FROM: November 9, 2016 Honorable Members of the Vernon Housing Commission Derek Wieske, Dire.ctor of Public Works, Water and Development Services Department -Vu/ Originator: Felix Velasco, Assistant Engineer fl Status of the Rehabilitation Project of the Single Family Housing Unit Located at 4323 Furlong Place RE Recommendation Receive and file a presentation regarding an update of the rehabilitation project of the single family housing unit located at 4323 Furlong Place. Discussion On April 7,2015, the City Council directed staff to rehabilitate the seven non-remodeled units (two at a time) applying the same standard utilized in the Fiscal Yeu 200712008 Remodel. Subsequently, on July l, 2015, the Ciry of Vemon entered into an agrcement with Y&M Architects to prepare the Architectural drawings to rehabilitate all the non-remodeled City- owned single family residences and convert them into accessible units in accordance with the American Disabilities Act of 1990 (ADA) and the Califomia Building Code. On March 17, 2016 the Public Works, Water and Development Services Departrnent advertised the notice inviting sealed, competitive bids for the renovation of4323 Furlong Place. The notice inviting bids was posted on the Ciry's website and published in the Vemon Sun newspaper, and was also advertised in the following construction related websites: Bid Americ4 Bidboard Construction Contract Advertising, McGraw-Hill Construction, Reed Constnrction Data and Bid Clerk. The specifications included the standard terms and conditions for the contract that was approved by the City Council. The bids for Contract No. CS-0602, City Housing Improvements, were received and opened on April 13, 2016. The calculated bid results were as follows: 1. St. George Groupe, Inc. 2. SD Design Constuction Corp. 3. Dependable Construction Inc. $ 119,875 s 126,300 $ 224,000 On May 17,2016, the City of Vemon entered into an agreement with St. George Groupe, Inc. to remodel the unit located at 4323 Furlong Place. The rehabilitation project of 4323 Furlong Place consisted of building a new kitchen, new bathroom, new laundry room and new accessibiliry ramp that complies with disabled accessibility regulations. Moreover, the scope of work also included the complete rewiring of the electrical system, re-piping of the gas, water and sewer system, new water heating system, new roofing system, new windows, new exterior vinyl siding and new lawn with a new irrigation system. The current remodel project is scheduled to be completed by mid-Novembet 2016. Upon completion of the rehabilitation project, the Public Works, Water and Development Services Department is proposing to host an open house event at the remodeled residence where dl City of Vemon tena[ts will be given an oppornrnity to observe and walk through the remodeled residence. Statr will be available at this event to answer any questions tenants may have in regards to the rehabilitation project, ADA guidelines or any other City housing-related questions. Fiscal Imoact The cost for the rehabilitation of 4323 Furlong Place is approximately $128,000 including $6,000 for appliances. $300,000 was budgeted in the Fiscal Year 2016-2017 to remodel two single family dwelling units. Therefore. barring any significant increase in construction prices. the budgeted amount will be suffrcienl to cover the cost of remodeling one additional unit. Attachment(s) l. Presentation ofplans for the remodel ofthe single family unitlocaled at 432l Furlong Place. 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I-.{ tr bo a)po o tr "6a) a)'6o E 0)I-{ q)(n (6 OJ F] O tr 0.) a.J qJa Jo tr AJ A-,.o (no A o tr Eq) a.)EoI)i a.)Lr Fio (/)oU trq) I-r -qa s(6 C/)t! o Dc vz H Flr F.'t REEE,YED iloy 0 3 Z0t6 cliy ctERl{ s oFt cE RECEIVED r0v 0 3 20fi CITY ADMINISTRATI()N DATE: TO: FROM: STAFF REPORT 4 r'-3-t u PUBLIC WORKS, WATER AND DEVELOPMENT SERVICES DEPARTMENT November 9, 2016 Honorable Members of the Vernon Housing Commission Derek Wiesk ctor of Public Works, Water and Development Services Department Originator: Anthony Zarate, Administrative Secretary iYZ Authorization to Olfer All Tenants in Non-Remodeled Units an Opportunity to Relocate to a Remodeled Unit and Establish a Relocation Priority Interest List RI Recommendation: A. Find that the actions recommended in this staffreport do not constitute a "project" pusuant to Section 15378(b)(2) of the Guidelines to the Califomia Environmental Quality Act ('CEQA), because such recommendations constitute an administrative activity; and even if the adoption of the proposed items did constitute a project, it would be exempt from CEQA in accordance with Section 15061(bX3), the general rule that CEQA only applies to projects that may have an effect on the environment; and B. Approve the establishment of a temporary/permanent Relocation Priority Interest List to be used for the City Housing Remodel Project which would remain in effect until dl units are remodeled; and C. Authorize staff to proceed with offering a temporary/permanent relocation opporonity to tenants in non-remodeled City-owned housing units. Background On October 4, 2016, the City Council of the City of Vemon authorized staff to proceed with the remodel of a second housing urit to accommodate the ongoing City Housing Remodel Project. At this time, the following six units have not yet been remodeled: o 3361 Fruitland Avenue. 3365 Fruitland Avenue Page I of3 . 4f2l Furlong Placeo 4324 Furlong Placeo 4325 Furlong Placeo 4328 Fwlong Place Currently, the following units in the City are vacant and available to accommodate the tenants of the subject single family units: . 3376 E. 506 Street (2BR/1 Bath Apartment). 3353 Fruitland Avenue (2BR/1 Bath House). 60 1 0 Oak Street (2BPJ2 .5 bath Townhouse). 2915 E. 606 Place (28P./2.5 bath Townhouse) Since all non-remodeled units are presently occupied, existing tenants would need to be relocated in order to proceed with the remodel of a second housing unit. On October 4,2016, the City Council directed staff to suwey all tenants in non-remodeled units in an effort to gauge resident interest in a relocation, and develop the least bwdensome method ofvacating non-remodeled units. Staffprovided the affected tenalts in the units listed above the option to choose between temporary and permanent relocations to remodeled and currently-vacant City-owned units. Staff presented the results of this Survey to Ciry Council at its November l, 2016 meeting. The results ofthe Survey have been summarized in the attached Tenant Relocation Survey Results (Attachment 3). The City received responses from all those surveyed in the six non-remodeled unirs listed above. Based on the assessment ofthe Survey results, it has been determined that five ofthe six tenants in non-remodeled units are willing to relocate, either temporarily or permanently to another unit. Of those five tenants, three indicated a preference in permanently relocating to the remodeled housing unit located at 3353 Fruitland Avenue. Two tenants have an interest in temporarily moving to the 3 3 53 Fruitland unit and one tenant is interested in a temporary relocation to the two-bedroom aparfinent located at 3376 E.50ft Street. Two tenants are irterested in relocating to a different City-owned unit in Vemon that may become available at a later time. One tenant has no interest in either a temporary or a permanent relocation to any unit. None of the tenants surveyed had any interest in relocating to either of the condominiums in the City of Huntington Park, whether temporarily or permanently. Staff is now seeking approval from the Vemon Housing Commission to proceed with offering the subject tenants the option to permanently/temporarily transfer to one of the available mits. Any permanent/temporary relocations would be carried out in accordance with the attached Procedure Regarding Leasee/Authorized Occupant Relocation as adopted by the Housing Commission at the September | 4, 201 6 meeting. As such, it is further recommended that the Housing Commission authorize staff to establish a Permanent/Temporary Relocation Priority Interest List by conducting a lottery for the five tenants in non-remodeled units that shared al interest in the relocation oppornrnity. Once established through a lottery, this priority list would remain in effect while the City's Housing Remodel Project is underway and until all units are remodeled. Tenants not interested in a permanent relocation would still have the option of a temporary relocation. Page2 of3 Ifa Permanent/Temporary Relocation Priority Interest List is approved, staff proposes to proceed with the following: l. Conduct a lottery of all interested subject tenants at the Vemon Housing Commission meeting and establish a Permanent Relocation Priority Interest List. 2. Notifr individuals on the priority list of the availability of a remodeled unit in subsequent order until offer is accepted and, upon tenant consent, enter into a new one-year lease for said unit at the current rental rate. 3. Provided there are remaining tenants on the priority interest list, it will remain active for any additional remodel work related to the City Housing Remodel Project. istep 3 will be repeated if and/or when remodeled units become available. It is proposed that the opportunity to join the Permanent/Temporary Relocation Priority Interest List be offered only once to all five interested tenants and be utilized only as it relates to the City Housing Remodel Project. If the Housing Commission supports stalf s recommendation, then staff would immediately goceed with the steps detailed above. Once a non-remodeled unit has been vacated, staff could then initiate the public bidding process and bring a recommendation to award a construction contract to the City Council by euly 2017 , completing construction by September 2017. The costs for the remodel of4323 Furlong Place are detailed in the attached cost breakdown. It should also be noted that the architectural plans were designed to be standardized and applied to the remaining non-remodeled units, resulting in lower architectural design costs for subsequent remodels. Fiscal Impact Based on the cost for the full remodel of the unit located at 4323 Furlong Place, it would be anticipated that any subsequent remodels would be no more than $150,000. There are suflicient funds available in the Fiscal Yeat 2076-2017 1048 (City Housing) account. Provided the Housing Commission approves the temporary/permanent relocation of the tenants in the non-remodeled units, the remodeled, vacant unit selected would immediately begin generating revenue at the current rental rate; and the non-remodeled, vacant writ would be next in line for the Housing Remodel Project. Any costs associated with a permanent relocation would include preparing any remodeled rurit that becomes available for occupancy, which on average costs approximately $500 per unit and relocating costs ranging from $1,000 - $2,000 per move, dependent on the size of the housing unit. Attachments 1. Procedure Regarding Leasee/Authorized Occupant Relocation 2. Contract No. CS-0602: Remodel of4323 Furlong Place Cost Breakdown 3. Results of Tenant Relocation Survey Page 3 of3 Vernon Housing Commission Procedure Regarding Leasee/Authorized Occupant Relocation Pursuant to ordinance l l 83, as amended, and the Vemon Rental Housing Policy (.'vRHP'), the vemon Housing Commission ("vHC") hereby adopts the following procedure to uddr.r, uny lease/authorized oCcupant's need/desire to be re-located, either temporarily or permanentlY. Recitals A. The VHC is committed to managing its housing stock according to "best practices" for private, residential housing. The VRHP requires that all procedures be "neutral, fair, and reasonable." B. Every lease/authorized occupant is entitled to a habitable rental unit' C. On September 19,2012, the VHC adopted its Unit-to-Unit Transfer Procedures ("Transfer Procedures"). D. On December 10.2014, the VHC adopted its Procedures Regarding Temporary Relocation ofLeasees and Authorized Occupants ("Temporary Relocation Procedures"). E. Since the adoption ofthe Transfer Procedures and the TemPorary Retocation Procedures, the VHC has concluded that there is a need for a single, comprehensive, relocation procedure covering both temporary and permanenl relocations. This Comprehensive Relocation Procedure is intended to and does supersede both the Transfer Procedures and the Temporary Relocation Procedures. F. This Comprehensive Relocation Procedure is intended to apply to the following situations: l. TemDorarv Relocation - Ciw Initiated: If, through no fault ofa Leasee, Authorized Occupant, and/or Guest, a rental unit becomes temporarily uninhabitable, as determined by the City, the Leasee and any Authorized Occupants shall be entitled, at the Leasee's option, to be re-located to housing accommodations comparable to the rental unit in good condition for so long as the rental unit is uninhabitable.2. Permanent Relocation - City Initiated: Any leasee of a City of vernon owned housing unit may request a permanent relocation to any other city-owned unit on a priority basis. 3. Permanent Relocation - Tenant Initiated: Any leasee ofa City of vernon owned housing unit may request a permanenl relocation to any other City-owned unit upon availability. Procedure Regarding Leasee/Authorized OccuPant Relocation 2ll'.t1c C. The VHC desires to adopt procedures with respect to the relocation of Leasees and Authorized occupants that are "neutral, fair, and reasonable." The vHC recognizes that unless ir uniformly appliei a relocation procedure to all leasees, it will not be treating all Ieasees neutrally and fairlY. Procedures A. TemporarvRelocations l. When Temporary Relocation is Authorized' Temporary relocation shall be authorized, at City expense, only ifa rental unit is uninhabitable or if it is determined that in light ofrequired ,.puir. io a rental unit, tempolary relocation will facilitate more expedient and .J.t "ff".tiu" repaiis, even when the cost oftemporary relocation is taken into account. Whether relocation should be authorized shall be determined on an objective basis in light ofbest practices for a private landlord, and shall be determined by disinterested City staff and/or ionsultants who have expertise with respect to the subject repair(s). a. Required Relocation. If the City determines that a rental unitis uninhabitable, relocation shall be required until such time as the rental until is retumed to a habitable condition. Habitability shall be determined in light of the rental unit's cunent condition and in light ofthe effect any needed repairs may have on the habitability ofthe rental unit during the course of repairs. b. Optional Relocation. Ifa rental unit is otherwise habitable, a Leasee shall have an option either to accept relocation or to decline relocation, at the Leasee's sole discretion, even if the total cost to repair to the rental unit shall be higher in light of the non-relocation. 2. TyPes ofAlternative Housing' Generally, the type ofaltemative housing to which a Leasee and an Authorized Occupant is entitted shall be determined by the expected length of time altemative housing is required. As a general rule, if a temporary relocation is "*pi.t"d to last no more than 30 days, the relocation shall be presumed to be "short-term." As a general rule, ifa temporary relocation is expected to last for more than 30 days, the relocation ihall be presumed to be "long-term." Any presumption created by this procedure may be overcome if, as determined by the City, and based on the facts and circumstances ofany particular case, an altemative categorization is appropriate. a. Temporary Short-term Relocation. As a general rule, if temporary short-term relocation is authorized, the altemative housing shall be in the form ofa qualifiing hotel or other short-term housing option, as provided for in the ERP, discussed below. b. Temoorarv Lone-term Relocation. As a general rule, if temporary long-term relocation is authorized, the altemative housing shall be in the form ofa comparably fumished apartment with a comparable number of bedrooms and bathrooms as the subject rental unit. Procedure Regarding Leasee/Authorized Occupant Relocation 3ll'.is( 3.ReimbursableRelocationExpenses.lftemporaryrelocationisauthorized, the City shall bea. ull reffionable costs associated with the relocation' including the cost of altemaiive housing, the reasonable cost, ifany, of moving personal possessions fiom and to the rental unit to the timporary housing, and any reasonable increase in food costs, if any, necessitated by the relocation. To ihe extent the City's Expense Reimbursement Policy then in effect (.,ERp',j covers a subject expense, the ERP shall govem the type ofexpense that may be covered and the amount ofioverage. To the extent the ERP does not cover a subject exPense, an expense may be covered only if it is actually incurred, is reasonable as determined by the City, and only for the actual amount ofthe expense. 4. Rent Abatement as an Alternative. If a Leasee who is otherwise entitled to temporary relocation i*t"ud.hoot.t to re-locate on his or her own, the Leasee shall be entitled to rint abatement for the length oftime temporary relocation would have otherwise been authorized. 5'AoorovalRequiredbyCiwAttomevoroutsideCounsel.Iftheamountof expected reimbursable relocation expenses is in excess of$5,000, prior approval ofthe expenditure fiom the City Attorney or outside counsel to the vHC shall be required. B, PermanentRelocations City Initiated Permanenl Relocat ions l. Ifa temporary long-term relocation becomes necessary as set forth in this procedure, the leasee, at the leasee's sole option, may request a permanent relocation to a then vacant City-owned housing unit in lieu ofa temporary long-term relocation' 2. A leasee shall have l0 days from the date ofreceiving notice ofthe need for a temporary long-term relocation to elect a permanent relocation. A permanent relocation may be eiected only ifa housing unit is vacant at the time ofthe election and the vacant unit can be occupied within 30 days ofthe election. 3. Ifa leasee elects a permanent relocation, the leasee shall have priority over all other existing or potential new leasees to select a vacant housing unit' 4. No transfer fee shall be due for a City initiated permanent relocation' 5. Any leasee permanently relocating to a different unit will immediately pay the then established market rent for the unit to which the leasee has relocated. This will require a review and determination of the leasee's credit worthiness to lease such unit. Leasee Initiated Permanent Relocations l. All permanent relocation requests initiated by a leasee must be submitted in writing by the leasee on the anached Permanent Relocation Request Form. Procedure Regarding Leasee/Authorized Occupant Relocatron 4lt'),.gc 2- A leasee must have occupied his,her then current unit for a minimum of one year prior to submitting a Permanent Relocation Request Form' 3. A maximum ofone Permanent Relocation Request Form per leasee will be accepted in any calendar year and shall be valid for that calendar year only' 4. Permanent Relocation Request Forms shall be accepted anytime throughout the year and shall be randomly rank ordered onto a wait list through the same lottery procel condu"ied each June and December for potential new leasees. There shall be no priority given to first responders for leasee initiated permanent relocation requests' 5. After the priority given to existing leasees with a Financial Hardship pursuant to Section 4 ofthe Appial Procedures for Existing Tenants Experiencing Transitional ilardship adopted July 18, 2012, the foltowing order shall be followed. when a vacant housing unit is riady ior leasing, the vacant unit shall first be offered to the leasee who is first on the Tenant Initiated Permanent Relocation Wait List that was in effect at the time the housing unit became vacant. Ifthat leasee either does not want to occupy the vacant unit, or does not qualifl for lhe vacant unit, then the vacant unit shall be offered to the next leasee on the Tenant Initiated Permanent Relocation wait List. If the vacant unit has been offered to all leasees on the applicable wait List, and none ofthe leasees either wants to occupy the vacant unit or qualifies foi the vacant unit, then the vacancy shall be offe red to the appropriate person on the wait list for potential new leasees in accordance with the procedures for that wail Iist 6.Atransferfeeof$l,000shallbedueuponapprovalofatransferrequestto cover the costs associated with preparing the unit for new occupancy. 7. Any leasee permanently relocating to a different unit will immediately pay the then established market rent for rhe unit to which the leasee has relocated. This will require a review and determination ofthe leasee's credit worthiness to lease such unit' CITY OF VERNON CONTRACT No. CS-0602: REMODEL OF 4323 FURLONG PI-ACE COST BREAKDOWN CONSTRUCTION TASKS UnitCost ii.miG"- ca,p"t floot- Replace lhe water heating system (water heater, gas connection line and water connection lines) $ 3,375'00 Patch, paint and texture walls and ceiling $ 8,500 00 Replace sewer drainage system to properw tine $ 1,200 00 Replace exlerior crawl space screens and side vents $ 240.00 lnstall insulated vinyl siding over the exterior gf the house $ 7,600.00 lnstall a door bell S 160.00 Deslqn and install an aulomatic irigation system S 1,850.00 Remove and replace lawn $ 6,000.00 lnstall a 1' concrete mo,v striq around the perimeter of the house $ 960.00 Construct new brick planter I 1,800.00 with 1' vinvl wood blinds and exterior fmures/recessed lighting as noted on the o, carpet with tile Total Construction Cost $ ADA APPLIANCES 127,660.00 Unit Cost s 127,660.00 Additional drywall installation 1 .021 .7 1.103 1 .793 48 83 Total Appliances Cost $6,644 40 $ TOTAL PROJECT COST 9 134,304.40 Page 2 ot 2 $ il8.62Sales Tax tr tr tr o E tr a o I EI a D o I D I !6 , o al D I d E o ! D E o g t zI 8 a o Ix o I o t o t o at E o tt 5o t o Izo I o at o !. EI 6 tt o a E o I o ! d T tr i o L o I D tt o a Eo aI ao ! o tr Id t tr I 6 at o E Eo E o t d t o , ! D t o I E ? ! E D E o , E G I o t o b o a E6 t o I o at o E Eo It Eo t! E Et E u) U)o)&h(I) l-.a ota CS() o& tr CB o)F 3Z a,= ai I I t! E ,1 E! STAFF REPORT CITY ADMINISTRATION RECEIVED Nov 08 20t6 CIIY CLERl('S OFFICE lt 6*l'b DATE: TO: FROM: November 9, 2016 Honorable Members of the Vernon Housing Commission Vernon Housing Commission Rent Subcommittee 4^/ RI, Originator: Derek Wieske, Director of Public Works, Water & Development Services Preliminary Discussion Regarding Potential Rent Adjustments for all City- Owned Housing Units Recommendations A. Find that the discussion of potential rental rate adjustnents for all City-owned housing units is exempt under the Califomia Environmental Quality Act C'CEQA) because such is not a "project" as that term is defined in the CEQA Guidelines section 15378, and even if it were a project, it would still be exempt in accordance with Section 15061 (b)(3), the general nrle that CEQA onJy applies to projects that may have a significant effect on the environment; and B. Direct staff to develop a rent schedule with increased rates based on the Consumer Price (all items) lndex to be presented at a future Vemon Housing Commission meeting. Background According to the City's Rental Housing Policy, as adopted by the Vemon Housing Commission ffHC) on October 5, 2011, "all rents charged by the City of Vemon shall be based on a 'market' valuation, as determined by multiple independent sources." However, the policy goes on to acknowledge that "in setting a 'market' value, the VHC should remain sensitive to the unique industrial and commercial character of the City of Vemon, including various environmental realities that are inherent in the City of Vemon. The VHC should also remain sensitive to t}re limited number of residential resources that the City of Vemon provides, as compared to other locales. Finally, to the extent reasonably practicable, when setting a 'market' value for any particular rental unit, an individualized assessment of the particular rental unit shall be taken into account." Page I of3 On March 9,2016, the VHC conducted a public hearing to consider a new preliminary Five-Year Market Rent Schedule tbr all City-Owned Housing Units in the City of Vernon. At that time, staff recommended an increase of 8.8% over the existing rents in an effort to bring the rents closer to current market rents, as determined by recent appraisals. Those proposed rent increases were based on past independent appraisal reports which considered a variety of thctors, the primary of which was what has come to be known as the "Negative Location Impact" olresiding in Vemon. Said simply, staff indicated that it would be appropriate to discount the rent based on the tact that the City of Vemon did not have the traditional amenities that most communities have, such as parks, grocery stores, and schools beyond the tifth grade. During the public hearing, some tenants provided testimony indicating that proposed increases in the rents were still too high, and did not fairly take into account a number of factors. Ultimately, the VHC voted to create a Rent Subcommittee consisting of Commissioners Ybarra and Garcia to examine the public's concems and to make a recommendation on how to address future rental rate increases. The subcommittee met with staff on two occasions, and discussed each of the three areas of concem, which could basically be categorized into three general areas: l. Negative Location lmpacts: Some residents agreed with the results of the appraisal report that there should be a "discount factor" tbr living in a non-traditional community like Vemon, making rent comparisons to other communities ditlicult. This factor was addressed in the recent appraisal studies. 2. Maintenance Concems: Some residents indicated that the rents should not be increased until several of their outstanding maintenance concems were addressed, including pest control concems. While many of the tenants' maintenance concems have been addressed, some issues such as the need for new kitchen cabinets, have not yet been completely addressed, as some tenants have expressed no interest in new cabinets since their unit is in line tbr the City's Housing Remodel Project, and other tenants do not wish to be inconvenienced so close to the holidays. The attached Unit Maintenance [mprovement spreadsheet shows the status ofunit improvements in greater detail. Additionally, based on staffs latest inspection of the housing stock, two units were tbund to have sustained significant damages beyond normal wear and tear. Statf will present a recommendation regarding pursuing tenant damages at a later time. 3. lmpact of the Exide Facilitv: Some residents indicated that the potential health impacts from the lead in the air emissions of the recently-closed Exide battery recycling facility and the unknown impacts to the residential properties in Vemon have not yet been fully studied, and that more time was needed to determine the impacts. It was, and is still believed, that it will take several years tbr the former Exide facility to be remediated. The State, through its Department olToxic Substances Control, has been the lead agency, but has not yet been able to completely identity all of the environmental impacts of the tbrmer plant, and has indicated that more funding is needed to fully remediate the site and its surroundings. Therefore, the impact on rents, both in Vemon and the surrounding areas, is diflicult to quantiry at this time (even tbr real estate experts), as new information is continuously being released. Page 2 of 3 The Rent Subcommittee is recommending that the VHC implement a rent increase based on the Consumer Price (all items) Index, or CPl. The VHC recogrizes that the rents need to be increased to close the deticit between revenues and expenses. The CPI is a nationally recognized index used to track inflation and is published by the U.S. Bureau of Labor Statistics to measure the change in prices paid by consumers for a representative group ofproducts and services. As an example, the percent increase of the all items CPI ttom August of20l5 to August of20l6 is l.l% (please see attached sample rent schedule). However, there is no certain way of knowing what the CPI will be next year. Considering there is a need to increase the rents over time to keep up with market rates and elevate revenues to meet expenses while simultaneously adhering to tenant concems, the subcommittee is recommending that the VHC adjust rental rates based on the (all items) CPI. Utilizing, this well-established index would satisty the need to close the gap between existing rents in Vemon versus nearby rental markets. This would provide the City with more time to address some of the outstanding issues related to bringing the rent closer to market rates. If the Commission ultimately supports this recommendation, then each tenant would be given the opportunity to sign a new lease agreement, or be given at least 60 days to vacate the premises. According to the City's Housing Policy, all new leases shall be for a term ofone year, and renewals ofleases shall be for a term no longer than one year, without limitation on the number ofrenewals, so long as a leasee is in good standing. The subcommittee further recommends that the monthly rents continue to be adjusted by the Commission based on the CPI on an annual basis. If the Commission supports this recommendation, statT would develop a rent schedule accordingly and proceed with a public hearing at its next meeting notifying all tenants ofthe proposed rent increase. Fiscal Impact Based solely on the August 2015 to August 2016 (all items) CPI of l.lVo, the estimated, annual revenue in rental income for all housing would be $3 19,714 at full occupancy, not accounting for any vacancies or loss of revenue during tumover. The (all items) CPI is subject to change year over year and the percentage ofany proposed rental adjustments will fluctuate accordingly. Attachments I . August 20 I 5 - August 201 6 Consumer Price Index Sample Rent Schedule 2. Unit Maintenance Improvements Page 3 of 3 August 2015 - August 2016 Consumer Price Index Sample Rent Schedule Unlt Unlt lypc B.thj lncr.... glll2ols by r.lo,b CPI R.nt S.mpla R.nt B.rcd on CPt (All lt.m.) 3345 Frurtlaod 3bd-house 2 l. 19o 1,164.00 12 804 1,176.80 3349 Frurtland 2bd-house 1 l.lo/o 968.00 10.648 978.6s 3353 Fruitland 3bd-house I 1. Lo/o 1,114.00 72.254 I,t26.25 3357 Fruitland 3bd-house I 1. r%1,114.00 72.254 I,t26.25 3361 Frurtland 3bd-house 1 l.lo/o 1,043.00 11,.473 L,O54.41 3365 Frurtland 2bd-house 1 l.lo/o 914.00 10.054 924.05 0.00 3376 E. 50th 2bd-apt 2 L.lo/o 839.00 9.229 848.23 3378 E.50rh 2bd-apt 1 l.lo/o 839.00 9.229 848.23 3380 E. 50th lbd-a pt 1 l. I o/o 696.00 7.656 703.66 3382 E.50th 1M-a pt 1 L.lo/o 696.00 7 656 703.66 3384 E. 50rh lbd-a pt 1 l.1o/o 696.00 1.656 703.66 3386 E.50th 1bd-a pt 1 l.lo/o 696.00 1 .656 703.66 3388 E, 50rh 2bd-apt 1 l.lo/o 839.00 9.229 848.23 3190 E. 50rh 2bd-apt 1 L.1o/o 839.00 9.229 848.23 000 3550 Vernon 3bd-house 1 L.lo/o 1,114.00 72.254 t,t26.25 3560 Vernon 2bd-house 1 l.lo/o 985.00 10.835 995.84 4321 Furlonq 3bd-house 1 l.lo/o r,000.00 11 1,011.00 4322 Furlonq 3bd-house 1 l. Lo/o r,071.00 11.781 1,082.78 4323 Furlonq 2bd-house 1 l.1olo 854.00 9.394 863.39 4324 F\rrlonq 2bd-house 1 l.lolo 854.00 9.394 863.39 4325 Furlonq 2bd-house 1 1. 19o 854.00 9.394 863.39 4326 Furlonq 2bd-house 1 1. 19o 925.00 10.175 93 5.18 4327 Furlonq 2bd-house 1 r. 1%925.00 10.175 93 5.18 4328 Furlonq 2bd-house 1 l.lo/o 854.00 9.394 863.39 4329 Furlonq 3bd house 1 L.lo/o 1,071..00 71,.781 1,082.78 4330 Furlonq 3bd-house 1 L.lo/o 1,089.00 11.979 1,100.98 0.00 6010 Oak #B HP 2bd-cond r.ro/o 1,200.00 L3.2 7,2L3.20 29r5 E. 50th #S HP 2bd-cond 2.5 r. 1olo 1,100.00 L2.r 1,112.10 TOTAI ANNUAL REVEI{UE 26,353.00 3r6,236.OO 26,642.44 319,714.60 289.88 3,474.60 -z -t z|-'i!z za l! Ezata C C 5 C e t) C Czz c o t\) ctr o t\) o. 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