1. Public Hearing Draft One-Year Action Plan 2004-2005 March 30, 2004

2. Background Each year the City must prepare a One-Year Action Plan which updates the Consolidated Plan. Each year the City must prepare a One-Year Action Plan which updates the Consolidated Plan. The Consolidated Plan is a five-year planning document that establishes a strategy for addressing community needs and identifies priority activities. The Consolidated Plan is a five-year planning document that establishes a strategy for addressing community needs and identifies priority activities. Activities must be an identified Priority Need and meet a National and Local objective. Activities must be an identified Priority Need and meet a National and Local objective.

3. Background Priority Activities Housing Rehabilitation & New Construction. Housing Rehabilitation & New Construction. Home Buyer Assistance. Home Buyer Assistance. Homeless Programs. Homeless Programs. Economic Development. Economic Development. Public Improvement Programs. Public Improvement Programs.

4. NATIONAL OBJECTIVES 1.Providing benefits to low and moderate income persons 2.Eliminating slums and blight 3.Meeting an urgent community need

5. LOCAL OBJECTIVES 1.Housing and neighborhood preservation including new housing opportunities 2.Economic development through job retention and creation activities 3.Public facilities and improvements limited to the support of objectives 1 and 2 4.Elimination of blight and blighting elements limited to the support of objectives 1 and 2 5.Special programs offering significant community benefit and in direct support of objectives 1 and 2

6. One-Year Action Plan One-Year Action Plan One-Year Action Plan  Sets forth the use of CDBG, HOME and ESG Funds for 2004-2005.  Describes how the planned activities are consistent with priority activities identified in the Consolidated Plan.  Involves citizen participation.  Re-evaluates 5-year goals/strategies and makes any necessary adjustments.

7. Process A Notice of Funding Availability was published in The Record and mailed to over 135 various agencies and interested groups. A Notice of Funding Availability was published in The Record and mailed to over 135 various agencies and interested groups. A Needs Assessment Hearing was held on November 17, 2003, to obtain citizens input on local needs and open the application process. A Needs Assessment Hearing was held on November 17, 2003, to obtain citizens input on local needs and open the application process. Deadline for submission of all funding request applications was January 5, 2004. Deadline for submission of all funding request applications was January 5, 2004.

8. Process (continued) All funding requests were reviewed by the Community Development Committee (CDC) members and staff for: Meeting National objectives Meeting National objectives Eligibility Eligibility Consistency with the Consolidated Plan Consistency with the Consolidated Plan Council-adopted Local Objectives Council-adopted Local Objectives Organizational capacity and experience Organizational capacity and experience

9. Process (continued)  The CDC held 5 meetings to review funding requests and hear applicant presentations.  Summary of applications and status given in The Week That Was (11/17/03, 1/23/04, 1/30/04, 2/27/04, and 3/19/04). (11/17/03, 1/23/04, 1/30/04, 2/27/04, and 3/19/04).  On March 11, 2004, the CDC finalized its recommendations for funding.

10. Process (continued)  A notice of the Public Comment period and Public Hearing was published in The Record on March 16, 2004.  Tonight’s Public Hearing will provide an opportunity for citizens to comment on the draft 2004-05 One-Year Action Plan.

11. Present Situation Program 2003-04 Entitlement 2004-05 Entitlement Difference (%) CDBG$5,101,000 $5,022,000 $5,022,000(1.6)% HOME$2,363,673 $2,353,529 $2,353,529(0.4)% ESG ESG$172,000 $186,592 $186,5928.5% Total Entitlements $ 7,636,673 $ 7,562,121 (1.1)%

12. CDBG Funds 2004-05 New Entitlement $ 5,022,000 Projected Program Income 2004-05 $ 1,015,459 Carryover Projects/Funds 2003-04 $ 7,586,123 Sharps Lane Villa Payment$ 30,000 Total CDBG Revenue$13,653,582

13. 2003-04 New Allocation Allocation Administrative Support $1,269,240 $1,171,109 Program Delivery Code Enforcement $928,152 $963,723 Housing Program Operation $1,145,480 $1,376,525 Planning $180,153 $212,063 Housing & Neighborhood Revitalization Emergency Repair Fund$170,743 $300,000 Neighborhood Improvement Funds (e.g. ACT) $487,176 $250,000 Housing Loan Pool $2,353,332 $1,242,022 Housing Project Funds $1,000,000 CDBG Funds 2004-05

14. Sub-Recipient Assistance - Recommendations CDC San Joaquin Fair Housing $135,262 Boy’s and Girl’s Club $ 60,000 Child Abuse Prevention Council$565,612 Delta Health Care$ 48,134 Ebenezer Economic Development Corp.$ 60,854 Gtr. Stockton Chamber Incubator $ 78,400 Gtr. Stockton Emergency Food Bank $ 3,500 Second Harvest $ 20,000 Cold Weather Shelter $ 25,000 Total $996,762 Sub-recipients Underway $197,190

15. CDBG Funds 2004-05 2003-04 New Allocation Allocation Economic Development Program Facade Loan Emergency Grant, Rehabilitation Loan Pool & Downtown Incentive Program $510,806 $400,000 Debt Service Section 108 Loan Repayment $2,383,120 $1,076,398 Loan Foreclosure $417,655 $362,336 Capital Improvement Program Target Area Street Improvements $1,137,000 $1,192,000 Alley Abandonment $37,478 $25,000 Public Improvements Underway $ 2,429,354 $2,888,454 TOTAL 2004-05 CDBG USES $ 13,653,582

16. HOME Funds 2004-05 New Entitlement$2,353,529 Projected Program Income 2004-05 $1,342,718 Carryover Projects 2003-04 $3,854,117 American Dream Downpayment Initiative $192,817 Total HOME Funds$ 7,743,181

17. HOME Funds 2004-05 USES OF FUNDS 2003-04 Allocation 2004-05Allocation Administrative Support $494,127$368,614 Program Delivery $252,518$430,780 CHDO 15% Set Aside $354,551$353,029 CHDO Set-Aside Carryover CHDO Set-Aside Carryover$903,922$407,579 CHDO Operating Assistance $148,000N/A CHDO Predevelopment Fund $ 66,465 N/A Homebuyer Assistance Program $800,000$800,000 American Dream Downpayment N/A$192,817 Single-Family Housing Pool $5,226,150$5,190,362 Multi-Family Housing Pool Rental Rehabilitation Pool Total 2004-05 HOME Uses $8,254,733$7,743,181

18. Emergency Shelter Grant (ESG) Funds 2004-05 Organization 2003-04 Allocation 2004-05 Allocation Difference Center for Positive Prevention Alternatives $ 6,000 $ 6,510 $ 510 Gospel Center Rescue Mission $16,939$18,376$1,437 Haven of Peace Emergency Shelter $23,714$25,726$2,012 St. Mary’s Interfaith Dining Room $50,816$55,126$4,310 Stockton Shelter for the Homeless $47,429$51,452$4,023 Women’s Center of San Joaquin County $27,102$29,402$2,300 Total ESG Uses $172,000$186,592$14,592 Grant Funds for Stockton’s Homeless Service Providers

19. Proposed Housing Program Revisions (effective 7/1/04) WHY are Revisions needed? Incomes have not kept up with increases in housing prices. In one year, the median home price has increased 13% ($225,000 vs. $255,000). The sales price of home in Stockton have tripled in the last five years. Incomes have not kept up with increases in housing prices. In one year, the median home price has increased 13% ($225,000 vs. $255,000). The sales price of home in Stockton have tripled in the last five years. Families can only afford houses at the lower end of the market. These need repairs and most new owners don’t have the funds available. Families can only afford houses at the lower end of the market. These need repairs and most new owners don’t have the funds available.

20. WHAT do recent home sales indicate? February Home Sales CITY # SOLDFeb. 2003Feb. 2004 % CHANGE San Joaquin County 892$ 245,000$ 275,00012.24% Lathrop15$ 236,000$ 263,00011.44% Lodi53$ 225,000$ 240,0006.67% Manteca110$ 247,000$ 291,25017.91% Ripon25$ 265,000$ 319,00020.38% Stockton515$ 225,000$ 255,00013.33% Tracy157$ 337,000$ 360,0006.82%

21. WHAT is the current situation? A combination of market changes and program restrictions have made City’s programs less accessible. A combination of market changes and program restrictions have made City’s programs less accessible. The current housing programs limit opportunities for qualified residents. The current housing programs limit opportunities for qualified residents.

22. WHAT changes are proposed? All Programs (except Rental) have grant or forgivable loan component. All Programs (except Rental) have grant or forgivable loan component. Grant to Seniors (60+) and people with Special Needs. Grant to Seniors (60+) and people with Special Needs. Forgivable Loan (0% interest) to all others. Loan is forgiven if people remain in the house for 7 yrs or more. Forgivable Loan (0% interest) to all others. Loan is forgiven if people remain in the house for 7 yrs or more. All Programs available citywide (except Rental and Neighborhood Improvement). All Programs available citywide (except Rental and Neighborhood Improvement).

23. Emergency Repair Program Proposed Revisions ProgramTerms Emergency Repair (Interior/Exterior repairs) Up to $10k grant for Seniors/Special Needs or Forgivable Loan >7 yrs for everyone else.

24. Housing Rehabilitation Program Proposed Revisions ProgramTerms Housing Rehab (Major Repairs Interior/Exterior) Up to $5k grant/forgivable loan. Portion of grant/forgivable loan could be used to write down ratios. Up to $5k grant/forgivable loan. Portion of grant/forgivable loan could be used to write down ratios. Rehab loan (up to 3% fixed interest, loan amount subject to underwriting ratios) Rehab loan (up to 3% fixed interest, loan amount subject to underwriting ratios)

25. Housing Reconstruction Program Proposed Revisions ProgramTerms Housing Reconstruct (Rebuild home) Up to $5k grant/forgivable loan Up to $5k grant/forgivable loan Rebuild loan (up to 3% interest) subject to underwriting guidelines. Rebuild loan (up to 3% interest) subject to underwriting guidelines.

26. Rental Housing Program Proposed Revisions ProgramTerms Rental (Rehab rental properties) Minimum loan of $1k per unit, not to exceed a subsidy of $25k per unit and $250k per project. Minimum loan of $1k per unit, not to exceed a subsidy of $25k per unit and $250k per project. HUD guidelines require units to be rented to qualified residents for a number of years. HUD guidelines require units to be rented to qualified residents for a number of years.

27. Neighborhood Improvement Program Proposed Revisions ProgramTerms Neighborhood Improvement (For property owners within targeted areas to make interior and exterior repairs) Up to $5k grant/forgivable loan and up to $10k grant/forgivable loan if matched by owner. Up to $5k grant/forgivable loan and up to $10k grant/forgivable loan if matched by owner. Restricted to Target and Action Team Areas and Safe Neighborhoods. Restricted to Target and Action Team Areas and Safe Neighborhoods.

28. Housing Assistance Program Proposed Revisions ProgramTerms Housing Assistance (1 st Time Homebuyer and Rehab) Up to $50k for downpayment (up to $5k of which can be used for closing costs, etc. and would be a grant/forgivable loan). Remainder would be 0% interest, 30 year loan. Up to $50k for downpayment (up to $5k of which can be used for closing costs, etc. and would be a grant/forgivable loan). Remainder would be 0% interest, 30 year loan. Up to $50k for rehab loan (up to 3% fixed interest) and loan amount subject to underwriting ratios. Up to $50k for rehab loan (up to 3% fixed interest) and loan amount subject to underwriting ratios. Minimum 1 year Stockton resident. Minimum 1 year Stockton resident.

29. HOW much financial assistance do homebuyers need? 1.Income maximum for family of 4 (at 80% of median income): $44,100 2.Median Home Sales Price: $255,000 FHA Mortgage Limit for Low Income Family: $160,176 Affordability Gap = ($94,824) Affordability Gap = ($94,824) 3.Down Payment Assistance Program increase: from $30,000 to $50,000 Funding Deficiency after Assistance would be decreased: from $64,824 to $44,824 from $64,824 to $44,824

30. WHY do homebuyers also need rehabilitation assistance? LOW-END HOUSING CONDITIONS Obstacles to purchasing housing that is in the $170,000 range (33% below area median) include: Limited in supply and selection Limited in supply and selection Dwellings that are of substandard quality Dwellings that are of substandard quality Dwellings that meet minimum standards are often in need of immediate maintenance Dwellings that meet minimum standards are often in need of immediate maintenance Sellers that are unwilling to improve conditions up to Section 8 standards Sellers that are unwilling to improve conditions up to Section 8 standards Following the purchase of a home, the low income buyer does not have additional funds available to make needed repairs and maintain their new home Following the purchase of a home, the low income buyer does not have additional funds available to make needed repairs and maintain their new home

31. HOW can the City enrich the Housing Programs? Authorize staff to modify program guidelines for administrative consistency and to ensure compliance with HUD guidelines. Authorize staff to modify program guidelines for administrative consistency and to ensure compliance with HUD guidelines. Streamline loan processing procedures to reduce turn-around time. Streamline loan processing procedures to reduce turn-around time. The Housing Program Revisions will be brought before the City Council for approval with the Action Plan on April 27, 2004. The Housing Program Revisions will be brought before the City Council for approval with the Action Plan on April 27, 2004.

32. Council Action 1. Invite comments from the general public. 2. Council to consider CDC recommendations for the funding of applicants. 3. Council to direct staff to review comments and modify draft One-Year Action Plan as appropriate.

33. Council Action 4. All comments, technical corrections, and Council directions to staff will be summarized and included in the final One-Year Action Plan. 5. The final Action Plan will be presented to the Council on April 27, 2004. 6. Final 2004-05 Action Plan will be submitted to HUD on May 12, 2004.