With redevelopment agencies throughout the State preparing to close their doors at midnight tomorrow night, many questions are being asked about the impact of the dissolution on the City of San Jose's Housing Department.
The City's Housing Department has administered the 20% Low and Moderate Income Housing Funds for more than twenty years through a cooperation agreement with the San Jose Redevelopment Agency. Consistent with the requirements of the new State law (AB X1 26), on Tuesday, January 24th, the City Council took the steps needed to elect to accept the housing assets and functions of the former Redevelopment Agency. This action officially transferred more than 900 20%-funded loans and seven real estate parcels purchased with 20% funds to the City.
Including the 20%-funded loans and loans made from other funding sources, the Department administers a loan portfolio of over $800 million. With more than twenty different funding sources, the Department will continue to oversee the existing portfolio, will make new multi-family and single-family loans, will administer programs for various special needs populations (including the homeless and renters), and will oversee programs to strengthen San Jose's neighborhoods.
The legislation ensures that all debt and obligations of the 20% fund are honored. No new 20% funds will flow to the Department, and any funds not needed for these debts and obligations can be used to pay other obligations or will be distributed to other taxing jurisdictions. For San Jose, this means that we have an estimated $9 million reduction in resources for housing programs. (Note: Although the 20% Fund was close to $38 million this past year, $29 million was needed to pay for bond debt.) To make up for these lost funds, we plan to seek new funding sources, to strategically manage the loan portfolio, and to use in lieu fees from the City's new inclusionary ordinance, which will go into effect next January. Creative solutions will be even more important as other funding sources for housing and community development efforts, including those at both the federal and State level, are being impacted as well.
The City is in the process of updating its Housing Investment Plan (HIP), which will be brought forward to the City Council later this calendar year. The HIP will include recommended actions and investment strategies that ensure that the City of San Jose continues to be a leader in the State in housing its lower- and moderate-income residents. We won't be doing this alone-we will need the assistance and commitment of our partners to make this a reality.
