PROGRAMS & FUNDING

Federal HOME and ESG Funds

The City of Paso Robles does not directly receive federal funds under the Home Investment Partnership (HOME) and Emergency Shelter Grant (ESG) Programs. Those funds are allocated to the County of San Luis Obispo, which has agreed with other participating cities in the county to cooperate in the allocation of these funds.

100 percent of HOME and ESG funds must be used to benefit low-income persons. HOME funds may be used to construct or rehabilitate housing, acquire property for housing, construct street improvements adjacent to low income housing, purchase affordability covenants (under which rents would be limited to the amount that low income persons can afford), provide first-time homebuyer second mortgage loans, provide rental subsidies and other related uses. ESG funds may be used to construct and operate emergency shelters for homeless persons; they may also be used to purchase motels rooms for the homeless.

The City of Paso Robles has benefited from HOME funds allocated to a countywide first-time homebuyers second mortgage program. The County has allocated HOME funds to the Canyon Creek and Creekside Gardens Apartment Projects to be developed in Paso Robles by Peoples’ Self-Help Housing Corp.

ESG funds have been spent to support the operation of the homeless shelter and homeless day center in San Luis Obispo, facilities that serve the homeless needs of the entire county. ESG funds have also been used to support the operations of women’s shelters in San Luis Obispo and in Atascadero.

Low and Moderate Income Housing Fund

State law requires that 20 percent of all property tax increment revenue received by the City’s Redevelopment Agency be placed in a “Low and Moderate Income Housing (LMIH) Fund”, which is to be used for the purposes of increasing, improving, and preserving the community's supply of low- and moderate-income housing available at affordable housing cost (as defined by state law) to persons and families of low or moderate income. (State definitions of income levels apply: low income = 80% or less of County Median Income; moderate income = 80 – 120% of County Median Income.)

LMIH funds may be used to construct or rehabilitate housing, acquire property for housing, construct street improvements adjacent to low income housing, purchase affordability covenants (under which rents would be limited to the amount that low income persons can afford), provide first-time homebuyer second mortgage loans, provide rental subsidies and other related uses.

The use of LMIH funds is guided by the Redevelopment Implementation Plan, which must be adopted every five years. The 2004 Redevelopment Implementation Plan sets the following priorities for use of LMIH funds:

1. New Multi-Family Housing: Promote the development of rental units throughout the City, but particularly in the Redevelopment Project Area, the mixed use and senior housing overlays, the Chandler Ranch, Olsen and Beechwood Annexation areas, and in areas with easy access (e.g. via public transportation) to Cuesta College. Towards this effort, the Agency may enter into participation agreements with housing developers to provide LMIH funds as grants or loans for such expenses as land acquisition, payment of City fees, construction of off-site improvements, and/or housing construction costs.
    
2. First-Time Home Buyers Assistance:
   
   a.  Provide deferred payment, below market rate interest, second trust deed loans to low and moderate income buyers. Loan proceeds could be used to close the affordability gap, for a down payment, and/or for closing costs. Resale price restrictions and equity sharing provisions would be incorporated into such loans.
   
   b.  Use LMIH funds to supplement other sources of first-time homebuyers loan funds, such as CalHome funds, to offset the costs of loan administration.
    
3. Preservation of Subsidized Housing: Should one or more of the five existing subsidized apartment complexes in the City become eligible for conversion to market rate, their subsidy contracts require the owners to first offer the complex for purchase by a non-profit housing corporation. Non-profits may need assistance for the costs of purchasing and rehabilitating the units.
    
4. Housing Rehabilitation Assistance: Provide grants or loans of LMIH funds to low income owners of housing to enable them to make necessary repairs to maintain their homes in viable condition and prevent the possible loss of existing affordable housing. LMIH funds would also need to be used to hire contracted assistance in administering such a program.

The 2004 Redevelopment Implementation Plan also includes the following text: 

"It should be noted that there are numerous other eligible uses of LMIH funds for assisting affordable housing projects.  It is possible that an opportunity to assist a project that conforms to Housing Element priorities, yet is not described in the above Implementation Plan priorities, may be presented to the City and Agency within the period of this Plan.  In such a case, the Agency may, after obtaining a review and recommendation from the Project Area Committee, chose to allocate LMIH funds to such a proposal without amending this Implementation Plan."

Since adoption of the Redevelopment Plan in 1987, LMIH funds have been used and/or approved for the following projects and programs:

Housing Rehabilitation Loans  Between 1988 and 1991, the Redevelopment Agency provided $49,300 in LMIH Funds to supplement 1988 CDBG funds for housing rehabilitation. LMIH funds were used to construct street improvements (curbs, gutters and sidewalks) that City Codes required to be installed as a condition of issuance of a building permit for rehabilitation. One low-income homeowner and 6 very low-income homeowners were assisted with zero percent interest, deferred payment loans, due in 15 years or on transfer of property.

Los Robles Terrace  In 1991, the Redevelopment Agency granted $119,730 of LMIH Funds to assist the development of Los Robles Terrace, a 40-unit apartment complex for low- and very low-income elderly and physically disabled persons, which was primarily funded by a combination of Federal Section 202 funds from HUD and a CDBG Grant. LMIH funds paid for the complex’s share of City development impact fees.

George Stephan Center  In 1994, $73,800 in LMIH funds were used to install modular units to comprise an interior recreation/activity center at Oak Park Public Housing, which consists of 148 low- and very low-income apartment units, located between 28th and 34th Streets, east of Park Street.

Disaster Assistance Loan  In 1995, a loan of $10,000 in LMIH funds was made to a low-income homeowner to supplement federal disaster assistance funds to repair damage to the owner’s home from a mudslide caused by heavy rains.

Habitat for Humanity  In 1998, the Agency granted $35,000 in LMIH funds to pay for the City’s development impact and building permit fees for three single-family homes to be constructed by Habitat for Humanity at 2947, 2949, and 2951 Vine Street for low-income families. Construction of the first home was commenced in 1999; the third home was completed in 2002.

First-Time Homebuyers Assistance  In 2000, $25,000 in LMIH funds were used as a match for $100,000 in Federal HOME funds for providing deferred-payment second mortgage loans to low income first-time homebuyers. In 2001 and 2002, a total of $15,600 in LMIH funds were approved for use to defray the costs of loan administrative fees for first-time homebuyers loans under the CalHome Program.

Canyon Creek Apartments  In 2001 and 2005, the Redevelopment Agency approved a loan of $300,000, and a grant of $387,000 in LMIH funds to assist Peoples’ Self-Help Housing Corp. develop 68 apartment units on the southwest corner of Nicklaus Drive and Oak Hill Road. The County has approved a loan of $250,000 in HOME funds to this project.

Creekside Gardens Apartments  In 2001 and in 2002, the Redevelopment Agency approved a grant of $635,000 in LMIH funds to assist Peoples’ Self-Help Housing Corp. develop 29 senior apartments on the northwest corner of Nicklaus Drive and Oak Hill Road.

Chet Dotter Senior Apartments In 2001, 2002 and 2005, the Redevelopment Agency approved grants totaling $1,745,000 to assist the Housing Authority prepare environmental documents and architectural plans, to offset the cost of City Development Fees and for construction costs for a proposed 40 unit senior apartment complex on the northeast corner of Park and 28th Streets. This project was initiated with an Economic Development Initiative Grant of $500,000 from the federal government (via HUD).