HUNTINGTON BEACH : City to Issue Bonds for Housing Complex

A 164-unit senior citizens housing complex, to be financed with the help of $9.5 million in city-issued revenue bonds, was approved by the City Council this week.

The project, part of the city’s redevelopment program, will be built on a 1.89-acre site in the Five Points area at Main and Florida streets.

Seeking to bolster a sagging level of affordable housing units, city officials agreed to issue the bonds for the developer in exchange for a guarantee that 48 of the units will be moderately priced.

The bonds are to be repaid with income from the housing project, so the city is not liable for repaying them, city officials said.

By using revenue bonds, the developer may take advantage of the city’s tax-exempt status.

The city will also help finance the project by granting the developer $500,000 and loaning another $250,000. That money will come from a Redevelopment Agency account established expressly for affordable housing projects.

Six council members supported the project and its financing package. Councilman Don MacAllister backed the project but said he objected to the city’s providing $750,000 in additional financing.

“I have a problem with the city putting in $750,000 when the developer is putting in 15%” of the total cost, MacAllister said. He added that he also opposes the restrictions the city has placed on the project in order to secure the affordable units.

Councilman Jim Silva said he also had reservations about the loan-grant package, but, noting that the funds are set aside specifically for affordable housing developments, agreed to support the proposal.

“I, too, have a problem with the $750,000 . . . but, overall, I believe the city will receive a definite benefit from this,” Silva said.

Of the affordable housing units, 32 will be priced for very-low income households. This is defined as those earning less than 50% of the median income in Orange County, or $26,100 for a household of two.

Another 16 units will be priced for low- and moderate-income households, earning less than 120% of the county median income, or $62,650.

Because of its extensive, five-area redevelopment program, the city has come under pressure to provide more affordable housing. State law requires that cities provide affordable housing units in redevelopment projects, and Huntington Beach has fewer affordable units than the law requires.

The complex’s 164 units will be rented only to senior citizens.