Housing Funds Used to Repay City Bonds, Loans

Faced with a growing housing crunch, many cities are struggling to find money to support housing programs, especially for low-income residents.

Port Hueneme is not one of those cities.

In fact, the city’s Redevelopment Agency has deferred more than $2.8 million in legally mandated obligations for housing programs for low- and moderate-income families.

The money has been used instead to repay city loans and bonds issued by the agency for various commercial and residential projects.

The city’s Redevelopment Agency is the only one in the county that owes money to its housing fund. And while the agency at one time had assured the state that the agency would repay the money by June 1999, officials now say it may take 20 years because of other outstanding debts.

Officials defend the deferral, saying there are no developers now interested in becoming a partner with the city to build affordable housing.

“There’s nothing to spend it on,” Mayor Jonathan Sharkey said. “It’s very difficult for us to do something unless there is a private developer or partner that is interested.”

City Finance Director Jim Hanks also questioned how far the deferred money would go toward providing affordable housing, estimating that about 50 apartments could be built with the money.

“Three million dollars is not going to solve the current housing problem,” he said. “It’s not even going to spit on it.”

Some housing advocates disagree.

“We’ve been frustrated by the lack of land on the one hand, but on the other hand the city for a number of years has not had new development as a priority,” said Rodney Fernandez, executive director of Cabrillo Economic Development Corp., which builds affordable housing throughout the county.

“The reason there’s not enough projects is because there hasn’t been enough emphasis on doing projects,” he said.

Eileen McCarthy, staff attorney with the Oxnard office of the nonprofit advocacy group California Rural Legal Assistance, said $2.8 million could help address what she said is a growing shortage of affordable housing.

“Given the scarcity of dollars for new construction development, it is a significant amount of money,” she said.

The money held by the Redevelopment Agency is derived from so-called “tax increments,” or extra tax money collected when property values increase in a redevelopment project area.

Under state law, redevelopment agencies formed after 1977 must spend 20% of those tax increments to assist or develop housing for low- and moderate-income families. Redevelopment agencies that began projects before 1977, including the Port Hueneme Redevelopment Agency, were allowed to defer those payments.

From 1987 to 1995, the Port Hueneme agency deferred more than $2.8 million from the Central Community Project, a 415-acre commercial and residential redevelopment project area in southeast Port Hueneme.

The money will not be repaid until all of the project’s debts are settled, said Hanks, the city finance director. He said the debts include a $4-million loan from the city and $2.7 million in bonds. That could take 17 to 22 years, Hanks said.

Mayor Sharkey said the city, which is sandwiched between Oxnard and the ocean, has limited opportunities to build housing because it does not have the option of expanding its borders. If an opportunity arises, he said, officials would find a way to fund the project.

“If there’s a good and viable project, there’s ways to make things happen,” he said.