Hollister council members Monday approved a $300,000 loan for an upcoming westside affordable housing project.
On March 20, council members awarded $700,000 to the Community Housing Improvement Systems and Planning Association, also known as CHISPA, for a 48-unit senior apartment affordable housing project on Line Street on the west side. The project proposal identified Section 8 vouchers and tax credits as funding sources.
According to the meeting agenda, CHISPA was awarded 48 Section 8 vouchers. The housing developer will apply for tax credits in June.
Mayor Ignacio Velazquez recused himself at the start of the discussion due to his working relationship with CHISPA.
Housing Program Coordinator Trisha Lee explained that CHISPA will face a competitive application process for the credits.
“The award of tax credits from the California Tax Credit Allocation Committee is a highly competitive application and the strongest application usually comes out on top,” Lee said. “A strong application consists of multiple parts, one being the maximum amount of community funding as possible.
“CHISPA is seeking $300,000 in additional funds to ensure their application with the California Tax Credit Allocation Committee is as strong as possible with supplemental funding that can be leveraged with the application for a potential tiebreaker scoring.”
Lee said the additional $300,000 is conditional upon receipt of the tax credits.
Councilman Ray Friend questioned the source of funding for the loan. City Manager Bill Avera said the money was in a fund set aside by the defunct Redevelopment Agency.
Vice Mayor Karson Klauer asked how much money was in the fund after the March allocation of $700,000. Lee said that the fund would be just over $2 million after the city spends the money budgeted for the year. The fund would be a little over $500,000 by Fiscal Year 2018-19.
Housing Program Manager Mary Paxton explained that the city needs to meet two thresholds relating to the fund by 2019.
“If our fund balance is more than a million, then there’s penalties on expenditure that’s called the excess surplus,” Paxton said. “The other is we’ll be reporting annually and we have to spend at least 30 percent of our funds on extremely low income rental housing. So one of the reasons we issued the (request for proposal) earlier this year for $700,000 was to be sure that we meet that target.”