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RESOLUTION APPROVING THE ALLOCATION OF ARTICLE 34 LOW-INCOME HOUSING UNITS TO THE SATELLITE APARTMENTS, HARDING WAY APARTMENTS, AND CALAVERAS QUARTERS APARTMENTS
recommended action
RECOMMENDATION
It is recommended that the City Council approve a Resolution:
1. Approving the allocation of 30 units of affordable housing for the Satellite Apartments rehab/conversion project.
2. Approving the allocation of 24 new units of affordable housing for the Satellite Apartments new construction project.
3. Approving the allocation of an additional 9 new units of housing for the Harding Way Apartments rehab/conversion project.
4. Approving the allocation of 68 units of affordable housing for the Calaveras Quarters Apartments rehab/conversion project.
5. Authorizing the City Manager, or designee, to execute all documents and take all necessary and appropriate actions to carry out the purpose and intent of the resolution.
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Summary
The recommended actions in this proposed Resolution are administrative in nature, updating the number of affordable housing units and/or formally designating the affordable housing units for existing housing projects pursuant to Article XXXIV of the California Constitution (Article 34). Article 34 requires voter approval for publicly funded low-income housing projects. Pursuant to a 2018 voter-approved ballot measure, the City Council has authority to designate up to 500 units per year as publicly funded affordable housing for Article 34 purposes. This designation under Article 34 is critical to all affordable housing projects, as eligibility for state grant funding is tied not only to the designation, but to the actual number of affordable housing units within each project. The following summarizes the specific designations by project.
On November 19, 2024, the City Council awarded grant funds to Satellite Apartments (Attachment A - Resolution 2024-11-19-1505). The Satellite Apartments project consists of the conversion of a property located at 530 N. Stanislaus St, Stockton CA to produce 30 affordable housing units, plus 1 manager’s unit. When approved by the City Council, a recommendation to authorize the allocation of affordable housing units pursuant to Article 34 was not included. This item seeks to allocate 30 affordable housing units approved in 2024 pursuant to Article 34. Since Council approval, the developer, Delta Community Development Corporation (DCDC), has devised a second phase of Satellite Apartments and plans to construct 24 new affordable housing units. Therefore, DCDC is seeking additional Article 34 allocation authority for the 24 new affordable housing units.
On October 1, 2024, the City Council awarded grant funds to Harding Way Apartments (Attachment B - Resolution 2024-10-01-1209). The Harding Way Apartments project consists of the conversion of a property located at 645 W. Harding Way, Stockton CA to produce 24 affordable housing units. At the time of approval, the City Council authorized the allocation of 24 affordable housing units pursuant to Article 34. Since Council approval, the developer, DCDC, has modified the scope of work of the project and plans to add an additional 9 affordable housing units for a total of 33 affordable housing units. DCDC is seeking Article 34 allocation authority for the 9 new affordable housing units.
On May 21, 2024, the City Council awarded grant funds to Calaveras Quarters Apartments (Attachment C - Motion 2024-05-21-1212). The Calaveras Quarters Apartments project consists of the conversion of a property located at 2654 West March Lane in Stockton to produce 68 affordable housing units. When approved by the City Council, a recommendation to authorize the allocation of affordable housing units pursuant to Article 34 of the California Constitution was not included. This item seeks to allocate 68 affordable housing units pursuant to Article 34.
DISCUSSION
Background
Article 34 requires voter approval of publicly assisted affordable housing projects. In 2018, voters of the City of Stockton gave the City Council the authority to approve up to 500 units of affordable housing per year (Attachment D - Resolution 2018-12-18-0401). In 2024, the City Council authorized 147 units across 4 projects, as follows:
• Danny Drive Apartments - 110
• 521 E Main St - 12
• Harding Way Apartments - 24
• STAND Property Acquisition - 1
Present Situation
Calaveras Quarters & Satellite Apartments May 2024
On May 21, 2024, City Council approved the award of Homeless Housing, Assistance and Prevention (HHAP) Round 3 and 4 funding to the Calaveras Quarters Apartments and Satellite Apartments projects. The approved motion stated that Calaveras Quarters would add 68 units of housing, and Satellite Apartments would preserve 31 units of housing (30 affordable units, plus 1 manager’s unit). The item did not include a recommendation to approve affordable housing pursuant to Article 34 of the California Constitution. The omission of reference to Article 34 was an administrative oversight. This item seeks to retroactively approve the allocation of 68 units of affordable housing for the Calaveras Quarters Apartments project and 30 affordable housing units for the Satellite Apartments project, project pursuant to Article 34 of the California Constitution.
Satellite Apartments New Construction
Since the allocation of HHAP funding to Satellite Apartments, the project developer, DCDC, modified the project to add 24 units of housing by adding a new building ("Satellite New Construction") on the parking lot of the Satellite project site. The Satellite New Construction project is designed to provide stable, supportive homes for individuals with serious behavioral health conditions, including those with serious mental illness and substance use disorder, who are experiencing homelessness or are at risk of homelessness. Supported by the Behavioral Health Bridge Housing Program, with support from the County of San Joaquin Behavioral Health Services, the project aims to serve individuals experiencing homelessness who face serious behavioral health challenges that hinder their ability to access assistance and achieve stability. Through this item, DCDC is seeking the approval of the 24 new units for the Satellite Apartments New Construction project, pursuant to Article 34 of the California Constitution. This designation will allow DCDC the ability to apply for state and/or federal financing to assist in the development of the project.
Harding Way Apartments Additional Units
On October 1, 2024, City Council approved the allocation of Pro-Housing Incentive Program (PIP) funding for the Harding Way Apartments project. At the time the project was approved by Council, the proposed project was designed as a 24-unit affordable housing project which Council authorized pursuant to Article 34. The developer, DCDC, has since revised the unit mix and updated the project scope to add 9 new units of affordable housing. In total, Harding Way Apartments will add 33 new units of affordable housing. Through this item, DCDC is seeking the approval for the 9 additional units for the Harding Way Apartments project, pursuant to Article 34 of the California Constitution. This designation will allow DCDC the ability to apply for state and/or federal financing to assist in the development of the project.
FINANCIAL SUMMARY
The proposed resolution will have no financial impact on the General Fund or any other unrestricted fund.
Attachment A - Resolution 2024-11-19-1505
Attachment B - Resolution 2024-10-01-1209
Attachment C - Motion # 2024-05-21-1212
Attachment D - Resolution 2018-12-18-0401