Warning! Your deadline may be just around the corner. Successor agencies have five years to develop land transferred from the former RDA. For many, this deadline is quickly approaching. Not only is it time to file for the five-year extension allowable by law, but it is also time to create a development and disposition plan for the remaining assets.
For example, the City of Pinole recently hired RSG to outline for them various funding options for their remaining former RDA housing assets. The City has over $1.0 million[DC1] , in addition to other real estate assets designated for affordable housing. Like most cities in California, Pinole is in need of additional affordable housing units, as well as upgrades to the existing affordable housing stock.
RSG presented seven options to Pinole that fit the community’s character and need. With the significant disparity between affordable and market rate rents, purchasing affordable housing covenants for 55 years would cost about $400,000 per unit! Thus, the $1.0 million could result in as little as three affordable units, making this option the least cost efficient of the seven options. The most cost effective option would be creating an affordable rehab program for seniors, as this would net the most affordable units[DC2] . This strategy would also address the need to upgrade the existing housing stock and help the City’s aging population. However, the option that leverages the City’s housing assets to the fullest extent is to combine the housing funds with an existing housing property. RSG is working with the City to explore this option further and potentially help them select a developer to build affordable housing units.
Written by Greg Smith, an Associate at RSG, Inc.