Affordable-Housing Programs to Take $1.5-Million Hit

Money set aside for low-income-housing programs in San Juan Capistrano will shrink 8.3 percent when city officials decide to pay a share of what they've dubbed .

On Thursday, the City Council—acting as the board of directors for the San Juan Capistrano Community Redevelopment Agency—will consider approving a $1.9-million payment to the state, necessary to sustain the agency .

City staffers did not return a request for information about how the withdrawal will impact the affordable-housing programs.

despite new rules that require the city to pay millions of dollars to local school and county agencies. 

The payment will actually come out of the city's contingency fund, a reserve account set aside for emergencies. The city will be reimbursed by the redevelopment agency in the form of a $1.5-million payment from the agency's housing branch and $400,000 from the non-housing arm of the agency.

The redevelopment agency uses its housing funds for one-time emergency rent payments and security deposits, loans for fixing up residences and for assisted-living programs for seniors.

The community redevelopment agency also owns 24 single-family units in the . The units were built in phases in 2000 and 2009. They are rented to tenants with low incomes for a period of three to five years with the goal of having the residents improve their finances and become self-sufficient.

Because the City Council elected to re-establish the agency, 20 percent of tax increment—the agency's main revenue source—will continue to be collected and dedicated to affordable housing. Had it voted to disband it, there would be no ongoing or new revenue sources to fund the programs, city staffers said.

According to a city report, there's currently $18 million in the housing program account. The agency will reimburse the city at the same time the city cuts its check to the state. In subsequent years, officials estimate, the city will make $450,000 payments annually to sustain the agency. Future years' payments would be reimbursed to the city from the agency's tax increment—projected to be about $8 million annually in the years ahead in San Juan Capistrano.

The "tax increment" is the increase in property taxes within a redevelopment project area, which results from the rise in the project area's assessed value that exceeds the base year's value.

Other local government agencies, such as the county and school districts, that typically benefit from rising property values do not see the increased taxes that result in redevelopment project areas.

The money that the city sends to Sacramento will be funneled back to those agencies, saving the state money because it won't have to make as big payments to the schools.

Thursday's special meeting starts at 5 p.m. in City Hall, 32400 Paseo Adelanto.