Palmdale to Set Aside Funds for Low-Income Residences : Redevelopment: The city decides it no longer has enough inexpensive housing to meet state requirements.

After years of securing exemptions from a state requirement that 20% of redevelopment tax gains be spent for lower-cost housing, the city of Palmdale has decided that its normal supply of cheaper housing is no longer cheap enough for everyone.

The city will set out to meet the state requirement this year by setting aside $1.6 million and hiring a housing coordinator.

The turnabout came when city officials decided that despite the comparatively low cost of housing in Palmdale by Los Angeles County standards, they could no longer certify that it was cheap enough for the poorest residents to afford, the basis on which the city has been exempted from the state mandate since the late 1970s.

The conclusion by city redevelopment agency authorities was presented last Thursday to the City Council, which concurred.

“We felt we probably could not make the finding this year. There could have been an argument made we were not supplying housing for the very low-income,” said Danny Roberts, the redevelopment project manager of the Antelope Valley city.

As a result of the shift in policy, the city will set aside about 20% of its tax increment revenues from redevelopment zones each year for housing for those with low to moderate incomes. The money can be used for renter or buyer subsidies, rehabilitation, developer assistance and other purposes.

Roberts said the city still must decide what types of programs will offer the greatest help. To that end, the city plans to spend the first part of the money it sets aside to hire a housing coordinator and a consulting firm to study the city’s low-income housing needs.

The initial $1.6 million represents the city’s 20% share for a two-year period, about $803,000 for the 1990-91 fiscal year and about $860,000 for the 1991-92 fiscal year. The city also will set aside similar amounts in future years, depending on revenues from redevelopment projects.

The tax increment is the increase in property tax revenue that comes from areas where property values have risen because of redevelopment. In the past, Palmdale has spent its increment for other purposes, such as the city’s new shopping and auto malls and street and drainage work.

State law requires redevelopment projects to set aside the 20%. But since the late 1970s, Palmdale each year acquired an exemption by declaring that the city already had sufficient low-cost housing.

Palmdale plans to divert the money from at least four of its five redevelopment areas, about 7,700 acres out of nearly 8,400 acres of redevelopment projects. The income from the fifth area may be needed in its entirety to meet previous debts and obligations. The funds generally are spent within the redevelopment areas, but also can be spent citywide.

Housing provided under the program would be for families with very low, low and moderate incomes. For a family of four, income could not exceed $21,750 a year in the lowest category, and $34,800 and $52,200 a year in the higher two. The rent or purchase price of the housing would depend on the family’s income and the size of the housing.

Roberts said Palmdale’s private sector has no problem providing affordable housing for moderate-income families, citing a median price of about $150,000 for new, unsubsidized homes and about $128,000 for previously occupied houses.

That compares to about $211,000 in the Los Angeles region as a whole.

The market might not provide, however, for very low-income families, Roberts said.

Under state guidelines, for example, a very low-income family of four in Palmdale should not have to spend more than $472 a month for rent and utilities for a two-bedroom apartment, he said. Roberts said he doubted the city has enough apartments for all such residents.