Oxnard City Council approves $800K loan for affordable housing settlement with UHC

The Oxnard City Council convened on April 15, 2025, to discuss a significant loan agreement aimed at addressing ongoing issues related to affordable housing in the city. Interim Housing Director Brenda Lopez presented the agenda item, which focused on a proposed loan agreement between the City of Oxnard and the Oxnard Housing Authority.

Lopez provided a detailed background on the situation, noting that in February 2008, the Housing Authority received authorization from the U.S. Department of Housing and Urban Development (HUD) to demolish 260 public housing units at the Colonial Village site. A development agreement with UHC was established in September 2012, which was later amended in June 2015. While the first phase of the project, known as Las Cortes, was completed with 144 affordable housing units, the second phase, consisting of 29 additional units, was never constructed due to delays and subsequent issues, including trespassing and criminal activity in the area.

In June 2020, the Housing Authority and UHC entered into an agreement for demolition costs, which totaled over $2.3 million. As of March 31, 2025, the total amount owed to the Housing Authority, including principal and interest, reached approximately $2.7 million. Following the expiration of the tentative tract map in November 2023, the Housing Authority issued a notice of default to UHC in February 2024, which led to a termination notice in April 2024. UHC contested this termination, claiming compliance with the agreement.

To avoid arbitration or litigation, the Housing Authority and UHC engaged in settlement negotiations, ultimately reaching an agreement for $2 million. Lopez emphasized the urgency of resolving this matter, citing the severe shortage of affordable housing in Oxnard and the need for the Housing Authority to regain control of the property to develop new units.

To facilitate the settlement, the staff proposed a loan agreement of $800,000 from the city’s general fund to the Housing Authority. This loan would function similarly to a grant, being forgivable if the Housing Authority meets specific performance requirements, including the development of affordable housing for households earning at or below 80% of the area median income. The loan would carry a 10% default interest rate if the Housing Authority fails to perform.

The City Council was presented with two recommendations: to adopt a resolution authorizing the city manager to execute the loan agreement and to approve a budget appropriation of $800,000 from the general fund. Additionally, the Housing Authority was advised to adopt a resolution to enter into the loan agreement and to approve an appropriation of $1.2 million from its central fund, along with the write-off of bad debt related to previous demolition costs.

This meeting underscored the city’s commitment to addressing the pressing need for affordable housing and the complexities involved in managing public housing projects. The proposed loan agreement represents a critical step toward resolving the ongoing challenges faced by the Oxnard Housing Authority and advancing the development of much-needed housing units in the community.