Title
Adoption of Resolution Authorizing the Submission of an Application for Senate Bill 2 Funding from the State Department of Housing and Community Development Under the Permanent Local Housing Allocation (PLHA) Program, Accepting PLHA Funding, and Allocating PLHA Funding;
Adoption of Resolution Amending the PLHA Five-Year Plan Grant Budget (G24010) to Increase 2022 Allocation Revenues and Expenditures in the Amount of $479,024; and
Recommendation to Authorize the City Manager to Negotiate and Execute Related Documents, Agreements, and Modifications. (City Manager 10021833)
Body
To: Honorable Mayor and Members of the City Council
From: Jennifer Ott, City Manager
EXECUTIVE SUMMARY
State Senate Bill 2 (SB2), the Building Homes and Jobs Act (Act), created the PLHA program, which provides formula grants to entitlement jurisdictions based upon the formula prescribed under federal law for the Community Development Block Grant (CDBG) program. The primary goal of the PLHA program is to create a permanent source of funding to address unmet housing needs.
In July 2020, the City of Alameda (City) submitted a PLHA application (2020 PLHA Application) and was awarded approximately $3.3 million over the next five years. To date, the City has received approximately $2,383,008 of PLHA funds collected during calendar years (CY) 2019, 2020 and 2021.
The City is conducting a public hearing to receive comments on the proposed PLHA application for funds from CY 2022. Following the public hearing, it is recommended that City Council authorize staff to submit the PLHA application, accept and appropriate $479,024 of PLHA funding, and authorize the City Manager to negotiate and execute necessary documents related to the application.
BACKGROUND
In September 2017, the California Legislature approved the Act, which established a $75 recording fee on real estate documents to provide a funding source that helps increase the supply of affordable housing. The Act establishes the PLHA program administered by the California State Department of Housing and Community Development (HCD). The PLHA program provides a permanent source of funding to cities and counties to help meet the unmet need for affordable housing and increase the supply of affordable housing units. Under the PLHA program, funding is provided through grants to entitlement jurisdictions based on the formula prescribed under federal law for the CDBG program over a five-year funding period.
In July 2020, City Council authorized staff to submit its five-year PLHA plan and application for funding. The City was awarded $558,765 per year with an estimated five-year allocation not-to-exceed $3,352,590. It is important to note that the annual PLHA amounts are estimates based on projected generated revenue from the $75 recording fee and are subject to change as actual real estate transactions fluctuate from year to year. As such, the City received $558,765 from CY 2019, $868,493 from CY 2020 and $955,750 from CY 2021 funds.
On December 29, 2023, HCD issued a PLHA Notice of Funding Availability (NOFA) with $479,024 from CY 2022.
On January 18, 2024, staff posted a NOFA and a Request for Proposals (RFP) for projects that could be funded with CDBG, HOME, and/or PLHA funds. In May 2024, City Council authorized staff to issue conditional funding commitments to 1) Island City Development for Estuary II, 2) Mercy Housing California for McKay Senior Housing, and 3) MidPen Housing for Stardust Gardens (also known as RESHAP Phase 1) and for Harbor Village (also known as RESHAP Phase 2).
DISCUSSION
In the PLHA five-year plan, staff proposed categories of uses by calendar year. Based on the approved plan, funds may be used as follows:
• 75% of the funds may be used for “predevelopment, development, acquisition, rehabilitation and preservation of multifamily, residential live-work, rental housing that is affordable to extremely low, very low, low- or moderate-income households including necessary operating subsidies.” Staff has identified four projects that may be awarded these funds: Estuary II, McKay Senior Housing, Stardust Gardens (formerly known as RESPHAP Phase 1) and Harbor Village (formerly known as RESPHAP Phase 2).
• 25% of the funds may be used for “assisting persons who are experiencing or at-risk of homelessness, including, but not limited to, providing rapid re-housing, rental assistance, supportive/case management services that allow people to obtain and retain housing, operating and capital costs for navigation centers and emergency shelters, and the new construction, rehabilitation, and preservation of permanent and transitional housing.” In the past, these funds have been used to support Midway Shelter operations, Dignity Village operations, and case management contracts.
The current PLHA application for CY 2022 funds is consistent with implementing the PLHA five-year plan. The funds would be used on projects previously approved by City Council.
ALTERNATIVES
• Approve submission of the PLHA Application, and accept and appropriate PLHA funding; and authorize the City Manager to negotiate and execute related documents, agreements, and modifications to implement the programs described above.
• Direct staff not to submit an application and forego receiving additional PLHA funds.
FINANCIAL IMPACT
There is no impact on the General Fund. The PLHA funding, in the amount of $479,024, is additional revenue that will be budgeted after it has been awarded.
MUNICIPAL CODE/POLICY DOCUMENT CROSS REFERENCE
This action supports the City’s Strategic Plan priority to House All Alamedans and End Homelessness, specifically Project HH1 to address housing and human services functions and develop recommendations and Project HH2 to implement the Homelessness Strategic Plan. This action is also consistent with Goal 2 of “The Road Home: A Five -Year Strategic Plan to Prevent and Respond to Homelessness in Alameda.”
ENVIRONMENTAL REVIEW
This action does not constitute a “project” as defined in California Environmental Quality Act (CEQA) Guidelines Section 15378 and therefore no further CEQA analysis is required.
CLIMATE IMPACT
The Social Vulnerability Assessment section of the Climate Action and Resiliency Plan states:
“adaptation strategies should consider how [the homeless] will receive emergency communications and how they will be sheltered. Proper, safe housing for all is an adaptation and resilience strategy. Planning strategies should always consider these vulnerable populations in adaptation efforts.”
The PLHA funding will help some of the most vulnerable in our community with the consequences of climate change by providing services and shelter from inclement weather, extreme heatwaves, or hazardous air quality.
RECOMMENDATION
Adopt a resolution authorizing the submission of an Application for Funding under the PLHA;
Adopt a resolution amending the PLHA Five-Year Plan Grant Budget to increase 2022 allocation revenues and expenditures in the amount of $479,024; and
Authorize the City Manager to negotiate and execute related documents, agreements, and modifications.
Respectfully submitted,
Amy Wooldridge, Assistant City Manager
By,
Marcie Johnson, Interim Housing & Human Services Manager
Yasamin Obaidy, Administrative Specialist
Financial Impact section reviewed,
Margaret O’Brien, Finance Director
Exhibit:
1. Permanent Local Housing Allocation Application