Title
Recommendation to Authorize the City Manager to Execute a Two-Year Agreement, Substantially in the Form of the Attached Agreement, with the Option of Three One-Year Extensions for a Total Five-Year Compensation Amount Not to Exceed $420,000 and No More than $90,000 in a Single Fiscal Year with HouseKeys to Provide Inclusionary Housing Program Management and Compliance Services to the City of Alameda. (Community Development 228)
Body
To: Honorable Mayor and Members of the City Council
EXECUTIVE SUMMARY
Staff conducted a procurement process to select a consultant to provide program management and compliance services for the City of Alameda’s (City) Inclusionary Housing Program. Staff evaluated the proposer’s past experience, the quality and experience of the project manager, the team’s knowledge and understanding of inclusionary housing requirements, and the ability to deliver the proposed scope of work within the proposed budget and schedule. In lieu funds will be used to pay the consultant.
BACKGROUND
Ordinance 30-16, Inclusionary Housing Requirements for Residential Projects, is a mechanism for the development of affordable homeownership and rental housing in Alameda. Implementation of this ordinance is referred to as the Inclusionary Housing Program. When market-rate housing of five or more units is proposed, the City requires the development of homes or rental units that are affordable to very low, low and moderate-income households. For residential developments of nine (9) or fewer units, the requirements of this section may be satisfied by paying an in-lieu fee. The City administers various programs, including the Below Market Rate (BMR) Housing Ownership Program, the Down Payment Assistance (DPA) Program and other programs related to the sale or lease of Inclusionary Housing. The City has approximately 134 households that have purchased a BMR, have obtained a DPA loan or have done both.
In July 2020, the City reorganized the Community Development Department (CDD) and signed a first amendment to the Services Agreement (First Amendment) with the Housing Authority of the City of Alameda (Housing Authority), causing CDD to retain administration of certain programs and services, including administration of the Inclusionary Housing Program. Previously, as the Program Administrator, the Housing Authority had entered into a Consultant Services Agreement (Hello Housing Agreement) with Hello Housing, dated January 23, 2019 and that agreement was assumed by the City, effective August 1, 2020. The Hello Housing Agreement expired March 31, 2021.
On January 29, 2021, Hello Housing informed the City that due to current economic and pandemic conditions, Hello Housing would be restructuring its operations and eliminating services that it previously provided. Further, the letter stated that Hello Housing would be unable to renew or extend its contract ending March 31, 2021 and that it would not respond to the upcoming Request for Proposal.
On February 16, 2021, staff posted a Request for Proposals (RFP) for consulting services for the Inclusionary Housing Program. The procurement process is discussed more fully below.
DISCUSSION
Request for Proposals and Selection Process
The City issued an RFP on February 16, 2021 to solicit proposals from qualified teams consisting of professionals who specialized in program management, administration and compliance of Inclusionary Housing Programs. In addition to posting on the City website, staff emailed the announcement to four known administrators as well as six local housing counseling agencies. In San Francisco, some housing counseling agencies have been providing limited BMR program administration services.
While multiple parties confirmed receipt of the RFP, on March 8, 2021, the City received one proposal, and it was from HouseKeys. City staff interviewed the applicant and called references. Staff evaluated the quality and experience of the consultant team, the team’s knowledge and understanding of inclusionary housing programs, and the ability to deliver the proposed scope of work within the proposed budget and schedule. As an alternative, staff weighed the cost and benefit of hiring two part-time staff as either a temporary or longer term solution.
Staff recommends proceeding with HouseKeys to provide Inclusionary Housing Program management and compliance services. HouseKeys presented a highly qualified team that provided a clearly defined and comprehensive proposal. In addition to the more than 40 years of collective experience, HouseKeys has developed proprietary software that standardizes workflows and facilitates transparency and communication with the public.
The HouseKeys team has recent experience administering inclusionary housing programs for various cities in California, including several in the Bay Area:
• City of Burlingame
• City of Campbell
• City of Gilroy
• City of Hayward
• City of Menlo Park
• City of Morgan Hill
• City of San Ramon
• City of Santa Clara
• City of West Hollywood
Scope of Work
HouseKeys will perform the tasks summarized below and detailed in the proposed Service Provider Agreement (Agreement), attached as Exhibit 1:
1. Services Overview. HouseKeys will manage and implement program policies; conduct income qualifications; underwrite program applications; prepare program documents; calculate payoff demands and resale values; and work with City staff to ensure a seamless and coordinated program delivery.
2. Documentation. HouseKeys will administer the program and assure Affordable Housing Agreements are recorded and followed by all parties as applicable for each property.
3. Support and Education. HouseKeys will provide offsite support for service requests. Orientations and workshops will be held for residents of the city. In Response to COVID-19 restrictions, content is streamed online via webinars and pre-recorded content available on HouseKeys-hosted program websites.
4. Guidelines and Materials. HouseKeys will regularly update program guidelines and program materials in conjunction with City staff to reflect HouseKeys’s administrative process for Program Administration including, but not limited to: applications, program pamphlets, rent & resale calculations, selection processes, vacancies, sale and resale of units, refinancing requests, collection of City fees and other applicable fees, and default monitoring/resolution process. HouseKeys’s objective will be to work alongside City staff to incorporate “learnings” from the team’s collective history with inclusionary housing programs in California.
5. Website Presence. HouseKeys will maintain an affordability program website presence that will link to the City’s housing website.
6. Performance Measures. HouseKeys and the City will agree to mutually acceptable performance measures for program administration. These measures shall be included in the quarterly program summary report. Minimum service level expectations include responding to general inquiries and loan requests within 48 hours.
7. Recordkeeping. HouseKeys shall maintain the City’s existing records and files through a database-driven information retention and management system for the programs. All electronic records will be considered work products that are property of the City and will be available via data export. HouseKeys shall update the City’s records quarterly to ensure a coordinated, seamless recordkeeping process.
8. Reporting. HouseKeys shall provide a quarterly program summary report to the City. An abbreviated monthly report will accommodate each monthly invoice. The minimum contents for these reports are described in detail in the Agreement.
9. Transaction Coordination. HouseKeys shall act as transaction coordinator for all inclusionary housing real estate transactions and will provide the City with a Fee Schedule.
10. Monitoring, Compliance, and Loss Mitigation. HouseKeys shall work alongside staff to conduct annual monitoring to evaluate program participants’ compliance with the terms and conditions of the recorded deed restrictions and program guidelines.
11. Marketing. HouseKeys’ will employ traditional marketing as well online and social media marketing methods to advertise the program. The HouseKeys Team will advertise generally and will also target the city’s local residents and community members. This includes targeting the least likely to apply and working in compliance with federal laws addressing Housing and Urban Development fair housing requirements. All materials will include proper fair housing logo and other federal and state-mandated disclosures
12. Additional Services. HouseKeys will perform additional services which enable City staff to streamline work and facilitate timely closings of purchases and leasing of rentals that may be offered through the Inclusionary Housing Program.
Next Steps
Staff is recommending approval of a two-year agreement that may be extended for three additional one-year terms for a maximum term of five years, with a total five-year compensation amount not to exceed $420,000. The first year cost shall not exceed $90,000: $15,000 for onboarding files and initial set up plus an annual fee of $75,000. This is based on fewer than 150 ownership units in the program. In the event that the Agreement is renewed, the annual fee may increase as additional units are added to the City’s Inclusionary Housing Program portfolio. The Agreement contains pricing of $500 for each additional ownership unit above 150.
HouseKeys is currently in the process of securing cyber liability insurance that complies with City requirements. If the Agreement is approved, the City will finalize the Agreement and engage HouseKeys to begin work no later than July 7, 2021. In addition to the annual monitoring, which is scheduled to begin in September, there are three developments under construction with inclusionary housing units - Alameda Landing, Alameda Marina and the Warehouse at Sherman & Buena Vista. Staff anticipates that at least one of these developments will be in a position to start marketing units this summer.
ALTERNATIVES
• Authorize the City Manager to execute a two-year agreement, substantially in the form of the attached agreement, with the option of three one-year extensions for a five-year compensation not to exceed $420,000 and no more than $90,000 in a single fiscal year with HouseKeys to provide Inclusionary Housing Program compliance and program management services to the City. Staff recommends this alternative.
• Direct City staff to perform this work. Staff does not recommend this alternative as presently CDD does not have the staff capacity to administer and manage the Inclusionary Housing Program while maintaining the service levels for this and other programs. In addition, recruiting and training staff may divert resources from existing work.
• Do not authorize the execution of the agreement. Staff does not recommend this alternative since staff capacity is limited and program demands over the next two years are expected to increase as developments that are currently under construction near completion.
FINANCIAL IMPACT
Funding for the proposed two-year agreement with HouseKeys is included in the Housing In-Lieu (Fund 228) budget for Fiscal Years 2021-23. Funding for the optional extensions of the agreement would be subject to future City Council appropriations approval.
MUNICIPAL CODE/POLICY DOCUMENT CROSS REFERENCE
This action is consistent with Alameda Municipal Code Chapter 30-16 - Inclusionary Housing Requirements for Residential Projects.
ENVIRONMENTAL REVIEW
Approving an agreement with HouseKeys to provide program management, administration and compliance services is not a project pursuant to California Environmental Quality Act (CEQA) because it is an organizational or administrative activity of the City that will not result in direct or indirect physical changes in the environment (CEQA Guidelines, section 15378 (b) (5)) and therefore no environmental review is required.
CLIMATE IMPACT
There are no identifiable climate impacts or climate action opportunities associated with the subject of this report.
RECOMMENDATION
Authorize the City Manager to execute a two-year agreement, substantially in the form of the attached agreement, with the option of three one-year extensions for a five-year compensation not to exceed $420,000 and no more than $90,000 in a single fiscal year with HouseKeys to provide Inclusionary Housing program management and compliance services to the City.
CITY MANAGER RECOMMENDATION
The City Manager recommends approval of the multi-year agreement with HouseKeys.
Respectfully submitted,
Lisa Nelson Maxwell, Interim Community Development Director
By,
Lisa Fitts, Community Development Program Manager
Financial Impact section reviewed,
Annie To, Finance Director
Exhibit:
1. Agreement
cc: Eric Levitt, City Manager