Title
Recommendation to Authorize the City Manager to Execute and Modify All Documents Deemed Necessary and Appropriate to Submit an Application for the CalHome Program to the California Department of Housing and Community Development;
Adoption of Resolution Authorizing the City Manager to Apply for, Accept, and Appropriate CalHome Program Grant Funds; and
Recommendation to Award a Grant Agreement to Rebuilding Together East Bay Network in an Amount Not-to-Exceed $1,250,000 to Administer CalHome Grant Eligible Activities, and Authorize the City Manager to Move Funds between CalHome and Community Development Block Grant Funds as Necessary to Meet Expenditure Deadlines for Eligible Expenses. (Housing and Human Services 10021830)
Body
To: Honorable Mayor and Members of the City Council
From: Jennifer Ott, City Manager
EXECUTIVE SUMMARY
The CalHome Program provides grants to local public agencies and nonprofit corporations for first-time homebuyer and housing rehabilitation assistance, homebuyer counseling and technical assistance activities to enable low- and very low-income households to become or remain homeowners. Grants to local public agencies and nonprofit developers may include programs to assist individual first-time homebuyers through deferred-payment loans for downpayment assistance, home rehabilitation, including manufactured homes not on permanent foundations, acquisition and rehabilitation, homebuyer counseling, self-help mortgage assistance, or technical assistance for self-help homeownership. All funds to individual homeowners will be in the form of loans.
If the City of Alameda’s (City) application is successful, CalHome funds would be used to create more affordable housing through Accessory Dwelling Unit (ADU) development and increase the budget for the City’s Residential Rehabilitation Program. The CalHome Program does not require the City to provide matching funds to participate in the program, however the City currently allocates Community Development Block Grant (CDBG) funds for residential rehabilitation administration and program delivery costs. Staff is requesting approval to accept the grant funds once awarded by the California Department of Housing and Community Development (HCD) and approval to grant Rebuilding Together East Bay Network funding to continue residential rehabilitation project services and implement ADU assistance projects in the City.
BACKGROUND
The Housing and Human Services (HHS) Division is seeking to apply for CalHome grant funding to create more affordable housing through ADU development and the continuation of services for the Residential Rehabilitation Program by providing additional funds for more projects. The Residential Rehabilitation Program is currently using CDBG entitlement funds for residential rehabilitation program costs and loan repayments to fund new loans. Furthermore, the Residential Rehabilitation Program is aligned with City’s Strategic Plan Priority which consists of maintaining affordable housing stock and promoting housing support services for our most vulnerable communities including low-income seniors and disabled residents. The new stream of funding will be used to build upon existing programs such as the Housing Rehabilitation and Home Safety Repair programs and expand affordable housing production by facilitating the construction of ADUs and Junior ADUs. These programs make it possible for residents to live in their own homes longer and allow more affordable housing options within the community.
DISCUSSION
On December 12, 2024, HCD announced the release of the 2024 Homeownership Super Notice of Funding Availability (HOSN) for approximately $176.8 million in funds for the two programs. As mentioned above, HHS is seeking to apply for CalHome grant funding to create more affordable housing through ADU development and the continuation of services for the Residential Rehabilitation Program. Approximately $143.1 million in grant funds will be available for the following activities within the CalHome Program:
• Homeownership Development Project Loans (including predevelopment costs and carrying costs during construction related to ADUs and Junior ADUs (Junior ADUT))
• Technical Assistance for Self-Help Housing Projects
• First-Time Homebuyer Mortgage Assistance (including the purchase of a home with an ADU or JADU)
• Owner-Occupied Rehabilitation Assistance (including rehabilitation of Manufactured Housing not on a permanent foundation, and construction, repair, or Rehabilitation of ADUs or JADUs)
• Technical Assistance for Shared Housing Programs
• ADU/JADU Assistance (including construction, repair, or rehabilitation of ADUs or JADUs)
To be eligible for grant funding, applicants must be a Local Public Entity, Local Public Agency, Tribal Entity, or Nonprofit Corporation. The City is eligible for this grant program based on geographic, organizational stability (administering a housing program for at least two years), and all other eligibility requirements required for all applicants.
The City’s Residential Rehabilitation Programs offer low-interest loans to eligible homeowners and rental property owners, whose units are occupied by 51% or more low-income renters in Alameda. Income limits are determined by HUD and loans are available on a first-come, first-served basis. Loans can be used to correct substandard and/or health and safety conditions, to extend energy conservation, or to repair or replace major systems in danger of failure. In addition, technical assistance is provided by staff and continued support is given throughout the duration of the project.
Currently, the City is under agreement with Rebuilding Together East Bay Network to deliver a program to improve housing conditions for low-income, elderly, and disabled residents. The first year focuses on administering one housing rehabilitation loan of up to $15,000 and up to four minor home modification grants of $5,000 each. As the program progresses, the second year will include a significant expansion to develop ADUs and JADUs on eligible properties. If the City receives $1.25 million in grant funding, $500,000 will be allocated to residential rehabilitation to support approximately 25 homes and $750,000 for ADU and Junior ADU development. This would accommodate for the construction of approximately seven new dwelling units. Homeowners that receive grant funds to build ADUs and JADUs will have a deed restriction requiring these dwelling units to be rented to low-income, seniors and other vulnerable households. Deed restrictions will be included in each homeowner agreement and are necessary to preserve the long-term affordability of the units. Conversely, ADUs and JADUs could potentially be used as a living space for caregivers of senior or vulnerable households. The programs expansion aims to further address Alameda’s housing challenges by creating affordable housing units while also providing job training opportunities in construction.
ALTERNATIVES
• Authorize the City Manager to execute and modify all documents deemed necessary and appropriate to submit an application for the CalHome Program to HCD; adopt a Resolution to authorize the City Manager to apply for, accept, and appropriate CalHome Program grant funds; award a Grant Agreement to Rebuilding Together East Bay Network in an amount not-to-exceed $1,250,000 to administer CalHome grant eligible activities, and authorize the City Manager to move funds between CalHome and CDBG as necessary to meet expenditure deadlines for eligible expenses.
• City Council may choose not to authorize the City Manager to apply for the CalHome Program. City Council may still direct staff to apply for CalHome funds at another time, but the City would miss the opportunity to apply for the current funding cycle, which is due March 13, 2025.
FINANCIAL IMPACT
This CalHome grant application is in the amount of $1.25 million and awards will be announced in July 2025. These funds will be used to expand on existing programs and support the increase of affordable housing production. Eligible applicants will either be homeowners willing to lease to low-income renters or seniors and vulnerable households providing living space for caregivers. Funds will also be made available for residential rehabilitation of existing housing stock. There is no impact to the City’s General Fund.
MUNICIPAL CODE/POLICY DOCUMENT CROSS REFERENCE
This action is consistent with the Alameda 2040 General Plan Housing Element Goal 1 “Provide an ample supply of housing to meet the existing and projected housing needs,” and specifically actions to apply for funding sources that facilitate the construction of housing for lower income households in Alameda.
This action is also consistent with the City Strategic Plan projects #HH3 - Further the preservation, rehabilitation, or construction of affordable housing in Alameda.
This action is subject to the Levine Act.
ENVIRONMENTAL REVIEW
This action is not a project subject to environmental review under the California Environmental Quality Act (CEQA). The application, acceptance, and appropriation of grant funds that are not tied to a specific project will not have any impact on the environment. The construction and/or rehabilitation of any housing, including any ADU or JADU, arising out of a future award of said grant funds, will be individually reviewed in compliance with CEQA upon the application for a planning approval or building permit for such a project.
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 and modify all documents deemed necessary and appropriate to submit an application for the CalHome Program to HCD; adopt a Resolution to authorize the City Manager to apply for, accept, and appropriate CalHome Program Grant Funds; award a grant agreement to Rebuilding Together East Bay Network in an amount not-to-exceed $1,250,000 to administer CalHome grant eligible activities, and authorize the City Manager to move funds between CalHome and CDBG as necessary to meet expenditure deadlines for eligible expenses.
Respectfully submitted,
Amy Wooldridge, Assistant City Manager
By,
C’Mone Falls, Housing and Human Services Manager
Andre Fairley, Management Analyst
Financial Impact section reviewed,
Margaret O’Brien, Finance Director