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 Program (PLHA) and Affirming the City Council’s Adoption of a Five-Year Permanent Local Housing Allocation Plan; and
Recommendation to Authorize the City Manager to Negotiate and Execute Related Documents, Agreements, and Modifications. (Community Development)
Body
To: Honorable Mayor and Members of the City Council
EXECUTIVE SUMMARY
State Senate Bill 2 (the Building Homes and Jobs Act) created the Permanent Local Housing Allocation (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.
The City of Alameda (City) is estimated to receive $558,765 in October 2020, and approximately $3.3 million over the next five years. Staff proposes to fund rent relief and housing navigation services for unsheltered individuals through the City’s new day center and trailer programs during the first year of the program. Funds received during years 2-5 are proposed to be spent on developing affordable housing for homeless and other very low- and low-income residents through support of the Wellness Center, RESHAP and North Housing projects, and participating in the County’s rent subsidy program.
In order for the City to be eligible for funds under this Program, it must conduct a public hearing to receive comments on the proposed PLHA Plan. Following the public hearing, it is recommended that the City Council approve the five-year PLHA Plan, authorize submitting an application for the funds to carry out the Plan, and authorize the City Manager to negotiate and execute necessary documents related to the application.
BACKGROUND
In September 2017, the California Legislature approved Senate Bill 2 (SB 2), known as the Building Homes and Jobs Act (Act), which established a $75 recording fee on real estate documents to increase the supply of affordable housing. The Act establishes the PLHA program administered by the California 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. HCD released its first Notice of Funding Availability (NOFA) for these funds on February 26, 2020.
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. The City is an entitlement jurisdiction and is eligible to receive an estimated $3,352,590 over the five-year funding period. 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. According to HCD, the City will receive first-year funds of $558,765 in October 2020 (FY 2020-21).
The State requires entitlement jurisdictions to use PLHA funds to increase the supply of affordable housing. In order to receive PLHA funds, the City is required to submit a PLHA Five-Year Plan (Plan) detailing the manner in which allocated funds will be used; a description of the way the City will prioritize investments that increase the supply of housing for households at or below 60 percent of the Area Median Income (AMI); a description of how the Plan is consistent with the programs set forth in the City’s Housing Element; and evidence that the Plan was authorized and adopted by resolution by the City Council and that the public had an adequate opportunity to review and comment on its content. The grant application is attached as Exhibit 1.
DISCUSSION
Proposed Use of Funds
As outlined in more detail in the attached application, staff is recommending the following projects for the use of the PLHA funds:
|
Year 1 Projects |
Years 2-5 Projects |
|
• Housing Navigation Services |
• North Housing - 90 units of service-enriched housing for formerly homeless individuals and families |
|
• COVID-19 Emergency Rent Relief |
• McKay Senior Housing - 90 units of supportive housing for homeless seniors and medically frail individuals |
|
|
• RESHAP - 267 units of replacement housing for formerly homeless individuals and families living at Alameda Point |
|
|
• Alameda County Rental Subsidy Program |
For the first year, staff proposes that the funds be divided between Housing Navigation Services to provide case management support for homeless individuals and families and COVID-19 Emergency Rent Relief. Housing navigation services will be provided to residents of the FEMA trailers and to unsheltered individuals accessing the new day center. These services will focus on securing transitional or permanent housing for these individuals and families. In addition to housing navigation, funds will be used to provide security deposits and/or first and last month’s rent as needed. The PLHA funds would augment the existing CDBG and Alameda Strong funds that are available for rent relief.
Staff has proposed four possible uses of funds that are received in years two-five. Staff anticipates that about 75% of the funds would be made available to provide gap financing for the creation of affordable housing that will serve households below 60% of AMI. By including the three affordable housing projects listed above, the City ensures that it will be able to direct funds to the project(s) that will most benefit from the assistance in any given year of the Plan period. Staff proposes to allocate the remaining 25% to the Alameda County Affordable and Supportive Housing Rental Subsidy Program. Alameda County proposes to establish a rental assistance program for affordable and supportive housing units in projects that will provide permanent housing for people experiencing homelessness. Each city that participates in the County’s Program would retain the authority to select the qualified projects that will receive rental assistance commitments that are funded from their city’s allocation.
Consistency with City of Alameda Housing Element
PLHA Plan’s must be consistent with the programs set forth in the City’s Housing Element. The Plan is consistent with Goals #1 and #2 from the City of Alameda Housing Element 2015-2023:
Goal #1: Provide housing services and opportunities to support, maintain, and enhance Alameda’s diverse community and excellent quality of life and provide for the housing needs of Alameda's future residents and regional housing needs.
Goal #2: Provide housing that meets the City’s diverse housing needs, specifically including affordable housing, special needs housing, and senior housing.
ALTERNATIVES
• Staff recommends that City Council hear public comment; approve submission of the Permanent Local Housing Fund Application and affirm its approval of the PLHA Plan; and authorize the City Manager to negotiate and execute related documents, agreements, and modifications to implement the programs described above.
• While the PLHA application requires adopting a resolution, the City Council may modify the recommended Plan prior to adopting the resolution. Such modifications could include revising the list of possible projects.
• City Council could direct staff to consider other programs for funding as long as those programs are consistent with HCD guidelines (e.g., assistance is limited to low-income residents, funding is for a PLHA-eligible activity, etc.).
• City Council could choose not to submit an application.
FINANCIAL IMPACT
There is no impact on the General Fund. The PLHA funding, in the amount of $558,765, is additional revenue that will be budgeted after it has been awarded. It is anticipated that funds will be appropriated as part of the FY 2020-21 update in October 2020.
MUNICIPAL CODE/POLICY DOCUMENT CROSS REFERENCE
The proposed five-year PLHA Plan has been prepared consistent with State HCD’s requirements and the City’s Housing Element.
ENVIRONMENTAL REVIEW
Adoption of the resolution is not subject to review under the California Environmental Quality Act (CEQA) because it concerns a government funding mechanism or other governmental fiscal activity which does not involve any commitment to any specific project which may result in a potentially significant physical impact on the environment and therefore is not a project under CEQA. CEQA Guidelines, section 15378 (b) (4).
CLIMATE IMPACTS
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
It is recommended that the City Council:
1. Adopt a Resolution Authorizing the Submission of an Application for Funding under the Permanent Local Housing Program and Affirming the City Council’s Adoption of a Five-Year Permanent Local Housing Allocation Plan; and
2. Authorize the City Manager to negotiate and execute related documents, agreements, and modifications.
CITY MANAGER RECOMMENDATION
The City Manager concurs with the Community Development Director’s recommendation.
Respectfully submitted,
Debbie Potter, Community Development Director
Michael H. Roush, Chief Assistant City Attorney
By:
Lisa Fitts, Housing Authority Management Analyst
Financial Impact section reviewed,
Nancy Bronstein, Human Resources Director and Interim Finance Director
Exhibit:
1. Permanent Local Housing Fund Application
cc: Eric Levitt, City Manager