Title
Adoption of Resolution Authorizing the City Manager to Submit a Prohousing Designation Program Application to the California Department of Housing and Community Development for the City of Alameda to Become Eligible for State Prohousing Incentive Program Funds and Authorizing the City Manager to Execute All Documents Deemed Necessary or Appropriate.
This action is not a project subject to environmental review under the California Environmental Quality Act. (Planning, Building and Transportation 20962710 and Housing and Human Services 20361840)
Body
To: Honorable Mayor and Members of the City Council
From: Jennifer Ott, City Manager
EXECUTIVE SUMMARY
The State of California Prohousing Designation Program (PDP), established in 2019, creates financial incentives for jurisdictions that are compliant with state housing laws, Housing Element requirements, and have enacted local policies that facilitate housing production. The PDP is overseen by the California State Department of Housing and Community Development (HCD). This January HCD announced Round 2 of Prohousing Incentive Program (PIP) Funds for local governments as “over the counter” grants to automatically receive a share of available funding. HCD is encouraging cities with compliant Housing Elements, such as the City of Alameda (City), to apply. The Round 2 PIP funds are anticipated to benefit the Alameda Housing Authority (Housing Authority) in subsidizing their affordable housing projects currently in development. Staff recommends City Council authorize the City Manager to apply for the PDP and execute pertinent documents.
BACKGROUND
In 2019, the California State Legislature enacted Assembly Bill 101 and established the Prohousing Designation Program to address the statewide housing crisis. Prohousing-designated jurisdictions may receive preference or additional points for state funding. On January 23, 2024, HCD issued a Notice of Funding Available (NOFA) for Round 2 of PIP Funds available to local governments as “over the counter” grants. This means cities that meet the minimum eligibility requirement will automatically receive a share of the available grant funds. Cities may apply for PDP at any time, but those who wish to seek Round 2 PIP funds must apply for both by the March 15, 2024 deadline. The amount of funds distributed to PDP cities will be determined by their PDP score. The PIP funds are anticipated to benefit the Housing Authority in subsidizing their affordable housing development projects. Staff recommends City Council authorize the City Manager apply for the PDP and execute pertinent documents.
DISCUSSION
Staff believes the main purpose of applying for the PDP is to position the City and the Housing Authority to remain eligible, if not competitive, for various affordable housing and infrastructure funding streams (e.g., Infill Infrastructure Grant, Affordable Housing and Sustainable Communities and being eligible for grant programs that are exclusive to PDP jurisdictions such as PIP funds). In recent years, the state funding criteria has increasingly shifted to requiring local government to demonstrate they have adopted housing-friendly zoning and policies as a prerequisite. Neighboring cities such as Oakland and Emeryville have applied and qualified for the PDP.
Eligible applicants must use award funds towards planning or implementation activities related to housing and community development limited to activities that conform with eligible uses pursuant to Health and Safety Code section 50470(b)(2)(D):
• The predevelopment, development, acquisition, rehabilitation, and preservation of multifamily, residential live-work, or rental housing that is affordable to extremely low-, very low-, low-, and moderate-income households, including necessary operating subsidies.
• Affordable rental and ownership housing that meets the needs of a growing workforce earning up to 120 percent of area median income, or 150 percent of area median income in high-cost areas.
• Matching portions of funds placed into local or regional housing trust funds.
• Matching portions of funds available through the Low- and Moderate-Income Housing Asset Fund pursuant to subdivision (d) of Section 34176 of the Health and Safety Code.
• Capitalized reserves for services connected to the creation of new permanent supportive housing, including, but not limited to, developments funded through the Veterans Housing and Homelessness Prevention Bond Act of 2014.
• Assisting persons who are experiencing or at risk of homelessness, including providing rapid rehousing, rental assistance, navigation centers, emergency shelters, and the new construction, rehabilitation, and preservation of permanent and transitional housing.
• Accessibility modifications.
• Efforts to acquire and rehabilitate foreclosed or vacant homes.
• Homeownership opportunities, including, but not limited to, down payment assistance.
• Fiscal incentives or matching funds to local agencies that approve new housing for extremely low, very low, low-, and moderate-income households.
To be eligible for the PDP, the City is required to meet the following requirements:
ü Have a certified Housing Element;
ü Have submitted all required Housing Element Annual Progress Reports;
ü Be compliant with all applicable State housing laws;
ü Have an adopted resolution authorizing the application to the Prohousing Designation Program; and
ü Score a minimum of 30 points across the following four PDP categories:
1. Favorable Zoning and Land Use
2. Acceleration of Housing Production Timeframes
3. Reduction of Construction and Development Costs
4. Providing Financial Subsidies
With the adoption of the resolution by City Council, the City will have met all the eligibility requirements for the PDP. Staff reviewed the PDP scoring criteria and believes the City has at least 49 base points and up to 33 enhancement points, to qualify for PDP designation and be eligible for PIP funds. This means the City is eligible for Prohousing designation and PIP funds without taking further action to modify zoning or adopt new programs and policies.
ALTERNATIVES
As an alternative to the staff recommendation, City Council may choose not to authorize the City Manager to apply for the PDP program. City Council may still direct staff to apply for PDP designation at any time, but the City and Housing Authority would miss the opportunity to apply for the current Round 2 PIP funding opportunity, which is due March 15, 2024.
FINANCIAL IMPACT
Two potential award amounts are determined by adding an Eligible Applicant’s base award amount with an Eligible Applicant’s bonus award amount. The City is potentially eligible for a base award of $500,000 based on population size in addition to a bonus award based on PDP score. The bonus award is calculated as the Prohousing Designation Score multiplied by 10,000. For example, with a score of 31 points, the bonus award would be $310,000. If awarded, appropriation of the funds would be subject to future City Council approval. Matching funds are not required.
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 Strategic Plan priorities #HH3 - Further the preservation, rehabilitation, or construction of affordable housing in Alameda, and #HH8 Streamline housing production.
ENVIRONMENTAL REVIEW
This action is not a project subject to environmental review under the California Environmental Quality Act.
CLIMATE IMPACT
There are no identifiable climate impacts or climate action opportunities associated with the subject of this report.
RECOMMENDATION
Adopt a resolution authorizing the City Manager to submit a PDP Application to HCD for the Housing Authority to become eligible for PIP funds and authorizing the City Manager to execute all documents deemed necessary or appropriate.
Respectfully submitted,
Allen Tai, Planning, Building and Transportation Director
By,
Steven Buckley, Planning Services Manager
Lisa Fitts, Housing and Human Services Manager
Financial Impact section reviewed,
Margaret O’Brien, Finance Director
Exhibit:
1. Draft Prohousing Designation Program Application
cc: Vanessa Cooper, Alameda Housing Authority