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HomeMy WebLinkAboutItem 6n. Application for Prohousing Incentive Program Funds through CA Housing and Community Development Department Item 6n Department: Community Development Cost Center: 4008 For Agenda of: 4/2/2024 Placement: Consent Estimated Time: NA FROM: Timmi Tway, Community Development Director Prepared By: Teresa McClish, Housing Policy and Programs Manager SUBJECT: AUTHORIZE APPLICATION FOR PROHOUSING INCENTIVE PROGRAM FUNDS RECOMMENDATION Adopt a Draft Resolution entitled, “A Resolution of the City Council of the City of San Luis Obispo, California, authorizing application to and participation in the state Prohousing Incentive Program,” authorizing the City Manager, or Community Development Director as designee, to: 1. Submit a Prohousing Incentive Program Application to the California Department of Housing and Community Development; and 2. If the application is approved by HCD, execute all documents necessary or appropriate to participate in the Prohousing Incentive Program. POLICY CONTEXT The 2023-2025 Financial Plan Major City Goal for Housing and Homelessness is to: Support the expansion of housing options for all, and continue to facilitate the production of housing, including the necessary supporting infrastructure, with an emphasis on affordable and workforce housing as well as accessibly connected development. Collaborate with local non-profit partners, non- governmental agencies, the county, the state, and federal governments to advocate for increased funding and implementation of comprehensive and effective strategies to prevent and reduce homelessness. The Prohousing Incentive Program (PIP) provides funding to facilitate below-market-rate housing in advancement of this goal. The PIP is also consistent with the City’s policies established in the City’s General Plan Housing Element, including: Program 6.17. Financially assist in the development of 20 housing units per year that are affordable to extremely low, very-low, low- and moderate income households during the planning period using State, Federal, and local funding sources, with funding priority given to projects that result in the maximum housing benefits for the lowest household income levels. Page 407 of 596 Item 6n Program 8.20. Actively seek and collaborate with non-profit housing providers to (jointly) apply for two revenue sources each year during the planning period for State, Federal, and local funding sources to financially assist with the development of housing for persons with developmental disabilities. DISCUSSION Background The California Prohousing Designation Program (PDP) was established in accordance with Assembly Bill 101 and is administered by the California Department of Housing and Community Development (HCD). The PDP creates incentives for jurisdictions that are compliant with housing laws, housing element requirements, and have enacted Prohousing local policies that go beyond existing law. On February 1, 2024, the City was designated a Prohousing Jurisdiction under the Prohousing Designation Program by HCD. This designation allows a competitive advantage for critical affordable housing and infrastructure grant programs . It also provides eligibility for California’s Prohousing Incentive Program (PIP) for use towards planning and implementation activities related to housing and community development. The Program is funded through Chapter 364, Statutes of 2017, Senate Bill 2 which established the Building Homes and Jobs Trust Fund. The Fund utilizes real estate transaction fees collected at a county level in all counties, at the time of recording documents for every real estate instrument, to establish a permanent source of funding. Five percent of annual collections are deposited in a fund to be used for an incentive program. The PIP awards funding based on the Eligible Applicant’s Prohousing Designation Program Score1 and according to geographic area. Based on the funding formula, the City is eligible to apply for up to $750,000 and the final award amount will be decided as part of the competitive application. A Notice of Funding Availability (NOFA) Round 2 – Prohousing Incentive Program was issued by HCD on January 23, 2024. Staff is seeking City Council authorization at this time, though the application was submitted prior to the NOFA Round 2 deadline of March 15, 2024. HCD has issued an extension to April 15, 2024, to submit an authorizing resolution. Staff has determined that the application requires a new City Council authorizing resolution in addition to the Prohousing Designation, and the PIP application will be rescinded if not authorized by City Council2. Eligible uses for PIP funds include a variety of activities, such as the predevelopment, development, acquisition, rehabilitation, and preservation of multifamily, residential live-work, and rental housing that is affordable to extremely low-, very low-, low-, and moderate-income households3. 1 As codified in the California Code of Regulations Title 25 Housing and Community Development, Division 1, Chapter 6, Subchapter 6.6, Sections 6600 through 6608, Consecutive Prohousing Designation Program). 2 HCD staff has indicated application submittal m ay be made with a City Council authorizing Resolution placed on an upcoming agenda. 3 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). Page 408 of 596 Item 6n The City is applying to place funds into the City’s Affordable Housing Fund to use for eligible below market rate housing projects as determined by City Council, and as previously prioritized by Resolution No. 11468 (2024 Series), including Transitions Mental Health Association’s (TMHA) Palm Street Studios that would involve the acquisition and rehabilitation of a structure to convert to offices and up to twelve (12) supportive housing apartments. The project is utilizing funding from the No Place Like Home grant and the San Luis Obispo’s Housing NOW program that THMA launched in 2014 with the Housing Authority of San Luis Obispo (HASLO) to identify the 50 most vulnerable homeless individuals in the County and place them in permanent housing and provide them with behavioral health treatment and services. The property will be deed - restricted affordable for a minimum of 55 years, and available to TMHA clients who are within the extremely low, very-low, or low income categories. Other identified eligible projects that could be funded with PIP grant funding placed in the City’s Affordable housing Fund may include Smartshare Housing’s Waterman project on Dana Street that proposes twenty (20) small home structures for very low income eligible individuals or families and preserves the Rosa Butron Adobe; or HASLO’s Monterey Crossing project that includes fifty-six (56) affordable senior housing units. Previous Council or Advisory Body Action On June 20, 2023, the City Council approved Resolution No. 11432 (2023 Series) authorizing submittal of an application for a California Prohousing Designation. Public Engagement This item is on the agenda for the April 2, 2024, City Council meeting and will follow all the required posting and notification. Public comment on the item can be provided to the City Council through written correspondence prior to the meeting and through public testimony at the meeting. ENVIRONMENTAL REVIEW The proposed report contemplates the receipt of state incentive funds, which is not a project under CEQA, and is therefore exempt from CEQA review (CEQA Guidelines Section 15378(b)(4). Future projects that utilize PIP funding will undergo CEQA review and clearance. FISCAL IMPACT Budgeted: Yes/No Budget Year: 2024-2025 Funding Identified: Yes/No Page 409 of 596 Item 6n Fiscal Analysis: Funding Sources Total Budget Available Current Funding Request Remaining Balance Annual Ongoing Cost General Fund $N/A $ $ $ State Federal Fees Other: Total $ $ $ $ There will be no negative fiscal impact to the City. Local governments with Prohousing Designation are eligible to apply for new Prohousing Incentive Program grant funding, a $26 million state investment from the Building Homes and Jobs Trust Fun d. Applying for these funds could increase funding availability for the identified housing projects by up to $750,000. These funds, if awarded will go directly to the City’s Affordable Housing Fund. ALTERNATIVES 1. Council could choose not to apply for PIP funds at this time and apply for future rounds dependent upon future Notices of Funding Availability for the program. Staff recommends applying for the current round of PIP to make funds available for critically needed below market rate housing projects. 2. Council could choose to apply for PIP funds for a different eligible activity. Staff could identify other potential eligible uses that align with the City housing work program, however, the most urgent need for the funds is to leverage critically needed below market rate housing units. Staff does not recommend this alternative due to the time sensitive nature of the grant program application. Staff will investigate opportunities and apply where eligible for additional PIP funds in future rounds. ATTACHMENTS A - Draft Resolution authorizing application to and participation in the State Prohousing Incentive Program B - Prohousing Incentive Program Application Page 410 of 596 R ______ RESOLUTION NO. _______ (2024 SERIES) A RESOLUTION OF THE SAN LUIS OBISPO CITY COUNCIL OF THE CITY OF SAN LUIS OBISPO, CALIFORNIA, AUTHORIZING APPLICATION TO AND PARTICIPATION IN THE PROHOUSING INCENTIVE PROGRAM WHEREAS, pursuant to Health and Safety Code 50470 et. Seq, the California Department of Housing and Community Development (Department) is authorized to issue Guidelines as part of an incentive program (hereinafter referred to as the Prohousing Incentive Program or “PIP”); and WHEREAS, the City Council of the City of San Luis Obispo desires to submit a PIP grant application package (“Application”), on the forms provided by the Department, for approval of grant funding for eligible activities toward planning and implementation activities related to housing and community development as a result of meeting eligibility criteria including but not limited to Prohousing Designation; and WHEREAS, the Department has issued Guidelines and Application on January 23, 2024 in the amount of $9,483,402.17 for PIP; and WHEREAS, the City Council of the City of San Luis Obispo has duly considered all evidence, and recommendations by staff. NOW, THEREFORE, BE IT RESOLVED by the City Council of the City of San Luis Obispo as follows: SECTION 1. The City Manager of the City of San Luis Obispo is hereby authorized and directed to submit an Application to the Department in response to the NOFA, and to apply for the PIP grant funds in a total amount not to exceed $750,000 . SECTION 2. In connection with the PIP grant, if the Application is approved by the Department, the City Manager of the City of San Luis Obispo is authorized and directed to enter into, execute, and deliver on behalf of the Applicant, a State of California Agreement (Standard Agreement) for the amount of $750,000 and any and all other documents required or deemed necessary or appropriate to evidence and secure the PIP grant, the Applicant’s obligations related thereto, and all amendments thereto; and Page 411 of 596 Resolution No. _____ (2024 Series) Page 2 R _______ SECTION 3. The Applicant shall be subject to the terms and conditions as specified in the Guidelines, and the Standard Agreement provided by the Department after approval. The Application and any and all accompanying documents are incorporated in full as part of the Standard Agreement. Any and all activities funded, information provided, and timelines represented in the Application will be enforceable through the fully executed Standard Agreement. Pursuant to the Guidelines and in conjunction with the terms of the Standard Agreement, the Applicant hereby agrees to use the funds for eligible uses and allowable expenditures in the manner presented and specifically identified in the approved Application. SECTION 4. The Director of the Community Development Department is authorized to execute and deliver the Application and the Program Documents on behalf of the City of San Luis Obispo for participation in the Program. On motion by______________, seconded by ______________, and on the following roll call vote: AYES: NOES: ABSENT: The foregoing resolution was passed and adopted this _____ day of __________ 2024. ___________________________ Mayor Erica A. Stewart ATTEST: ___________________________ Teresa Purrington, City Clerk APPROVED AS TO FORM: ___________________________ J. Christine Dietrick, City Attorney IN WITNESS WHEREOF, I have hereunto set my hand and affixed the official seal of the City of San Luis Obispo, California, on ______________________. ___________________________ Teresa Purrington, City Clerk Page 412 of 596 Prohousing Incentive Pilot (PIP) Program 2024 Application for Local Governments State of California Governor, Gavin Newsom Melinda Grant, Undersecretary Business, Consumer Services and Housing Agency Gustavo Velasquez, Director Department of Housing and Community Development Megan Kirkeby, Deputy Director Division of Housing Policy Development Final Filing Date: March 15, 2024 2020 West El Camino Avenue, Suite 500, Sacramento, CA 95833 Website: https://www.hcd.ca.gov/grants-and-funding/programs-active/prohousing- incentive-program Email: ProhousingIncentive@hcd.ca.gov Page 413 of 596 X X X X X X Prohousing Incentive Pilot (PIP) Program Application Instructions The applicant is applying to the Department of Housing and Community Development (Department) for a grant authorized under the provisions pursuant to Health and Safety Code Section 50470(2)(C)(i). PIP is designed to encourage cities and counties to achieve Prohousing Designation. Please refer to the PIP Guidelines and 2024 Notice of Funding Availability (NOFA) for detailed information on eligible uses and awards. If you have questions regarding this application or the PIP Program, email prohousingincentive@hcd.ca.gov. If approved for funding, the PIP application is incorporated as part of your Standard Agreement with the Department. To be considered for funding, all sections of this application, including attachments if required, must be complete and accurate. In order to be considered for funding, all applicants must submit a complete, signed application to prohousingincentive@hcd.ca.gov by March 15, 2024. Pursuant to Section 202 of the PIP Guidelines, all applicants must meet the following threshold requirements to be eligible for funding: An adopted housing element in substantial compliance, as determined by the Department, pursuant to Housing Element Law (Article 10.6 of Gov. Code) in accordance with Government Code section 65585, subdivision (h). Threshold Requirements Demonstration of meeting threshold criteria shall be determined by the Department in its sole and absolute discretion. No documentation of meeting threshold requirements is required in the application unless requested by the Department. Housing Element Annual Progress Report submittal pursuant to Government Code Section 65400 for the current or prior year, as applicable. Prohousing Designation: An awarded or completed Prohousing Designation Application with an authorizing resolution must be submitted prior to or in conjunction with the Applicant’s PIP Application. PIP Awards cannot be made until a Prohousing Designation is awarded. A complete application as determined by the Department. NOTE: We will be submitting resolution separately by the extension deadline of April 15, 2024. An authorizing resolution authorizing submittal of the application to the Program that materially comports with the Program’s requirements and is legally sufficient as determined in the Department’s reasonable discretion, including an authorized representative. See Attachment B of the PIP Guidelines for required resolution format. Compliance with state and federal housing laws as determined by the sole discretion of HCD. Page 414 of 596 Applicant Applicant Agency Type Mailing Address City Zip Code County Website DUNS Number TIN Authorized Representative Name Authorized Representative Title Phone Fax Email Contact Person Name Contact Person Title Phone Fax Email Signature Date Name Title 95-6000781 Timothea Tway Director of Community Developme (805)781-7187 ttway@slocity.org Teresa McClish (805)781-7173 Applicant Information City of San Luis Obispo City 990 Palm Street San Luis Obispo 93401 San Luis Obispo www.slocity.org 98992407 Timothea Tway Director of Community As the official designated by the governing body (authorized representative above and in resolution), I hereby certify that, if approved by HCD for funding through PIP, the applicant assumes the responsibilities specified in the NOFA and certifies that the information, statements, and other contents contained in this application are true and correct. (805)781-7173 Housing Policy and Programs Man (805) 783-7840 tmcclish@slocity.org Page 415 of 596 X Statement of Work Plan Award funds through City Affordable Housing Fund to non-profit affordable housing developers and the Begin Sep-24 Est. Cost $750,000 Proposed Activity Notes The THMA project has previously been awarded funds from the City's Affordable Housing Fund and is Eligible Use Category 1 End 27-Sep Subtask(s) Eligible Applicants must use award funds towards any planning or implementation activities related to housing and community development including, but not limited to, any eligible uses pursuant to Health and Safety Code section 50470(b)(2)(D), as described below. Please indicate which of the following the applicant will use award funds toward: Eligible Uses Objective Summary of Proposed Activities (v) 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. (vi) 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. (i) The predevelopment, development, acquisition, rehabilitation, and preservation of multifamily, residential live-work, rental housing that is affordable to extremely low, very low, low-, and moderate-income households, including necessary operating subsidies. (ii) 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. (iii) Matching portions of funds placed into local or regional housing trust funds. (vii) Accessibility modifications. (viii) Efforts to acquire and rehabilitate foreclosed or vacant homes. (ix) Homeownership opportunities, including, but not limited to, downpayment assistance. (x) Fiscal incentives or matching funds to local agencies that approve new housing for extremely low, very low, low-, and moderate-income households. (iv) 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. Responsible Party City of San Luis Obispo Page 416 of 596 Jurisdiction Name Eligible Base Award Geographic Category Bonus Award Amount: Prohousing Designation Application Score Total Award50 750,000$ Award Amount San Luis Obispo 250,000$ Central Coast Click the dropdown menu to choose a jurisdiction. The geographic category and base award will auto-populate. If the jurisdiction has obtained Prohousing Designation at the time of PIP application submittal, enter in the Prohousing Designation applicant score. Population projections are based on the Department of Finance E-1 Jan 1, 2023 estimates. https://dof.ca.gov/Forecasting/Demographics/estimates-e1/ 500,000$ Page 417 of 596 Page 418 of 596