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CITY COUNCIL AGENDA REPORT
City of Anaheim
HOUSING AND COMMUNITY DEVELOPMENT
DEPARTMENT
DATE: OCTOBER 24, 2023
FROM: HOUSING AND COMMUNITY DEVELOPMENT DEPARTMENT
SUBJECT: RESOLUTION AUTHORIZING THE FILING OF AN
APPLICATION TO THE U.S. DEPARTMENT OF HOUSING AND
URBAN DEVELOPMENT FOR PATHWAYS TO REMOVING
OBSTACLES TO HOUSING (PRO HOUSING) GRANT FUNDING
ATTACHMENT (Y/N): YES ITEM # 17
GOVERNMENT CODE § 84308 APPLIES: NO
RECOMMENDATION:
That the City Council:
1. By Resolution, authorize the filing of a U.S. Department of Housing and Urban Development (HUD) Pathways to Removing Obstacles to Housing (PRO Housing) grant application for approximately $6,994,659 for the creation of an Affordable Housing Trust Fund and City Livability Lab; authorizing the Director of Housing and Community Development, or her designee, to receive and administer grant funding and act as the Agent of the City on all matters concerning this grant program.
2. By Motion, approve increasing the Housing and Community Development Department’s Fiscal Year 2023/2024 revenue and expenditures budget accordingly if the grant application is successful and funds are approved.
BACKGROUND:
On July 27, 2023, The U.S. Department of Housing and Urban Development (HUD) issued a Notice of Funding Opportunity (NOFO) for the Pathways to Removing Obstacles to Housing (PRO Housing) grant program that will support communities who are actively taking steps to remove barriers to affordable housing, such as:
Barriers caused by outdated zoning, land use policies, or regulations; Inefficient procedures;
Gaps in available resources for development;
Deteriorating or inadequate infrastructure;
Lack of neighborhood amenities; or
Challenges to preserving existing housing stock such as increasing threats from natural hazards, redevelopment pressures, or expiration of affordability requirements.
PRO Housing Grant Application
October 24, 2023
HUD has made $85 million of competitive, first-time grant funding available for recipient communities that demonstrate progress and a commitment to overcoming local barriers to facilitate the increase in affordable housing production and preservation; and for communities with an acute demand for affordable housing, primarily those households with incomes below 100 percent of the area median income. Grantees may use awards to further develop, evaluate, and implement housing policy plans, improve housing strategies, and facilitate the overall production and preservation of affordable housing. The grant program has a six-year performance period with an estimated project start date of January 31, 2024, and an approximate end date of September 30, 2029.
The City continues to explore opportunities to increase the production of affordable housing and overcome barriers to production, including the lack of funding, policy and process streamlining, and organizational capacity. The City’s Draft Sixth Cycle Housing Element outlines various policies and programs to address the need for housing that align with the eligible activities under the PRO Housing grant.
DISCUSSION:
The City is proposing to leverage PRO Housing grant funds to develop two transformational mechanisms to facilitate affordable housing production and preservation: the Anaheim Housing Trust Fund and the City Livability Lab. These mechanisms will provide both immediate relief to the critical housing shortage in the City and lay the foundation for long-term systemic change.
The first mechanism is the creation of an Anaheim Housing Trust (the Trust). Outlined as a housing production strategy goal in the City’s Draft Sixth Cycle Housing Element, the Trust is a tool that facilitates a long-term, locally-controlled financing solution to bolster affordable housing development and preservation. Affordable housing developments require a complex layering of local, state, and federal financing sources.
The City has a long track record of successfully leveraging our scarce locally-controlled funds to acquire land or provide gap financing to make developments financially feasible. The Trust would add another vehicle to receive funds from other government, business, and philanthropic partners that could be controlled locally to assist in unlocking the pipeline of affordable housing developments and initiatives. PRO-Housing grant funds will enable the City to enlist the services of financial and legal consultants to establish the Trust while also supplying the initial seed funding in the amount of $1,000,000. Staff recommends that the Authority commit $2,000,000 in Low and Moderate Income Housing Asset funds as additional seed funding for the Trust.
Operating independently with its distinct legal and financial structure, Staff would bring forward a future item for Council consideration to enable the creation of the Trust, including oversight and operational recommendations in late spring 2024.
The second mechanism is the creation of City Livability Lab (the Lab). As a new autonomous group operating within the City, The Lab would provide opportunities for innovative, systemic-oriented shifts in planning, policy, and implementation to address PRO Housing Grant Application
October 24, 2023
the affordable housing crisis and quality of life issues through neighborhood-centered revitalization strategies.
PRO Housing grant funds would facilitate the creation and initial staffing of the Lab, which includes salaries for (4) full-time staff positions that would dedicate their time solely to conducting innovative research, creating implementation strategies to improve quality of life and removing blight, increasing by-right permitting opportunities as well as conduct community outreach and engagement. The Lab would also actively seek additional grant funding opportunities and private investments to support neighborhood improvement projects and increase the capacity of funding mechanisms (including the Trust). Funding a specialized and dedicated team of experts who are insulated from day- to-day department tasks can increase the City’s organizational capacity. Lab staff would streamline and coordinate efforts, navigate policies, stay atop trends, and foster collaboration with developers and stakeholders. The Lab would revisit the previous work of the Neighborhood Improvement Program, which completed areawide assessments and outlined improvement plans. The former Anaheim Redevelopment Agency played a major role in implementing the Neighborhood Improvement Program through the acquisition/rehabilitation and conversion of dilapidated run-down market-rate apartments to long-term affordable housing. These acquisition/rehabilitation projects included the construction of new amenities such as community centers, pools, and other recreational spaces benefitting all residents in the neighborhood. An example of this is the Hermosa Village Neighborhood, which consists of 521 affordable units.
Unfortunately, due to the dissolution of Redevelopment, the funding sources used to achieve these efforts are no longer available. Dedicated senior staff members will function as a bridge between key City departments, ensuring a City-wide collaboration and coordination of efforts. PRO Housing funding is proposed to support the four years of operations. City of
Anaheim would make available sufficient staff resources in the supporting departments to provide the required in-kind match to the Project.
Staff has set ambitious yet achievable measurable outcome goals for the Anaheim PRO Housing Project, with clear metrics and timelines to help define the success of efforts by both the Anaheim Housing Trust and the City Livability Lab. As a direct result of these PRO Housing funded efforts, depending on the amount of funding sources obtained over the course of the 6-year grant period, the Housing Authority will make its best efforts to:
Finance or construct 12 developments totaling 1,010 affordable housing units. Preserve 2 at-risk affordable developments totaling 185 units. Invest $5 million in neighborhood improvement projects. Secure $6 million in public/private funding investments through the Anaheim Housing Trust Fund.
PRO Housing Grant Application
October 24, 2023
IMPACT ON BUDGET:
If the grant application is successful, the Anaheim Housing Authority will pledge $2,000,000 sourced from the Low and Moderate Income Housing Asset funds towards the creation of the Anaheim Housing Trust fund and creation of City Livability Lab.
Additionally, the Housing and Community Development Department’s FY 2023/24 budget will be increased by the actual grant amount received. The grant amount is estimated to be $6,994,659.
Respectfully submitted, Concurred by,
Grace Ruiz-Stepter Ted White
Director of Housing and Director of Planning and Building Community Development
Attachment:
1. Resolution