v . 0 0 5 P a g e | 1
June 3, 2025
ITEM TITLE
Grant Funds: Rescind 2024 Permanent Local Housing Allocation Plan Amendment and Restore Full Allocation of Grant Award to Fund Chula Vista Village at Otay Shelter Operations Report Number: 25-0101
Location: No specific geographic location
Department: Housing and Homeless Services
G.C. § 84308 Regulations Apply: No
Environmental Notice : The activity is not a “Project” as defined under Section 15378 of the California Environmental Quality Act State Guidelines. Therefore, pursuant to State Guidelines Section 15060(c)(3), no environmental review is required. Notwithstanding the foregoing, the activity qualifies for an Exemption pursuant to Section 15061(b)(3) of the California Environmental Quality Act State Guidelines.
Recommended Action
Adopt a resolution of the City Council of the City of Chula Vista rescinding Resolution No. 2024 -0299 and thereby reverting to the previously approved Permanent Local Hous ing Allocation (“PLHA”) Plan priorities adopted by Resolution No. 2023 -001, which authorize the use of PLHA grant funds from the State of California Department of Housing and Community Development (“HCD”) for operation of the Chula Vista Village at Otay shelter, pursuant to the PLHA Plan second amendment. (Resolution No. 2023-001.)
SUMMARY
In 2020, the City of Chula Vista (“City”) applied for and received funds under the Permanent Local Housing Allocation (“PLHA”) Grant Program administered by the California Department of Housing and Community Development (“HCD”). In December 2024, the City adopted Resolution No. 2024-229 to comply with a now- rescinded HCD directive that required jurisdictions to allocate 40% of PLHA funds to Af fordable Owner- Occupied Workforce Housing (“AOWH”).
Following the HCD’s January 2025 clarification that this requirement does not apply to previously approved plans, City staff recommends rescinding Resolution No. 2024-229. This action will formally restore the City’s prior PLHA Plan as adopted under Resolution No. 2023 -001, which designates all PLHA funding for shelter P a g e | 2
operations and associated wrap -around services. This rescission aligns the City ’s legislative record with actual funding use and maintains transparency with the public and auditors.
ENVIRONMENTAL REVIEW
The Director of Development Services has reviewed the proposed activity for compliance with the California Environmental Quality Act (CEQA) and has determined that the activity is not a “Proje ct” as defined under Section 15378 of the State CEQA Guidelines because it will not result in a physical change in the environment.
Therefore, pursuant to Section 15060(c)(3) of the State CEQA Guidelines, the activity is not subject to CEQA.
In addition, notwithstanding the foregoing, it has also been determined that the activity qualifies for an Exemption pursuant to Section 15061(b)(3) of the State CEQA Guidelines. Thus, no environmental review is required.
BOARD/COMMISSION/COMMITTEE RECOMMENDATION
Not Applicable
DISCUSSION
In 2017 the California (“State”) Legislature passed Senate Bill 2, the Building Homes and Jobs Act Trust Fund (“SB 2”) and the Planning Grants Program (“Program”) establishing an annual, formula -based permanent source of funding to local jurisdictions to increase affordable housing opportunities in California. This Program is funded by certain real estate transactions and estimated to generate between $250 and $300 million annually which is distributed among local jurisdictions throughout the State. The City of Chula Vista (“City”) is an entitlement jurisdiction and is therefore allocated a certain percentage of funding from the Program per year. The amount ultimately awarded to City for each allocation year depends on the amount of Permanent Local Housing Allocation (“PLHA”) grant funds available. To date, the City has been awarded funding in the amount of $6,122,919 from all five fund allocation years.
In 2020, HCD required the City submit an application and provide a pl an for how the PLHA funds would be spent (the “Plan”). The City submitted an initial application containing its original PLHA Plan in July 2020 and subsequently submitted an amended Plan further outlining how the funds would be spent. In accordance with the Program requirements, the City has continued to submit an additional streamlined application for each of the remaining five years detailing funds allocated in previous years. The evolution of the City’s PLHA Plan has been documented through a series of Council resolutions.
The initial City PLHA Plan submitted to HCD in July 2020, Resolution No. 2020-161, outlined the City’s intent to use the funds for three different activities: 1) Bridge Shelter Operations; 2) Permanent Supportive Housing development; a nd 3) Accessory Dwelling Unit financing for Chula Vista homeowners. These funding priorities were identified through public participation for the City’s Housing Element 2021-2029 goals. The City was then able to identify alternative funding methods for activities 2 and 3 through the HOME American Rescue Plan and San Diego Association of Governments Housing Acceleration Program funds.
With those alternative resources in place, the City Council adopted Resolution No. 2023 -001, amending the City’s initial Plan to direct the full PLHA Grant award amount to support the operations of the Chula Vista Village at Otay bridge shelter and related wrap -around services. This shift reflected both an urgent community need and the opportunity to focus PLHA resources efficiently and sustainably.
P a g e | 3
On October 15, 2024, HCD issued the 2024 Notice of Funding Availability (“NOFA”) release, which initially required that 40% of PLHA funds (approximately $264,545 of the City’s next allocation) be designated for Affordable Owner -Occupied Workforce Housing (“AOWH”). To comply, Staff prepared a new program concept and accompanying amendment (“2024 PLHA Plan Amendment”) which was presented to Council on December 3, 2024 , Resolution No. 2024 -229. However, in January 2025, HCD issued a revised NOFA clarifying that the 40% AOWH requirement applies only to first-time PLHA Plan applicants. As a previously approved jurisdiction, the revised NOFA clarified that City is not subject to such requirement.
With HCD’s 2024 NOFA 40% AOWH requirement removed, the City can continue to use all available funding to provide services to Shelter residents, since there are few eligible funds that are continuously available for this use. As such, it is the City’s intent to maintain its initial funding priority for Shelter operations as outlined in the PLHA Plan adopted under Resolution No. 2023-001.
For the above reasons, s taff recommends that Council rescind Resolution No. 2024 -229. The City did not submit its 2024 PL HA Plan Amendment adopted under Resolution No. 2024 -229 to HCD , and did not implement any programs or activities under the AOWH allocation. As a result, rescission would not alter any adopted or executed use of funds and would not require formal notification or re-submittal to HCD.
Approval of the proposed resolution would rescind Resolution No. 2024-229 and thereby formally restore the operative Plan adopted under Resolution No. 2023 -001 as the governing PLHA framework, which remains consistent with HCD guidance and is aligned with City’s strategic priorities in that it directs the use of all PLHA funds toward shelter operations and associated services. Recission of Resolution No. 2024 -229 supports City’s fiscal transparency, maintains legislative record accuracy, preserves internal consistency for audit purposes, and ensures public clarity on City funding priorities.
DECISION-MAKER CONFLICT
Staff has reviewed the decision contemplated by this action and determined that it is not site -specific and does not involve any real property interests. Therefore, the real property holdings of the City Council members do not create a disqualifying real property-related financial conflict of interest under the Political Reform Act. (Gov. Code § 87100 et seq.)
Staff is not independently aware, and has not been informed by any City Council member, of any other fact that may constitute a basis for a decision-maker conflict of interest in this matter.
CURRENT-YEAR FISCAL IMPACT
There is no fiscal impact to the City General Fund resulting from the recission of Resolution No. 2024 -229.
The City will continue to utilize existing Permanent Local Housing Allocation grant funds from HCD to support the operations of the Chula Vista Village at Otay Shelter. These funds fully offset all assoicated costs and no new funding commitments are being made as part of this action.
ONGOING FISCAL IMPACT
The City will continue to use PLHA Grant funds to support the ongoing operations of the Chula Vista Village at Otay Shelter and associated wrap-around services for emergency housing. The grant allows for up to five percent of the total allocation to be used for Program administration, funding City staff costs that are needed P a g e | 4
to carry out the proposed activity. The City’s total PLHA award across five allocation years is $6,122,919, as identified below, which remains unchanged.
5-Year PLHA Allocation
Allocation Year Amount
2019 $1,059,483
2020 $1,646,765
2021 $1,812,214
2022 $908,287
2023 $696,170
TOTAL $6,122,919
ATTACHMENTS
None
Staff Contact: Stacey Kurz, Director of Housing and Homeless Services Dania Gonzalez, Principal Management Analyst