CITY OF COMMERCEAGENDA REPORTCITY OF COMMERCEAGENDA REPORT
CITY OF COMMERCE
AGENDA REPORT
CITY OF COMMERCE
AGENDA REPORT
TO: Honorable City Council
FROM: City Manager
SUBJECT: Resolution Approving the City of Commerce Execution of a Joint Powers Agreement Relating to the Membership in the Gateway Cities Affordable Housing Trust Meeting Date: January 24, 2023
RECOMMENDATION:
It is recommended that City Council approve a Resolution approving the City of Commerce’s execution of the Joint Exercise of Powers Agreement relating to membership in the Gateway Cities Affordable Housing Trust and authorize the Mayor to execute the Gateway Cities Affordable Housing Trust Joint Powers Authority (JPA) Agreement.
BACKGROUND:
The Gateway Cities region of Los Angeles County includes 27 cities located along the I-710 corridor in eastern Los Angeles County. Early in 2021, the Gateway Cities Council of Governments (GCCOG) obtained State funding from the Southern California Association of Governments (SCAG) to explore the formation of an affordable housing trust within the region.
Since then, GCCOG and their consultant conducted the following activities:
Interview the GCCOG cities to determine their housing needs and priorities, explain the concept of the Trust, and investigate their interest in being a member.
Interview other stakeholders in the region in the same fashion, including the County of Los Angeles, affordable housing developers, financing entities, advocates, research organizations, and other related entities to gain their perspectives.
Provide an overview of best practices from other local housing trust fund studies, as well as a comparative review of the range of organizational and governance structures.
Conduct a study of the overall housing needs in the region, determine the existing sources of support to meet these needs, and estimate how much additional funding support will be needed for cities to meet these needs and satisfy their Regional Housing Needs Assessment obligations.
Identify affordable and homeless housing developments planned within the Gateway Cities, including those in construction and those in the entitlement and pre-development phases. Compare the number of units to be provided and the populations to be served by these units to the housing need report.
Form a Steering Committee of Gateway COG City Managers and others to work with the Gateway Cities COG and the consultants to make the initial recommendations for how a Trust might be formed and explore the initial sources of funding to support this effort.
Based on dialogue with the Trust Steering Committee, create and support the negotiation of a Joint Powers Agreement for the Trust, and develop an Administrative Plan, Governance Structure, and Bylaws for the Trust.
Prepare a draft strategic plan for the new Trust, for review and acceptance by the Gateway Cities COG Board and final adoption by the new Board of Directors of the Trust when that Board is in place.
Develop an operational plan for the first full year of operations of the Trust, proposed as fiscal year July 1st, 2023, to June 30th, 2024.
Create a draft capital and administrative budget for the first year of Trust operations.
In late summer 2022, a Trust Steering Committee was formed including representatives from member cities, Los Angeles County, developers, and financing entities. The Trust Steering Committee met on three occasions and accomplished a variety of detailed analyses including, a review of other housing trusts’ best practices, examining potential funding sources for capital and administrative funding, discussing potential housing programs/projects, identifying the key components to the Trust Strategic Plan, and helped draft the Joint Powers Agreement.
The Steering Committee unanimously recommended the formation of an affordable housing trust for the Gateway Cities sub-region. Presentations were made to the GCCOG Committee on Homelessness, Gateway Cities City Managers, and Planning Directors Committee. All groups expressed unanimous support for the formation of a Trust.
Trust Membership
As outlined in the JPA, the Trust does not build, own, or manage housing projects. Trust cannot require that housing projects be in specific cities, require member cities to take an allocation of supportive housing units, or require that cities provide a local funding match. The Trust Board of Directors determines whether a funding application meets the Notice of Funding Availability criteria. Each local jurisdiction maintains land use control and processes the entitlement consistent with its zoning and municipal code requirements.
The JPA contains a provision that requires members to contribute towards administrative expenses of the Trust. Member cities are not required to contribute funding until July 1, 2024. Prior to this period, the Gateway Cities Council of Governments secured administrative formation funding for the Trust. The annual membership fees are based on city population:
Up to 30,000 = $7,500
30,001 to 60,000 = $15,000
60,001 to 100,000 = $32,500
Greater than 100,000 = $47,500
This amount will increase annually in an amount equal to the U.S. Bureau of Labor Statistics consumer price index for the Los Angeles-Long Beach-Anaheim area for the 12-month period preceding the year the fees are assessed.
The City would maintain the right to withdraw from the JPA subject to an approved resolution and by providing a six-month notice.
GOVERNANCE
The Trust will be a public government entity established by joint powers authority and in accordance with the Joint Exercise of Powers Act, as codified in California Government Code section 6500 et seq. The Trust will be organized to receive public and private capital and administrative funds to address local housing needs. The Trust will have an ongoing administrative revenue source from city membership fees as specified in the Trust Joint Powers Agreement (JPA) (see Attachment 2) to be signed by each city that is a member of the Trust.
The Trust is governed by a nine-member Board of Directors (Board). Pursuant to the JPA By-Laws (Attachment 3), the Board is comprised of seven elected officials whose governing body is a member of the Trust and appointed by the Gateway Cities Council of Governments Board. A Trust member city will be represented on the Board by each population category specified in the Trust Membership fee calculation. Two additional Board members are experts in homelessness or housing policy and are approved by the Gateway Cities Council of Governments City Managers Committee.
PAST AND PIPELINE OF AFFORDABLE HOUSING PROJECTS
The Trust will help cities in the Trust subregion address their Regional Housing Needs Assessment (RHNA) which is mandated by State Housing Law as part of the periodic process of updating local housing elements of the General Plan for each city. RHNA quantifies the need for housing within each jurisdiction during specified planning periods.
In the past eight-year planning period, from 2013 through 2021, the GCCOG subregion received tax credit funding for 58 projects totaling nearly 6,000 housing units.
A 2022 survey of GCCOG cities revealed that there are 38 affordable housing projects currently in the pipeline that have not yet started construction. Most of these projects need critical gap subsidy funding to start construction. These 38 pipeline projects would benefit from additional funding provided by the Trust which could accelerate and facilitate the creation of an additional 4,000 affordable housing units in the COG subregion.
CITY OF COMMERCE HOUSING PLANS
The Southern California Association of Government’s (SCAG) Regional Housing Needs Allocation (RHNA) plan provides a sustainable vision for housing in Southern California that for the first time includes planning for the existing need for 836,857 units to address overcrowded and unsafe housing conditions in the region’s most accessible locations. In addition, the region will plan for 504,970 units to accommodate population growth. To meet this cumulative housing need, the cities in our region are required to plan for a level of housing that would require up-zoning. Per the 6th Cycle RHNA allocation plan, which covers the planning period from October 2021 through October 2029 and quantifies the need for housing within each jurisdiction, the City of Commerce must allocate a total of 246 homes ranging from very-low to above-moderate income levels. Joining the Trust will allow the City an increased competitive advantage when applying for local, federal, and state monies to preserve and produce a spectrum of housing as well as fulfill the compliance factor for those monies. It will also provide the City an opportunity to collaborate and meaningfully engage with municipalities to find local solutions to make our housing projects possible.
ANALYSIS:
Staff recommends that the City of Commerce (City) join the Gateway Cities Affordable Housing Trust (Trust), a Joint Powers Authority (JPA) formed among the cities within the Gateway Cities region. The Trust provides funding to preserve and produce affordable housing, through local, state, and federal grants earmarks, and programming. These funds improve the financial viability of individual housing projects and programs. This funding can also increase each project’s competitiveness for additional state and federal funding sources. Additionally, the Trust works with a variety of government and philanthropy groups to attract more housing funds to the Gateway Cities region. Joining the Trust would support the City to achieve the stated goals and objectives of the 6th Cycle Housing Element and support the region to bring new dollars to help fund more affordable housing development. To become a member, the City Council would adopt a resolution and authorize the Mayor to execute the JPA with Trust.
ALTERNATIVES:
Approve staff recommendations; or
Provide further direction to staff
FISCAL IMPACT:
The fiscal impact is unknown at this time.
RELATIONSHIP TO STRATEGIC GOALS:
The City of Commerce Strategic Action Plan, Economic Growth Guiding Principal No. 3, encourages and supports a long-range planning vision through the City’s General Plan, zoning ordinance, and related land use planning documents that incorporate community and stakeholder input and provides a compass for strategic economic growth, infrastructure investments, and city.
Prepared by: Gisselle S. Delgado, Management Analyst
Reviewed By: Vilko Domic, Assistant City Manager
Approved as to form: Noel Tapia, City Attorney
Respectfully submitted: Edgar P. Cisneros, City Manager ATTACHMENTS:
Resolution
Trust Joint Powers Authority Agreement
Trust Joint Powers Authority By-Laws