Cotati City Council
Agenda Staff Report
Item type: CONSENT CALENDAR (ACTION)
To: City Council
Subject: Request for City Council Authorization to submit an application to receive a "Prohousing" designation from the California Department of Housing and Community Development and submit a grant application for pilot program funds Date: February 14, 2023
Written by: Noah Housh, Director of Community Development Recommendation
It is recommended that the Council of the City of Cotati adopt resolutions authorizing staff to submit for a "Prohousing" Designation from the California Department of Housing and Community Development and submit a grant application for pilot program funds.
Background
The City of Cotati has an opportunity to become a Prohousing Designated jurisdiction in the State, which provides a competitive advantage for grant funding opportunities and further demonstrates the City’s commitment to the development of affordable housing in our community.
In 2019, AB 101 established the Prohousing Designation Program (PDP) 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 June 7, 2021, HCD released the PDP Emergency Regulations and Jurisdictions were able to begin applying for the Prohousing Designation starting July 1, 2021. Applications are reviewed on a rolling basis.
On December 15, 2022, HCD released the Notice of Funding Availability (NOFA) for the Prohousing Incentive Program (PIP), a direct pool of $25.7 million available to local jurisdictions with an application deadline of March 15, 2023.
Finally, draft Housing Element Program 3-6 identifies that the City will explore the local feasibility of achieving the “Prohousing Designation” from HCD.
Analysis/Discussion
After considering the policies and programs included in the draft Housing Element, and the City Council’s recent actions in approving the Cotati Station Apartment project, staff feels the existing housing policies and practices established by the City make an application for the Prohousing Designation competitive. Given this, staff is recommends that the City Council adopt the state mandated resolution required to apply for the PDP program. The adoption of this resolution will preserve the City’s ability to apply for the program while the City is in compliance with all applicable State housing laws. The timing of the application is also ideal as the City is in the process of updating the Housing Element.
The primary motivation for this application is that jurisdictions awarded a Prohousing Designation receive a competitive advantage on some affordable housing and infrastructure grant programs, including the Affordable Housing Sustainable Communities Program, Transformative Climate Communities, and the Infill Incentive Grant Program.
In addition to providing priority for a variety of funding sources, HCD announced on December 15, 2022 that an additional $25.7 million would be available through a separate Prohousing Incentive Pilot (PIP). Of these funds, the City of Cotati is eligible to apply for a base amount of $75,000 and a bonus of up to $500,000, for a maximum total of $575,000. Eligible uses include directly funding affordable housing and matching contributions to local/regional housing trust funds. The application for PIP funding is due March 15, 2023, and applicants are required to have received or applied for the Prohousing Designation at the time of application to the Prohousing Incentive Pilot.
PROGRAM REQUIREMENTS:
HCD’s review and consideration for designating jurisdictions as Prohousing include the following policies, concepts, and standards that direct HCD's review and consideration of a Jurisdiction for a Prohousing Designation:
(A)The Jurisdiction’s actions to facilitate the planning, approval, or construction of a variety of housing types (e.g., increasing zoned capacity for supply, facilitating affordability for all income levels, removing regulatory barriers to development, and streamlining approval).
Such action should be balanced by the Jurisdiction’s equal efforts to prevent displacement, preserve existing affordable housing, and establish tenant protections. (B) The Jurisdiction’s accomplishment of integrated planning and development consistent with the state planning priorities set forth at Government Code section 65041.1 and/or the regional transportation plan adopted by the relevant transportation agency pursuant to Government Code sections 65080 and 65080.01. The Jurisdiction may accomplish this outcome through various actions, including, but not limited to, the facilitation of Location Efficient Communities that reduce auto dependence and VMT, and that are consistent with climate change priorities (e.g., climate change adaptation and hazard mitigation). (C) The Jurisdiction’s meaningful actions to foster inclusive and equitable communities with adequate, affordable, and accessible housing and transportation infrastructure pursuant to Government Code section 8899.50.
(D)The Jurisdiction’s collaboration with public entities to align policies and programs, and with private entities to implement policies and to leverage funding and other resources. (E) The Jurisdiction’s compliance with established housing law and recent housing reform statutes (e.g., the Housing Accountability Act, the Streamlined Ministerial Approval Process (California Senate Bill 35 (2017)), and the Housing Crisis Act of 2019 (Stats. 2019, ch. 654).
The application will ascribe points using four scoring categories. Applicants must demonstrate that they have enacted or proposed at least one policy that significantly contributes to the acceleration of housing production in each of the four categories. A Prohousing Designation requires a total score of 30 points or more across all four categories and enhancement factors:
1. Favorable Zoning and Land Use (18 possible points). Examples include allowing duplexes, triplexes, and fourplexes by right in single-unit dwelling zones, going beyond the State Density Bonus Law, going beyond State law for Accessory Dwelling Units (ADUs), eliminating off-street parking requirements, and allowing residential land uses in non-residential zones.
2. Acceleration of Housing Production Timeframes (19 possible points). Examples include ministerial approval processes for a variety of housing types, streamlined environmental review processes, streamlined permitting processes, and reduced plan check times.
3. Reduction of Construction and Development Costs (11 possible points). Examples include deferred, reduced, or waived impact fees and pre-approved plans for ADUs and missing middle housing types.
4. Providing Financial Subsidies (21 possible points). Examples include participating with a local housing trust fund, offering surplus City-owned land for affordable housing development, and prioritization of local general funds for affordable housing.
Additionally, Enhancement Factors (9 possible points) provide bonus points for strong Housing Element programs.
HCD has 60 days from the time the Prohousing Designation application is submitted to issue preliminary findings to the City. The City has 15 days to provide a written response to HCD.
HCD then has 60 days to issue a final determination of the designation as a Prohousing Jurisdiction.
Should the Council approve this resolution, staff will prepare the application for the PDP and PIP Programs and submit to the State for its initial determination. The intent of the approval for a PIP application is to be ready to quickly apply to meet the March grant deadline. Staff are still discussing which project to apply for, but the project will be aligned with the Housing Element or other City Council priority projects that are permissible under the grant guidelines.
Financial Considerations
There are no known direct financial impacts to the general fund resulting from the approval of the attached resolution. The Prohousing Designation Program will provide the City with advantages in certain grant funding programs, which may result in additional grant funding for affordable housing and infrastructure in the future. The Prohousing Incentive Pilot Program will provide the City with the opportunity to apply for up to $575,000 in funding.
Technical support from the Napa Sonoma Collaborative is funded by a State grant and thus regional planning staff hours to prepare the application will not be charged to the City. It is expected that staff will provide the project and the Napa Sonoma Collaborative will package the grant and submit it on behalf of the City.
Environmental Issues
This action is exempt from the California Environmental Quality Act (CEQA) because it is not a project which has a potential for resulting in either a direct physical change in the environment, or a reasonably foreseeable indirect physical change in the environment, pursuant to CEQA Guideline section 15378. Additionally, adoption of this Resolution is exempt from the California Environmental Quality Act (CEQA) under the “common sense” exemption in CEQA Guidelines Section 15061(b)(3) as it can be seen with certainty that there is no possibility that the activity in question may have a significant effect on the environment.