Agenda #: 5.5
Meeting Date: April 16, 2024
TO: Honorable Mayor and Members of the City Council
FROM: Daniel Fox, City Manager
TITLE: CONTINUED PARTICIPATION IN THE LOS ANGELES URBAN COUNTY PERMANENT LOCAL HOUSING ALLOCATION ("PLHA")
PROGRAM.
STRATEGIC
GOAL: Responsible Stewardship of Public Resources
RECOMMENDATION:
A. Adopt Resolution No. 2024-13 approving the City's participation in Year 4 of the Los Angeles Urban County PLHA Program; identifying proposed activities for the expenditure of $145,682 in PLHA funding; and authorizing the City Manager to sign a reimbursable contract with the Los Angeles County Development Authority ("LACDA"); and
B. Determine that the proposed action does not constitute a project and is therefore exempt from the California Environmental Quality Act (“CEQA”).
FISCAL IMPACT:
The PLHA Program is a SB 2 funded program that provides an ongoing annual source of funding through State Property Transfer Fees. The City has been allocated $145,682 in funding for Year 4 (January 1, 2026 through December 31, 2026) PLHA Program based on the State’s allocation formula. No additional funding is required to participate in the program. If the City does NOT request the funds and identify a purpose for them, the funds will be returned to the State.
BACKGROUND
The PLHA Program was approved by the State legislature in 2017. It is designed to provide an ongoing annual source of funding for the construction of affordable housing, programs to assist persons who are experiencing or are at risk of homelessness, or other housing-related assistance programs for low-to-moderate income households.
Like the City’s Community Development Block Grant (CDBG) program allocations, the
PLHA funding is first allocated to the Los Angeles County Development Authority (LACDA). The funding is then distributed to individual participating cities according to an allocation formula. The City was allocated a combined total of $649,080 for PLHA Program Years 1 through 3 (i.e., calendar years 2023 through 2025) On June 20, 2023, the City Council adopted Resolution No. 2023-25 approving the City’s participation in the PLHA Program to expand the Home Improvement Program by increasing the maximum loan amount from $20,000 to $30,000, and extending the program to income-eligible condominium owners, and authorizing the City Manager to enter into a reimbursable contract with LACDA.
On April 1, 2024, LACDA issued a bulletin (Attachment 2) listing the Year 4 PLHA funding allocations for each participating city. Diamond Bar is listed as eligible to receive $145,682 in Year 4 PLHA funding. To begin receiving these funds, the City is required to adopt and submit a City Council resolution to LACDA by May 31, 2024, listing the program activities that will be funded.
Pursuant to the rules set forth by LACDA, Year 4 funds must be fully expended by December 31, 2026.
DISCUSSION
The SB 2 legislation relating to PLHA funds specifies what eligible activities these funds can be used to finance. Activities can be broadly categorized as follows:
1. Activities related to the construction or preservation of affordable housing or supportive housing;
2. Matching funds to regional housing trusts;
3. Homelessness services and prevention programs;
4. Accessibility modifications for lower-income, owner-occupied housing;
5. Acquisition and rehabilitation of foreclosed or vacant homes; and
6. Programs that expand homeownership opportunities including but not limited to down-payment assistance programs.
Of the eligible activities listed above, it is recommended that the City allocate its Year 4 PLHA allocation to continue funding the Home Improvement Program and Condominium Home Improvement Program. The proposed programming of these funds is summarized below:
• Home Improvement Program (HIP) – $56,545
The HIP offers deferred loans to eligible low- and moderate-income homeowners of single-family detached housing for necessary home improvements, as well as repairs to mitigate building and safety code deficiencies and/or violations. The City’s HIP policies currently provide interest-free, deferred loans of up to $30,000 to eligible households. Loans become payable when the homes are sold or refinanced.
The minimum and maximum loan amounts under this program are $5,000 and $30,000, respectively. The City proposes to allocate a portion of its PLHA award to fund at least two HIP loans. CDBG funds are available to accommodate additional participation in the program.
• Condominium Home Improvement Program (CHIP) – $60,000 The CHIP offers deferred loans to eligible low- and moderate-income homeowners of residential condominiums and townhomes. The program is administered essentially the same manner as the HIP, but the loan amount is capped at $20,000 because costlier improvements, such as roof maintenance and exterior repairs, are the responsibility of the respective condominium homeowners associations. The proposed allocation of $60,000 would fund at least three loans through the end of 2026. Unlike the HIP, CDBG funds cannot be used for CHIP loans, so excess demand would have to be accommodated in the subsequent program year.
Alternatively, the City may make adjustments to the PLHA funding allocations between the two programs, if appropriate. For example, If the demand for CHIP loans is higher than anticipated, the City could reallocate funds from the HIP allocation.
• Administration of the HIP and CHIP - $29,136
The use of PLHA funds to cover administrative costs is capped at 20%.
Therefore, $29,136 of the PLHA award is proposed to be set aside to pay consultant costs to administer these programs.
ENVIRONMENTAL ANALYSIS:
The proposed action does not constitute a project under the California Environmental Quality Act (“CEQA”). As such, this matter is exempt under CEQA.
LEGAL REVIEW:
The City Attorney has reviewed and approved the Resolution as to form.
PREPARED BY:
REVIEWED BY:
Attachments:
1. 5.5.a Resolution No. 2024-13
2. 5.5.b LACDA Bulletin No. 24-0004