DATE:
March 5, 2024
TO:
Paul Buddenhagen, City Manager
FROM:
Chadrick Smalley, Community Development Director
SUBJECT:
Resolution Of The City Council Of The City Of Emeryville Authorizing The City Manager To Submit An Application For Prohousing Incentive Pilot Program Funds To The California Department Of Housing And Community Development, Execute A Request For Funds, And Enter Into A California Standard Agreement Recommendation
Staff recommends that the City Council adopt the above-entitled resolution authorizing the City Manager to submit an application, execute a request for funds, and enter into an agreement for grant funding in response to the California Department of Housing and Community Development (HCD) Prohousing Incentive Pilot (PIP) program.
Background
In an effort to address the housing crisis in the State of California, as part of the 2019-2022 Budget Act, the legislature enacted Assembly Bill 101, which established the Prohousing Designation Program. The Prohousing Designation Program identifies local policies that jurisdictions should consider adopting to address housing needs and affordability, and identifies State programs and grants for which Prohousing designated jurisdictions should receive preference or additional points. On July 28, 2022, the City Council approved the submission of an application for Prohousing Designation and on April 4, 2023, the City obtained Prohousing Designation from HCD.
HCD issued a first round of awards through the PIP program in 2023, from which the City received $575,000. On January 23, 2024, HCD released a Notice of Funding Availability (NOFA) for the second round of funding under the PIP program. This round of funding makes available approximately $9.5 million for the PIP to reward local governments with Prohousing Designations with additional funding to accelerate affordable housing production and preservation. The NOFA specifies that 14.5% of the funds are available to jurisdictions in the Bay Area region.
The PIP awards grant funds based on an applicant’s Prohousing Designation Program score and population size. Total potential award amounts are determined by adding an applicant’s “base award amount” with a “bonus award amount”. The base award amounts are based on population estimates as of January 1, 2023, and the City of Emeryville is eligible for a base award of $150,000. Bonus award amounts are calculated by multiplying an applicant’s Prohousing Designation score by 10,000, up to a maximum of $500,000. Therefore, the maximum amount of PIP funding the City could receive is $650,000.
Eligible uses of PIP funding include:
The predevelopment, development, acquisition, rehabilitation, and preservation of multifamily, residential live-work, rental housing that is affordable to extremely low-, very low-, low-, and moderate-income households, including necessary operating subsidies.
Affordable rental and ownership housing that meets the needs of a growing workforce earning up to 120 percent of area median income, or 150 percent of area median income in high-cost areas.
Matching portions of funds placed into local or regional housing trust funds.
Matching portions of funds available through the Low- and Moderate-Income Housing Asset Fund pursuant to subdivision (d) of Section 34176 of the California Health and Safety Code.
Capitalized reserves for services connected to the creation of new permanent supportive housing, including, but not limited to, developments funded through the Veterans Housing and Homelessness Prevention Bond Act of 2014 (Proposition 41).
Assisting persons who are experiencing or at risk of homelessness, including providing rapid rehousing, rental assistance, navigation centers, emergency shelters, and the new construction, rehabilitation, and preservation of permanent and transitional housing.
Accessibility modifications.
Efforts to acquire and rehabilitate foreclosed or vacant homes.
Homeownership opportunities, including, but not limited to, down payment assistance.
Fiscal incentives or matching funds to local agencies that approve new housing for extremely low-, very low-, low-, and moderate-income households.
Applicants must meet all of the following threshold requirements for participation in the PIP:
An adopted housing element in substantial compliance, as determined by HCD.
Housing Element Annual Progress Report submittal pursuant to Government Code Section 65400 for the current or prior year, as applicable.
A completed Prohousing Designation with an authorizing resolution must be submitted prior to or in conjunction with the PIP application.
A complete application as determined by HCD.
A resolution authorizing submittal of the application to the PIP that materially comports with the PIP’s requirements and is legally sufficient as determined in HCD’s reasonable discretion, including the identification of an authorized representative.
Compliance with state and federal housing laws as determined at the sole discretion of HCD.
Applications must be submitted by March 15, 2024 with an authorizing resolution to be eligible for PIP funds. Those selected for a grant award will be required to enter into a Standard Agreement within the timeline to be provided by HCD.
Discussion
The City is seeking PIP funding to support redevelopment of some City-owned property (e.g. exempt surplus land) into below market rate housing. Eligible uses of the funds would include predevelopment costs (i.e. surveys, architect, engineering, permits, etc.) associated with rental housing developments, where residential units would be affordable to extremely low-, very low-, low-, and moderate-income households.
The City has two exempt surplus land sites that are slated to be redeveloped into below market rate rental housing and are in the pre-development phase of development. 4300 San Pablo Avenue, (APN: 049-1079-014-01 And 049-1079-017-01) was designated exempt surplus land on July 19, 2022, and is subject to a Lease Disposition and Development Agreement with EAH Housing to redevelop the site into 68 below market rate units for seniors and transitional aged youth. The Christie Sites, 5890, 5900 and 6150 Christie Avenue (APN: 049-1493-003, 049-1493-004 And 049-1493-005) was designated exempt surplus land on June 21, 2022, and is also subject to a Lease Disposition and Development Agreement with EAH Housing to redevelop the site into 362 below market rate units for individuals and families. EAH Housing has expressed an interest in pre-development funds to support the advancement of both developments.
Alignment with Housing Element Programs
An application of PIP funds would support the following program within the 2023-2031 Housing Element, which was certified by HCD on February 3, 2023.
Program L. New Funding Opportunities. The City will work with affordable housing developers to identify and leverage local, state, and federal funding programs to maximize the number of affordable units available to low-, very low-, and extremely low-income households, whenever possible. Additionally, the City will continue to analyze the benefit of joining a Joint Powers Agreement (JPA), to allow the issuance of bonds in Emeryville to support middle-income housing opportunities as offered by the California Community Housing Agency (CalCHA), the California Statewide Communities Development Authority (CSCDA) or any other entity, that is created over the Planning period.
Fiscal Impact
Adoption of the authorizing resolution has no direct fiscal impact. In the event that the City’s application for PIP is awarded, up to $650,000 will be made available for the activities described above, and the funds would be incorporated into the City’s operating budget by a future action of the City Council.
Staff Communication with the Public
None.
Conflict of Interest
None.
Conclusion
Staff recommends that the City Council adopt the above-entitled resolution authorizing the City Manager to submit an application, execute a request for funds, and enter into an agreement for up to $650,000 in grant funding in response to the HCD PIP program.
PREPARED BY: Valerie Bernardo, Economic & Community Development Coordinator II Approved and Forwarded to the
City Council of the City of Emeryville:
Paul Buddenhagen, City Manager
Attachment
Draft Resolution
Prohousing Incentive Pilot Resolution
City Council Meeting | March 5, 2024
City of Emeryville
CALIFORNIA
MEMORANDUM