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0 DATE: January 16, 2024
TO: Mayor and Members of the City Council
VIA: Stefan Chatwin, City Manager
FROM: Sofia Mangalam, Community Development Director
Nori Jabba, Housing Coordinator
Leslie Carmichael, Consulting Planner
DEPARTMENT: Community Development
SUBJECT: AUTHORIZING APPLICATION FOR, AND RECEIPT OF, SAN MATEO COUNTY FY 2024-25 HOUSING ASSISTANCE LOAN
AND GRANT PROGRAM FUNDS
RECOMMENDATION
It is recommended that the City Council adopt the attached Resolution (Attachment 1) authorizing the City Manager to apply for and submit the Application package to San Mateo County for grant and/or loans through the San Mateo County FY 2024-2025 Housing Assistance Loan and Grant Program, including commitment of any necessary matching funds up to $76,800 in staff costs and $135,000 in affordable housing funds, and finding the project exempt from the California Environmental Quality Act (CEQA) pursuant to CEQA Guideline Section 15061(b)(3).
EXECUTIVE SUMMARY
The San Mateo County Department of Housing issued a Notice of Fun ding Availability (NOFA) on December 5, 2023, including a more specific NOFA and Program Guidelines for funding from Federal Community Development Block Grant (CDBG), Home Investment Partnership (HOME), and other funding programs, with eligible activities that include but are not limited to Housing Development, Acquisition and Rehabilitation activities as well as Public Facility Development and Improvement activities.
The City of Foster City adopted the Foster City 2023-2031 Housing Element Update on
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0 May 22, 2023. The 2023-2031 Housing Element Update includes the following programs that may be eligible for grants or loans through the County, including the following:
•H-B-2-a Lower-Income Homeowner Rehabilitation Loans.
The City will provide or partner with a regional program to provide rehabilitation loans, energy improvement such as weatherization or solar, disaster assistance programs, and proactive outreach to lower-income homeowners.
Responsible Agency: Community Development Department
Timeframe: Implement program by December 2024
Quantified Objective: 18 new loans by 2031 or 3 per year, half of which being very low income and half of which being low income
Performance Metric(s): Number of new loans by 2031
Funding Source: Affordable Housing Fund
Geographic Targeting: Increased outreach for program participation to owners in census tracts with higher reported cost burden, 6082 and 6083 •H-B-2-b Facilitate Non-Profit Rehabilitation/Maintenance Assistance.
The City will initiate a rebate program to provide up to $5,000 in funding to very low income homeowners who cannot otherwise afford the repairs. Eligible repairs include weatherization of doors and windows, broken windows and doors, installation of smoke detectors, water-heater replacement, electrical/mechanical work, plumbing repairs, solar photovoltaic, and accessibility improvements. The City will identify possible non-profit organizations (such as Rebuilding Together Peninsula, churches, service clubs, or Girl or Boy Scouts) that can provide assistance/proactive outreach and will provide information on the City’s website and handouts at City Hall.
Responsible Agency: Community Development Department
Timeframe: Implement program by December 2024
Quantified Objectives: 6 units improved with assistance by 2031 or one very low- income owner unit improved with assistance per year
Performance Metric(s): Number of units assisted by 2031 Funding Source: Affordable Housing Fund
Geographic Targeting: Increased outreach for program participation to owners in census tracts with higher reported cost burden, 6082 and 6083 •H-E-1-a Existing Unit Purchase Program-Opportunities for Supportive Housing.
Implement the tenant preferences adopted in January 2023 for the Existing Unit Purchase Program (City-owned units) so that when vacancies occur, housing providers have an opportunity to propose renting the unit to provide supportive housing for people with disabilities and if no acceptable proposals are received, then continue to maintain the existing units owned by the City as rentals for large very low- and low-income families.
Responsible Agency: Community Development Department, City Council Timeframe: As vacancies occur
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0 Quantified Objectives: One (1) unit converted to supportive housing by 2031 Performance Metric(s): Number of units converted to supportive housing Funding Source: Affordable Housing Fund
BACKGROUND
Lower Income Homeowner Rehabilitation Program.
One of the needs identified in the Housing Element was for some assistance for lower- income homeowners to be able to maintain their properties and remain in their homes (see Housing Element p. A-24-A-31). Approximately 2,000 owner-occupied households have household incomes of less than 80% of the area median income (AMI) and are considered lower-income.
The County of San Mateo has an ongoing minor rehabilitation program through nonprofit providers (such as Rebuilding Together and Center for the Independence of Individuals with Disabilities) to provide minor home repairs. Foster City low-income homeowners are eligible for this existing program. There is not an existing program for more substantial repairs/rehabilitation needs for low-income homeowners.
Existing Unit Purchase Program/Supportive Housing.
The City of Foster City owns six (6) units rented to low and very low-income housing.
Called the Existing Unit Purchase Program (EUPP), the homes, comprised of four (4) units in two (2) duplexes and two (2) single family homes. Three (3) units were purchased in 1997, two (2) units in 2008 and one (1) unit in 2009. All six (6) units have been occupied since acquisition and are now in need of upgrades and rehabilitation. The City has contracted with HIP Housing Affordable Ventures to manage the units since early 2000.
The City intends to rehabilitate two (2) units at a time to prepare them for supportive housing beginning in 2024. Rehabilitation of the two (2) units includes electrical panel upgrades to convert the units to all electric energy use, window repairs and replacements, interior and exterior painting, replacement of flooring, bathroom upgrades, landscaping improvements, and other repairs.
County Funding Process
On December 5, 2023, the County issued NOFA for FY 2024-25 housing and community development activities, funded via Federal and State funding and the Equity Innovation Fund (EIF) Program. Under this, three (3) NOFAs are available, including Federal CDBG & Home Grant-Funded Capital Projects, Federal CDBG and ESG, State PLHA, ESG grant-funded community development activities, and Equity Innovation Fund for housing and community development activities. Staff is preparing to submit two (2) applications for “housing funding” under Federal CDBG & Home Grant-Funded Capital Projects.
The following is the schedule of events for the FY 2024-2025 NOFA •December 5, 2023: NOFA published.
•January 18, 2024: Application Submission Due Date.
•February 22, 2024: Housing & Community Development Committee (HCDC) Study Session.
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0 •February 29, 2024: HCDC Public Hearing.
•April 23, 2024: Board of Supervisors Meeting (for Funding Allocations). •July 1, 2024: Awarded funding available.
Based on 2023-24 funding, the County estimates there will be approximately $1,553,244 to distribute for Community Development activities. Once approved, this will be a two- year funding contract with funding for the second year generally intended to be the same as the first year. The City will need to submit a renewal application to receive the second year’s funding award.
The County funds community development programs and projects on a reimbursement basis. Reimbursement is provided upon submission of complete documentation of performance of program goals and supporting documentation.
ANALYSIS
Several of the implementation programs included in the Housing Element appear to qualify for funding available through San Mateo County. Funding can be provided as low interest loans or grants to the City of Foster City or a combination. County staff has advised that the funding programs aligned with Foster City’s proposed Applications will require loans that the City will need to repay. The County’s typical key loan terms include 3% simple interest.
Applications
Staff has prepared two application packages (“Application”), including:
1) to provide funding for a Lower-Income Homeowner Rehabilitation Loan Program, and a Minor Home Repair Grant Program for Seniors; and
2) to provide funding to repair/rehabilitate two (2) of the six (6) units in the EUPP for use as supportive housing.
The first Application includes two (2) components:
a) The Lower-Income Homeowner Rehabilitation Loan Program is for low- income homeowners of up to a $75,000 loan for improvements of a permanently fixed nature, including energy improvements such as weatherization and/or solar, the addition/rehabilitation of ADUs/JADUs that involve no new square footage, and other repairs/improvements. The City will contract with another agency to review applications for compliance with program guidelines, conduct site inspections, perform income verifications, execute loan documents, and verify completion of improvements. The City will issue final approvals for loans. b) A Minor Home Repair Grant for Seniors of up to $2,500 for specific types of improvements (minor home repairs/improvements of a permanently fixed nature, such as accessibility modifications, furnace/water heater replacement, or similar repairs to low-income homeowners 60 years and over.
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0 The first Application proposes that the City would contract with another organization to administer the program. If the City is successful in obtaining County funding, a Request for Proposals (RFP) will be prepared to solicit proposals from organizations to administer the program. This is similar to the program offered by Daly City in conjunction with Habitat for Humanity (https://www.dalycity.org/301/Housing- Rehabilitation-Programs).
The second Application for the proposed EUPP Rehabilitation Project would be a loan from the County to the City to rehabilitate two (2) of the six (6) homes owned by the City for use as supportive housing with the intention of rehabilitating the additional four (4) units in subsequent years as funding becomes available through future grants and loan programs. The rehabilitation project for two (2) units would include interior and exterior painting; new flooring; bathroom upgrades; cabinet replacement; energy efficiency upgrades, including window replacements, appliance replacements, electrical panel upgrades; landscaping, and other miscellaneous repairs and replacements.
County Funding Requested and Proposed City Matching Funding One of the County’s evaluation criteria is leveraging the extent to which other funding sources have been sought and committed to the project or program. Both Applications include a minimum 25% City match of funds (which can include City staff costs) as follows:
Lower-Income Homeowner Rehabilitation Program:
City staff costs: $55,000 (over two years)
City matching funds: $85,000 (over two years)
County funds requested: $400,000 (over two years)
Total Program Cost: $540,000 (over two years)
Existing Unit Purchase Program Rehabilitation for Supportive Housing:
City staff costs: $21,800
City matching funds: $50,000
County funds requested: $199,000
Total Project Cost: $270,800
The attached Resolution includes a statement of commitment to allocate the matching funds and staff time if the Application package is approved by the County.
If awarded the grant and/or loan, the City Manager will proceed with negotiating the San Mateo County FY 2024-2025 Housing Assistance Agreement committing the City to the matching fund requirement and estimated staff costs (up to $76,800 in staff costs and $135,000 in affordable housing funds). If the application is approved, staff will bring forward a staff report to the City Council to accept the San Mateo County Housing program funds, execute the Agreement, and to appropriate the applicable Lower- Income Homeowner Rehabilitation Program expenditures, the Existing Unit Purchase 5 3
0 Program Rehabilitation for Supportive Housing expenditures, as well as the required City staff costs and City matching funds in the City’s Low and Moderate Housing Income Fund 122.
California Environmental Quality Act
This action is not subject to review under the California Environmental Quality Act (CEQA) pursuant to Public Resources Code Section 21000, et seq. and the CEQA Guidelines (14 Cal. Code Regs. §§ 15000 et. seq.), including without limitation, Public Resources Code section 21065 and California Code of Regulations 15378 as the approval of the Application is exempt under the “common sense” exception (14 Cal.
Code Regs. § 15061(b)(3)) because it can be seen with certainty that there is no possibility that this action may have a significant effect on the environment.
FISCAL IMPACT
If the application is approved, staff will bring forward a staff report to the City Council to accept the San Mateo County Housing Loan and Grant program funds and to appropriate the applicable Lower-Income Homeowner Rehabilitation Program expenditures, the Existing Unit Purchase Program Rehabilitation for Supportive Housing expenditures, as well as the required City staff costs and City matching funds in the City’s Low and Moderate Housing Income Fund 122.
CITY COUNCIL VISION, MISSION, AND VALUE/PRIORITY AREA
Smart Planning, Development, and the Local Economy
ATTACHMENTS:
Attachment 1 - Resolution