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0 DATE:September 3, 2024
TO:Mayor and Members of the City Council
VIA:Stefan Chatwin, City Manager
Marlene Subhashini, Assistant City Manager
FROM:Sofia Mangalam, Community Development Director
Leslie Carmichael, Consultant Planner
DEPARTMENT: Community Development
SUBJECT:HOUSING ELEMENT 2023-31 IMPLEMENTATION ROADMAP
AND FINDING THAT THE ROADMAP IS WITHIN THE SCOPE
OF THE ENVIRONMENTAL IMPACT REPORT (SCH NUMBER
2022010509) PREPARED FOR THE FOSTER CITY HOUSING
AND SAFETY ELEMENTS UPDATE
RECOMMENDATION
It is recommended that the City Council approve the attached Resolution (Attachment 1) approving the Housing Element 2023-31 Implementation Roadmap (Roadmap) and finding that the Roadmap is within the scope of the Environmental Impact Report (SCH Number 2022010509) prepared for the Foster City Housing and Safety Elements Update.
EXECUTIVE SUMMARY
The Housing Element is an integral part of the Foster City General Plan that serves to identify the community’s housing needs; state the community’s goals and objectives for housing production, rehabilitation, and preservation, and conservation to meet those needs; and define the policies and programs that the community will implement to achieve the stated goals and objectives. On March 20, 2024, the City Council adopted a General Plan Amendment consisting of revisions to the 2023-31 Housing Element. It includes seven (7) goals, 37 policies and 106 programs to be implemented over an 8-year period.
Government Code Section 65400 requires each jurisdiction to prepare an Annual
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0 Progress Report (APR) on the jurisdiction’s status and progress in implementing its housing element. Each jurisdiction’s APR must be submitted to the Department of Housing and Community Development (HCD) and the Governor’s Office of Planning and Research (OPR) by April 1 of each year (covering the previous calendar year. HCD has created the Housing Accountability Unit to ensure that jurisdictions follow through with their Housing Element commitments by implementing its goals, policies and programs.
In order to stay on track for a timely implementation of the goals, policies and programs outlined in the Housing Element, staff prepared a draft Roadmap and presented it to the City Council on August 19, 2024. At the meeting, staff sought direction from the Council on the draft Roadmap, including the following:
1. Does the City Council agree with the Guiding Principles presented in the Roadmap?
2. Does the City Council agree with the key strategies identified?
3. Should programs be added or subtracted from the Table 2, "Proposed Funding Summary by Program" as proposed for funding at this time?
4. Are the funding amounts in Table 2, "Proposed Funding Summary by Program" generally acceptable?
The City Council, by Minute Order, accepted the draft Roadmap as presented in the staff report. Staff also noted that staff will return to the City Council at a future date for: 1) acceptance of the Roadmap and direction to pursue Notice of Funding Availability (NOFA) opportunities, 2) approval of the application for the HCD issued 2024 Local Housing Trust Fund (LHTF) Program NOFA in the amount of up to $5M, and 3) associated budget amendments/appropriations.
In a separate staff report for September 3, 2024, staff is recommending approval of the application for the HCD LHTF Program in the amount of up to $5M, and associated budget amendments/appropriations.
BACKGROUND/ANALYSIS
Implementation of the Housing Element includes the unit production goal of 1,896 units (777 market rate and 1,119 below market rate), the City of Foster City’s assessed Regional Housing Needs Allocation (RHNA) target. To reach the assessed target for below market rate (BMR) units, the City of Foster City must either facilitate development of a substantially greater number of market rate units than the target (if it relies solely on the 20% inclusionary housing requirements) and/or the city must facilitate development of 100% affordable projects. In addition to new production, implementation includes preservation of existing affordable units and providing fair housing and other program information and services.
The Roadmap is a strategy to guide planning and manage priorities for implementation of the Housing Element policies and programs, with special focus on the near-term priorities to facilitate meeting the seven (7) goals and 37 policies of the Housing Element, and the issued RHNA targets for the eight-year planning cycle. The Roadmap includes 7 3
0 recommendations for leveraging the city’s available housing funds by using them as matching funds for county and state housing funding opportunities advertised through Notices of Funding Availability (NOFAs). Staff sees this as a working document that will be modified and adjusted as conditions change, such as when new funding opportunities become available, funding applications are not successful, or opportunities for collaboration with other jurisdictions or organizations become available. The Roadmap identifies potential sources of funding and could also provide the staff with the flexibility to apply for future funding opportunities up to a certain amount that are consistent with the Housing Element goals and policies in order to provide staff with the ability to respond to short-turnaround applications. It includes prioritization of programs, financial analysis, and recommendations for the use of the city’s limited available housing funds.
The City maintains several funds related to affordable housing. Some of these funds are available for implementation of Housing Element programs and some are dedicated for specific purposes. The various funds and their sources are described in detail in the Roadmap.
At the present time, the amount of housing funds available for implementation of Housing Element program adds up to approximately $8 million as shown in Table 1. The amounts available in each fund may change slightly when the FY 2023-24 closing balances are finalized. Because the main source of funds, the Commercial Linkage Fee (Fund 137), is dependent on the timing, amount, and type of future development, the projection for additional funds is uncertain. In addition, approximately $1.4 million in shared equity for the seven Emerald Bay ownership units would be added to Fund 122 if those units are sold or refinanced after the deed restrictions expire in 2026, but the timing for those sales is uncertain. Staff’s recommendations assume no significant additional housing revenues within the 2023-2031 Planning period. If significant revenues are received, the spending plan in the Roadmap can be adjusted.
In addition to the funds shown in Table 1, funds in Fund 128 General Plan – Building and Construction Ordinance – Zoning Code Maintenance Fund can be used to implement programs that require amendment of the general plan or building or zoning regulations.
Table 1: Existing Housing Funding Resources
Fund
Successor
Agency
Affordable
Housing Fund
122
City
Affordable
Housing
Fund
124
Commercial
Linkage Fee
Fund 137
Local Housing
Trust Fund
145
Total
Beginning balance
6/30/24
$2,475,623 $708,648 $5,405,386 0 $8,589,657
Reserve $300,000
for EUPP Property
Reserve
$-300,000 -$300,000
Transfer
Commitment for
EUPP County
-$50,000 $50,000 0
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0 Fund
Successor
Agency
Affordable
Housing Fund
122
City
Affordable
Housing
Fund
124
Commercial
Linkage Fee
Fund 137
Local Housing
Trust Fund
145
Total
Match
Reserve for FY
2024/25 Budget
-$156,384 -$110,000 -$266,384
Transfer per FY
2024/25 Budget
-$500,000 $500,000 0
Total Available $1,969,239 $708,648 $4,795,386 $550,000 $8,023,273 From time to time, staff applies for grants and funds at County, Regional, State and Federal agencies to add to the City’s financial resources or uses the services provided by these agencies. The potential sources most relevant to Foster City are provided in the Roadmap. Please refer to Exhibit A, attached to Resolution (Attachment 1).
Funding Summary
The Roadmap includes a funding strategy to utilize existing affordable housing funds together with prospective matching funds to the extent feasible as shown in Table 2 to implement Housing Element programs that requires extensive financial resources. This proposal includes using 5.49 million in City funds of the available $8.0 million, including $4,675,000 of the $5,405,386 in Fund 137 Commercial Linkage Fee, which has a five- year time limit from the date of each receipt. The funding and implementation of associated programs would be spread out over the six years remaining in the 2023-2031 Planning period.
The funding strategy outlined in Table 2 may change as additional financial resources are secured or other conditions change, including not being successful in obtaining an award of HCD LHTF monies. Staff will also collaborate with the City Attorney’s office on a more detailed review to ensure that the proposed uses of the funds are consistent with any restrictions for the specific funding sources. Staff is not proposing any spending from Fund 124 at this time in order to maximize the funds spent from Fund 137 Commercial Linkage Fee that have a time limit. The use of Fund 124 may be revisited for future Housing programs.
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0 Table 2: Proposed Funding Summary by Program (see page 34, Attachment 1, Exhibit A) Conclusion
Upon approval from the City Council, staff will use the Roadmap as the guiding document for the following purposes:
1. The use of existing affordable housing funds for the implementation of Housing Element programs inconsistent with any restrictions for the specific funding sources; and
2. Apply for future funding opportunities up to a certain amount that are consistent with the Housing Element goals and policies.
CEQA
The consideration of the Housing Element Implementation Roadmap is exempt from CEQA under Section 15262 Feasibility and Planning Studies. The actions to implement the Housing Element are within the scope of the Environmental Impact Report (SCH Number 2022010509) prepared for the Foster City Housing and Safety Elements Update.
FISCAL IMPACT
The Housing Element Implementation Roadmap includes recommendations for spending from several of the City’s affordable housing funds. This is consistent with the purposes of these funds, including the requirement to spend Commercial Linkage Fee revenues within a specified timeframe.
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0 CITY COUNCIL VISION, MISSION, AND VALUE/PRIORITY AREA Smart Planning, Development, and the Local Economy
ATTACHMENTS:
Attachment 1 – Resolution
Exhibit A - Housing Element 2023-2031 Implementation Roadmap