Fremont City Council Meeting: 05/17/22 07:00 PM
3300 Capitol Avenue Div/Dept: Community Development
Fremont, CA 94538 Category: Affordable Housing
SCHEDULED
Sponsors:
STAFF REPORT (ID # 4607) DOC ID: 4607
Updated: 5/12/2022 8:13 AM by Alberto Quintanilla Page 1
LOCAL HOUSING TRUST FUND (LHTF) FUNDING RECOMMENDATION - Resolution Approving $5 Million in LHTF to Finance the Development of the 3900 Thornton Affordable Housing Project and Authorizing the City Manager to Execute Agreements with Resource for Community Development and Making Findings of CEQA Exemption
Contact Persons:
Name: Sharon Jones Dan Schoenholz
Title: Special Assistant Community Development Director Div/Dept: Community Development Community Development
Phone: 510-494-4500 510-494-4438
E-Mail: [email protected] [email protected]
Executive Summary: On July 14, 2020, the Council adopted Resolution No. 2020-32 authorizing the City Manager to apply for State of California’s Local Housing Trust Fund (LHTF) Program grant funds for development of affordable housing. Fremont received the grant award of $5 million. The State Department of Housing and Community Development (HCD) recently issued a 2022 Notice of Funding Availability (NOFA) for the LHTF Program.
In a separate item on today’s agenda, staff seeks authority to submit an application for LHTF grant funds. One of the criteria for the City to be eligible to apply for funds is that the City make a Legally-Binding Commitment to expend a minimum of 40% of the $5 million LHTF grant and matching funds.
BACKGROUND: The LHTF Program provides matching grants for the development or rehabilitation of affordable rental housing projects, Permanent Supportive Housing, transitional housing, affordable homebuyer/homeowner projects, Accessory Dwelling Units and emergency shelters.
The LHTF Program supports local entities that have identified and committed on-going sources of local affordable housing trust funds. In lieu fee programs like that established in the City’s Affordable Housing Ordinance and commercial linkage fee programs meet HCD’s definition of a local, non-traditional, on-going affordable housing funding source. LHTF Program grants must be matched dollar-for-dollar by grant recipients. At least 30% of LHTF Program and local matching funds must be expended on assistance to extremely low income (ELI) households with income of no more than 30% AMI. No more than 20% of funds may be expended on assistance to moderate income households (income of no more than 120% AMI). Remaining program funds must be expended on assistance to lower income households with income of no more than 80% AMI.
DISCUSSION/ANALYSIS: In 2020, Fremont received a $5 million LHTF grant. In order to be eligible to submit an application for affordable housing LHTF Program grant funds in response to the 2022 NOFA, HCD requires that the City have a legally-binding commitment of a minimum of 40% of the $5 million award.
Staff recommends that Council adopt a resolution committing the entirety of the $5 million LHTF grant to the development of the 3900 Thornton affordable housing development, as a Staff Report (ID # 4607) Meeting of May 17, 2022
Updated: 5/12/2022 8:13 AM by Alberto Quintanilla Page 2 binding commitment to expend the awarded funds, along with at least 1.5 dollars of City matching funds for every dollar of LHTF. City matching funds total $12,276,908.
In May of 2021, the City issued a $45 million NOFA requesting proposals for new affordable housing projects. Resource for Community Development (RCD) proposed a 128-unit permanent supportive housing project located at 3900 Thornton Avenue (3900 Thornton), Fremont CA. On November 2, 2021, the Council approved the proposed project and authorized the City Manager or Designee to execute loan agreements and take other such actions as required to provide a loan of $7.6 million for acquisition and predevelopment in the form of a 55-year loan at a rate of 3% simple interest.
The affordability matrix will be as follows:
20% Area Median Income (AMI) 19 Units
30% AMI 13 Units
50% AMI 52 Units
60% AMI 31 Units
80% AMI 12 Units
N/A 1 Property Manager’s Unit
Total Units 128 Units
The unit mix includes 40 studio apartments, 44 one-bedroom apartments, 28 two-bedroom apartments and 16 three-bedroom apartments.
The City Council appropriated $7.6 million for land acquisition and predevelopment costs.
The City agreed to match the LHTF award by 1.5 dollars for every dollar of the LHTF Program funds. Staff recommends committing $1.9 million of LHTF Program grant funds matched with $5.7 million of City funds made up of $2 million in Low- and Moderate-Income Housing Funds (Fund 111) and $3.7 million in local Affordable Housing Funds.
RCD anticipates an additional $9,676,908 will be needed for construction which the Council has not yet appropriated. Staff recommends committing $3.1 million of LHTF Program grant funds matched with $6,576,908 in City Affordable Housing Funds for construction. The balance needed would be appropriated from Affordable Housing Funds. Once RCD can demonstrate project readiness for construction, staff will return to Council for the appropriation of funds to finance construction of the project.
FISCAL IMPACT: Use of LHTF Program grant funds reduces City funding for the 3900 Thornton project, allowing City funds to be redirected from acquisition and predevelopment to construction, or to develop other projects in the future.
Staff Report (ID # 4607) Meeting of May 17, 2022
Updated: 5/12/2022 8:13 AM by Alberto Quintanilla Page 3 On November 2, 2021, Council appropriated $7.6 million for land acquisition and predevelopment costs. Staff recommends committing $1.9 million of LHTF Program grant funds matched with $5.7 million of City funds made up of $2 million in Low- and Moderate- Income Housing Funds (Fund 111) and $3.7 million in local Affordable Housing Funds.
RCD anticipates an additional $9,676,908 will be needed for construction which the Council has not yet appropriated. Staff recommends committing $3.1 million of LHTF Program grant funds matched with $6,576,908 million in City Affordable Housing Funds for construction.
ENVIRONMENTAL REVIEW: The proposed housing development has submitted a preliminary application pursuant to Senate Bill (SB) 35, which requires streamlined ministerial approval of qualifying affordable housing projects. The project as proposed in the preliminary application appears eligible for SB 35 review and approval. The project developer has not yet submitted a formal development application pursuant to SB 35, but once such an application is submitted, staff expects to find that the proposed project qualifies for streamlined ministerial approval and is therefore exempt from, and not subject tom CEQA review. If the project is later determined not to qualify for SB 35 ministerial review and the associated CEQA exemption, the project will be required to comply with the requirements of CEQA prior to the City execution of loan agreements.
As a separate and independent basis, this action also is exempt, without limitation pursuant to (1) CEQA Guidelines Section 15378 (fiscal activities that do not involve commitment to a specific project that will result in any significant physical impact on the environment); and/or (2) Section 15061(b)(2) (the funding decision has no possibility of significant effect on the environment).
ATTACHMENTS: None.
LINKS: None.
ATTACHMENTS:
• Draft Reso 2022 LHTF Commitment 3900 Thornton
RECOMMENDATION: Adopt a Resolution Approving $5 Million in LHTF to Finance the Development of the 3900 Thornton Affordable Housing Project and Authorizing the City Manager to Execute Agreements with Resource for Community Development.