Item 209/2024
City of Garden Grove
INTER-DEPARTMENT MEMORANDUM
To:
Lisa L. Kim From: Ursula Luna-Reynosa
Dept:
City Manager Dept: Economic Development and
Housing
Date: 5/14/2024
Subject: Adoption of a Resolution authorizing an application for, and receipt of, SB2 Permanent Local Housing Allocation Grant Program funds. (Grant amount:
$2,553,236) (Action Item)
OBJECTIVE
The purpose of this memorandum is to request that the City Council conduct a public hearing to receive public comments regarding the 5 -Year Plan (Attachment No. 1) for the use of Permanent Local Housing Allocation (PLHA) Program funds, approve the 5-Year Plan for use of PLHA Grant Program funds, and to adopt a resolution (Attachment No. 2) authorizing the City Manager to execute the PLHA Grant Application (Attachment No. 3), the PLHA Grant Standard Agreement and associated documents, and any amendments thereto, on behalf of the City as required by the Department of Housing and Community Development (HCD) for receipt of the PLHA Grant and appropriate any funds received from the PLHA Grant Application for the purposes designated therein.
BACKGROUND
On July 14, 2020, City Council conducted a public hearing for the PLHA 5-Year Plan, and authorized the submittal of the PLHA Grant Application through the adoption of Resolution No. 9654-20. The grant provides funding for housing -related projects and programs that assist in addressing the unmet housing needs of the community.
On December 22, 2021, the City of Garden Grove (City) was awarded $5,966,058 for the production of affordable housing to households at or below 60% of the Area Median Income; operation of the Yale Transitional Center providing shelter and services to homeless individuals; and for a First Time Homebuyer Program offering down payment assistance loans to low income households.
On December 29, 2023, HCD released the Notice of Funding Availability (NOFA) for the PLHA Program Formula Component, which allows entitlement jurisdictions to submit a returning application to access their Calendar Year (CY) 2020-2022 PLHA allocations. To date, the City has expended $2,154,926.65 of the CY 2019 and 2020 funds on the Orchard Grove Apartments development, operations at the Yale Transitional Center, and administrative Item 209/2024
expenses. Since the City has expended most of the PLHA funds available for CY 2019 and 2020, this Notice of Funding Availability issued by HCD will allow the City to apply for and access CY 2021 and 2022 PLHA funds totaling $2,553,236.
DISCUSSION
The PLHA NOFA requires the City to submit the 5 -Year Plan that was approved on July 14, 2020, or amend the plan through this application to HCD. City Staff proposes the following amendments to the PLHA 5-Year Plan:
Amendment 1: Redistribute funding from Activity 4 to Activity 1 (Exhibit A – List of Eligible Activities). This amendment will allow the City to expend funds on predevelopment, development, acquisition, rehabilitation, and preservation of multifamily affordable housing without requiring the $1 to $1 match from the City’s Low- and Moderate-Income Housing Asset Fund.
Amendment 2: Reduce the allocation for affordable housing development activities (Activity 1) and allocate additional funding to home buyer activities (Activity 9). HCD recently approved changes to the City’s First-Time Home Buyer Program authorizing the use of PLHA funds to increase the maximum loan amount to $110,000 at 0% interest for down-payment assistance. The maximum loan amount available through PLHA to a hous ehold is $50,000.
However, these funds will be combined with the City’s existing CalHome f unds to provide qualified home buyers with up to $110,000 in assistance.
Amendment 3 : The CY 2020 PLHA allocation has $121,315 of unexpended funds from Activity 4. This amendment would shift the remaining funds to Activity 9, which will allow the City to assist additional home buyers in Garden Grove.
Amendment 4: Increase the income limits for Activity 9 to 120% of the area median income (AMI) in Orange County. This increase from 80% AMI to 120% AMI would allow additional households to qualify for down-payment assistance through the City’s First-Time Home Buyer Program.
Amendment 5: Increase the income limits for Activity 1 to 80% AMI in Orange County. This adjustment from 60% to 80% AMI aims to grant the City greater flexibility during negotiations with affordable housing developers regarding affordability thresholds within a project.
FINANCIAL IMPACT
There is no impact to the General Fund. This grant application will bring approximately $2,553,236 to the City to address the unmet housing needs in our community. Funds will be included as part of the budget for FY 2024-25.
RECOMMENDATION
It is recommended that the City Council:
Item 209/2024
• Conduct a public hearing to receive comments regarding the 5 -Year Plan for use of PLHA Grant Program funds;
• Approve the amended 5-Year Plan for the use of PLHA Grant Program funds; and
• Adopt the Resolution authorizing the City Manager to execute the PLHA Grant Application, the PLHA Grant Standard Agreement and associated documents, and any amendments thereto, on behalf of the City as required by the Department of Housing and Community Development (HCD) for receipt of the PLHA Grant.
ATTACHMENTS:
1. Exhibit A – List of Eligible Activities
2. Attachment No. 1 – PLHA 5-Year PLHA Plan
3. Attachment No. 2 – PLHA Resolution
4. Attachment No. 3 - PLHA Grant Application