Item 233/2026
Final
City of Garden Grove
INTER-DEPARTMENT MEMORANDUM
To:
Lisa L. Kim From: Ursula Luna-Reynosa
Dept:
City Manager Dept: Economic Development and
Housing
Date: 6/23/2026
Subject: Adoption of a Resolution authorizing an application for SB2 Permanent Local Housing Allocation Grant Program funds. (Grant amount: $653,368) (Action Item)
OBJECTIVE
To request that the City Council: 1. 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; 2. Approve the amended 5-Year Plan for use of PLHA Grant Program funds; and 3. 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 Developmen t (HCD) for receipt of the PLHA Grant and appropriate any funds received from the PLHA Grant Application for the purposes designated therein.
BACKGROUND
The Permanent Local Housing Allocation (PLHA) Program was established under Senate Bill 2 (SB 2) in 2017 as part of a statewide effort to address California’s housing shortage and rising housing costs. The program provides a permanent source of funding for local governments to support housing -related activities that address unmet housing needs. PLHA fund s are generated through a real estate document recording fee ($75 per transaction) and deposited into the Building Homes and Jobs Trust Fund, with approximately 70 percent of the funds distributed annually by the California Department of Housing and Commun ity Development (HCD) to eligible local jurisdictions through a formula-based allocation.
The PLHA Program provides funding for a range of eligible housing activities, including:
Activity 1 - Predevelopment, development, acquisition, rehabilitation, and preservation of affordable rental housing;
Activity 2 - Development and preservation of workforce housing and accessory dwelling units;
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Activity 3 - Matching funds for Local or Regional Housing Trust Funds; Activity 4 - Matching funds for the Low- and Moderate-Income Housing Asset Fund (LMIHAF);
Activity 5 - Capitalized reserves for supportive housing services; Activity 6 - Assistance for persons experiencing or at risk of homelessness, including rental assistance, supportive services, and shelter operations; Activity 7 - Accessibility modifications for lower -income owner -occupied housing;
Activity 8 - Acquisition and rehabilitation of vacant or foreclosed properties; Activity 9 - Homeownership opportunities such as down payment assistance; and
Activity 10 - Fiscal incentives or matching funds to support affordable housing development projects.
On July 14, 2020, the City Council conducted a public hearing and adopted Resolution No. 9654-20, approving the City’s PLHA 5 -Year Plan (2019-2023) and authorized submission of the initial PLHA grant application covering calendar years (CY) 2019 and 2020. On December 22, 2021, the City of Garden Grove was allocated up to $5,966,058 in PLHA funds over five years to support a range of eligible housing activities (see above list of activities 1-10). The CY’s 2019 and 20 20 award included the following: $1,944,315 in matching funds for the LMIHAF (Activity 4); $224,000 for assistance to persons experiencing or at risk of homelessness (Activity 6); $244,551 for hom eownership opportunities (Activity 9); and $126,993 for administration for a total of $2,539,859.
The $5,966,058 represents the City’s cumulative allocation over multiple funding years (2019–2023); however, actual annual funding amounts vary. PLHA funding is determined annually by HCD based on a formula allocation derived from SB 2 real estate document recording fee revenue, which fluctuates from year to year based on the amount of real estate transactions. As a result, the City is eligible to apply only f or the amount allocated by HCD for each specific funding year, and annual allocations may be lower or higher than those of prior years’ depending on statewide revenue trends.
On December 29, 2023, HCD released a Notice of Funding Availability (NOFA) allowing entitlement jurisdictions to apply for CY’s 2021 and 2022 PLHA allocations. In response, the City applied for, and was awarded, $2,553,236, which $2,000,170 was programmed for the predevelopment, development, acquisition, rehabilitation, and preservation of affordable rental housing (Activity 1) , $425,405 was programed for homeownership opportunities (Activity 9), and $127,661 was programed for administration.
As part of the CY’s 2021 and 2022 application, the City amended its 5-Year Plan to reallocate the remaining $121,315 previously designated under the CY’s 2019 and 2020 award from Activity 4 (Matching Funds for the LMIHAF) to Activity 9 (Homeownership Opportunities). The amendment also included the addition of Activity 1 which allowed for the programming of $2,000,170 as part of the CY’s 2021 and 2022 application mentioned above. Additional revisions include d updates to income eligibility limits and prioritization of funding for programs demonstrating strong performance and community need.
Item 233/2026
The City has made significant progress in expending PLHA funds. Of the $5,093,096 awarded to date, approximately $ 1,823,000 has been expended on the Orchard Grove Apartments project, $224,000 on operations of the Yale Navigation Center, $600,000 on the First-Time Homebuyer Program, and $128,981 on administrative costs (cumulatively, 55% of the funds awarded to date have been spent) . These expenditures demonstrate the City’s continued commitment to expanding housing opportunities and addressing local housing needs.
DISCUSSION
CY 2023 PLHA funds in the amount of $653,368 are now available to continue implementation of eligible activities identified in the amended 5-Year Plan. These funds will support ongoing affordable housing efforts. City staff recommends that the City Council allocate approximately $620,700 toward Activity 1 (Affordable Rental Housing) for the development of affordable housing units, with $32,668 allocated for administrative costs.
Staff also recommends amending the PLHA 5-Year Plan, through this application, to reallocate CY’s 2021/ 2022 funds in the amount of $724,575 from Activity 1 (Predevelopment, Development, Acquisition, Rehabilitation, and Preservation of Affordable Rental Housing) to Activity 9 (Homeownership Opportunities) to sup port the First -Time Homebuyer Program.
Additional funding for Activity 9 will allow the City to continue implementation of the First - Time Homebuyer Program, which has demonstrated strong performance by assisting 12 households through the issuance of approximately $600,000 in PLHA-funded loans.
The below chart provides a summary of PLHA fund award:
PLHA Funding Award Summary Table
2019-2023
Total
Allocation
2019/2020
Award
2019/2020
Amendment
2021/2022
Award
2021/2022
Amendment
2023
Application
Activity 1 -
Affordable Rental
Housing $2,000,170 $ 620,700
Activity 4 - Low-Mod-
Income Housing
Asset Fund $1,944,315
Activity 6 -
Homelessness $ 224,000
Activity 9 - Home
Ownership $ 244,551 $ 121,315 $ 425,405 $ 724,575 Administration $ 126,993 $ 127,661 $ 32,668 $5,966,058* $2,539,859 $2,553,236 $ 653,368
* This amount is the projected maximum amount available during the 5 -year Plan period ; annual awards are allocated based on the actual amounts collected by the State of California.
Item 233/2026
FINANCIAL IMPACT
This grant application will bring approximately $653,368 to the City to address the unmet housing needs in our community. Funds will be appropriated once a housing development project is identified and presented to the City Council for approval.
RECOMMENDATION
It is recommended that the City Council:
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, or designee, 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.
By: Dana Yang, Program Specialist
ATTACHMENT(S)
1. Attachment No. 1- PLHA 5-Year PLHA Plan
2. Attachment No. 2- PLHA Resolution
3. Attachment No. 3- PLHA Grant Application