City of Gonzales
CITY MANAGER DEPARTMENT
STAFF REPORT
TO: Honorable Mayor Rios and City Council
DATE: May 2, 2022
FROM: Rene Mendez, City Manager
SUBJECT: Resolution No. 2022-19 Monterey County Regional Housing Trust Fund Membership
RECOMMENDATION
It is recommended that your Council approve Resolution No. 2022-19, A Resolution of the City Council of the City of Gonzales Relating to the Joint Exercise of Powers for and Membership in the Monterey County Regional Housing Trust Fund.
BACKGROUND
On July 6, 2020, your City Council adopted a Resolution supporting a Regional Housing Trust Fund (RHTF) and allocated a portion of the City's Permanent Local Housing Allocation (PLHA) Program grant funds toward a RHTF or other program funds. The County, who took the lead to establish the RHTF, was not awarded the requested State funds in the 2020 grant application and the RHTF was not created. Working with several Cities, the County is once again attempting to establish a RHTF again and as before, requesting the City adopt a Resolution committing funds and entering into the RHTF.
Senate Bill 2 (referred to as the “Building Homes and Jobs Act”) establishes a permanent, on-going source of funding dedicated to promoting and facilitating affordable housing development. The City is considered an entitlement jurisdiction because we are part of the Urban County program with the County and the Cities of Del Rey Oaks, Sand City, and Greenfield. The latter two who just joined the program for this program period. Therefore, the City’s allocation of PLHA funds are included with Monterey County’s allocation of these funds.
REVIEW AND ANALYSIS
Joining the County and other Cities to establish a local RHTF will allow us as a region to pursue and leverage state matching funds and increase the ability to develop affordable housing in jurisdictions throughout the County. Since the City is limited in its ability to support funding for the development of AGENDA
ITEM
11 affordable housing, participating at a regional level is beneficial for the City’s efforts to develop affordable housing.
As a result, per the attached Resolution No. 2022-191, staff is recommending that the City partner with Monterey County and other Cities to submit an application to establish a Regional Housing Trust Fund through the Local Housing Trust Fund Program due on May 25, 2022.
For Gonzales, our local contribution would be our share of PLHA received by the County for a three-year period or from our local Successor Agency – Housing or Community Development Funds. Combining our contribution with the other contributions from Cities and the County to the trust fund, would potentially be matched with State funds of up to $5,000,000.
As it pertains to the County’s annual PLHA funding amount, it will not be provided until the State releases the allocation sometime in the fall when the prior year's SB2 allocation has been determined by the State. However, it can be estimated that the award will be approximately near the prior year's allocation of $1,007,784. At this point, staff is working with the County to determine the City’s portion of the amount. However, because the application is due on May 25th, 2022, it is important to take action on the proposed resolution to allow for the time necessary to prepare the application to the State for Local Housing Trust Fund program funds.
While not directly applicable to the City because we would be submitting through and are part of the Urban County entitlement designation with County, only jurisdictions that submit a recent Housing Element Annual Progress Report and maintain HCD-compliant Housing Elements are eligible for PLHA and LHTF. The City complies with these requirements.
Monterey County Housing Division invited the City to join the County and other jurisdictions to establish a Regional Housing Trust Fund to leverage state matching funds and increase the ability to develop affordable housing throughout the County. One of the challenges with developing affordable housing is that developers need more patient capital (longer-term loans) for construction financing, which establishing a LHTF would provide some of the capital needed locally and under our control. The Regional Housing Trust Fund is also supported by the Monterey Bay Economic Partnership, a group in which the City was a founding member and still maintains an active partnership.
Explain Recommendation and How it Supports the Vision
Gonzales will continue to be a safe, clean, family-friendly community, diverse in its heritage, and committed to working collaboratively to preserve and retain its small-town charm.
Explain: Providing a funding source for future development of housing needed by our community is vital to supporting the City’s Vision.
Explain how the Recommendation Directly Implements the Mission The City Council and Staff of the City of Gonzales will realize our Vision by providing the leadership, commitment, and resources necessary to provide excellent services that enhance the quality of life of our diverse community.
Explain: Participating in the creation of a local Regional Housing Trust Fund supports the Mission because it would allow the City to maximize and repurpose existing funds that will help over time enhance the quality of life for our diverse community by developing needed housing. 1 The attached resolution deviates from the City format a bit because it must comply with the State required format.
City services will be delivered in a cost-effective, respectful, and friendly manner to insure the safety and well-being of the residents and the promotion of business, recreational, housing and employment opportunities in an environmentally sustainable manner.
Explain: Please see Vision and Mission above.
Strong fiscal policies allow us to provide appropriate infrastructure for:
• Public Safety X Yes No N/A
• Housing X Yes No N/A
• Recreation X Yes No N/A
• Environment X Yes No N/A
• Education X Yes No N/A
Explain: Please see Vision and Mission above.
ALTERNATIVES
Your Council could provide alternative direction or chose not to take no action and use the funds locally.
While these are certainly options, Gonzales funds are not sufficient to set up our own Housing Trust Fund or provide sufficient capital to help defray costs; therefore, it would be much more beneficial to leverage our funds with the County and other Cities to establish a meaningful local funding source.
BUDGET IMPACT
Depending on the direction provided by your Council and the results of discussion with the County, a target/goal for the City contribution would be $50,000 annually that would be our PLHA contribution or provided from other local funds as resources become available and are appropriated by your Council. If it because necessary and resources where available, the City contribution would come from Successor Agency-Housing or Community Development funds.
CONCLUSION
It is recommended that your Council approve Resolution No. 2022-19, A Resolution of the City Council of the City of Gonzales Relating to the Joint Exercise of Powers for and Membership in the Monterey County Regional Housing Trust Fund.
Attachments:
1. Resolution 2022-19