Agenda packet — Lancaster City Council, January 10, 2023 (part 3 of 3)

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as to form by the City Attorney; and
WHEREAS, it is in the public interest and for the public benefit that the City Council approve the issuance of the Bonds by the Agency for the aforesaid purposes; and WHEREAS, Section 3(A) of the Agreement, in accordance with Section 6508.1 of the California Government Code, expressly provides that the Bonds, and other debts, liabilities and obligations of the Agency do not constitute debts, liabilities or obligations of any Members.

NOW THEREFORE, BE IT RESOLVED BY THE CITY COUNCIL OF THE CITY OF LANCASTER, AS FOLLOWS:

Section 1. The City hereby requests to become an Additional Member of the Agency pursuant to Section 12 of the Agreement. The Agreement is hereby approved and the City Manager or the respective designee thereof is hereby authorized and directed to execute said document, and the City Clerk or such Clerk’s designee is hereby authorized and directed to attest thereto.

Section 2. The proposed form of Public Benefit Agreement on file with the City Council is hereby approved. In connection with the Project, the City Manager or the respective designee thereof is hereby authorized and directed to execute an agreement in substantially said form, with such immaterial changes therein as such officer executing the same may require consistent with this Resolution and its basic purpose, and subject to the approval as to form of the City Attorney, such approval to be conclusively evidenced by the execution and delivery thereof.

Any material changes to the form of Public Benefit Agreement must be approved by the City Council. The City Council hereby approves the issuance of Bonds by the Agency from time to time prior to the date that is the two year-anniversary of the date hereof.

Section 3. The issuance of Bonds shall be subject to the approval of the Agency of all financing documents relating thereto to which the Agency is a party. Pursuant to Section 3(A) of the Agreement and Section 13(C) of the Public Benefit Agreement, the City shall have no responsibility or liability whatsoever with respect to the Bonds or any other debts, liabilities and obligations issued by the Agency, and such Bonds and any other debts, liabilities and obligations of the Agency do not constitute debts, liabilities or obligations of any Members including the City.

Section 4. The adoption of this Resolution shall not obligate the City or any department thereof to (i) provide any financing to acquire or construct the Project or any refinancing of the Project; (ii) approve any application or request for or take any other action in connection with any planning approval, permit or other action necessary for the acquisition, construction, rehabilitation or operation of the Project; (iii) make any contribution or advance any funds whatsoever to the Agency; or (iv) except as provided in this Resolution, take any further action with respect to the Agency or its membership therein.

Section 5. The executing officers(s), the City Clerk and all other proper officers and officials of the City are hereby authorized and directed to execute such other agreements, Resolution No.

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documents and certificates, and to perform such other acts and deeds, as may be necessary or convenient to effect the purposes of this Resolution and the transactions herein authorized.

Section 6. The City Clerk shall forward a certified copy of this Resolution and an originally executed Agreement to the Agency:

Jones Hall, A Professional Law Corporation
475 Sansome Street, Suite 1700
San Francisco, California 94111
Attention: Ronald E. Lee, Esq.

Section 7. This resolution shall take effect immediately upon its passage.

PASSED, APPROVED, and ADOPTED this ____ day of ________, 2023, by the following vote:

AYES:

NOES:

ABSTAIN:

ABSENT:

ATTEST: APPROVED:

ANDREA ALEXANDER, ER
City Clerk
City of Lancaster
R. REX PARRIS
Mayor
City of Lancaster

STATE OF CALIFORNIA

COUNTY OF LOS ANGELES

CITY OF LANCASTER
)
) ss
)
Resolution No.

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CERTIFICATION OF RESOLUTION

CITY COUNCIL
I, , City of Lancaster,
California, do hereby certify that this is a true and correct copy of the original Resolution No. , for which the original is on file in my office.

WITNESS MY HAND AND THE SEAL OF THE CITY OF LANCASTER, on this ___ day of ____, 2023.
(seal)
[JH Draft 8-19-22]

RECORDING REQUESTED
AND WHEN RECORDED MAIL TO:

Jones Hall, A Professional Law Corporation
475 Sansome Street, Suite 1700
San Francisco, California 94111
Attention: Josh D. Anzel, Esq. THIS SPACE IS FOR RECORDERS USE ONLY

REGULATORY AGREEMENT AND

DECLARATION OF RESTRICTIVE COVENANTS
(Title of Document)
Per Government Code 27388.1 (a)(1) “A fee of $75 dollars shall be paid at the time of recording of every real estate instrument, paper, or notice required or permitted by law to be recorded, except those expressly exempted from payment of recording fees, per each single transaction per parcel or real property. The fee shall not exceed two hundred twenty-five dollars ($225)” Reason for Exemption:
☐ Exempt from fee per GC 27388.1 (a) (2); recorded concurrently “in connection with” a transfer subject to the imposition of documentary transfer tax (DTT). ☐ Exempt from fee per GC 27388.1 (a) (2); recorded concurrently “in connection with” a transfer of real property that is a residential dwelling to an owner-occupier. ☒ Exempt from fee per GC 27388.1 (a) (2) (D); recording fee exempt under GC 27383. ☐ Exempt from fee per GC 27388.1 (a) (1); fee cap of $225.00 reached. ☐ Exempt from the fee per GC 27388.1 (a) (1); not related to real property.

Failure to include an exemption reason will result in the imposition of the $75.00 Building Homes and Job Act Fee.

RECORDING REQUESTED BY AND
WHEN RECORDED RETURN TO:

Jones Hall, A Professional Law Corporation
475 Sansome Street, Suite 1700
San Francisco, California 94111
Attention: Josh D. Anzel, Esq.

REGULATORY AGREEMENT AND

DECLARATION OF RESTRICTIVE COVENANTS
By and Between

CMFA SPECIAL FINANCE AGENCY
and

WILMINGTON TRUST, NATIONAL ASSOCIATION,
as Trustee
Dated as of ________________ 1, 2022
Relating to
CMFA Special Finance Agency
Senior Essential Housing Revenue Bonds, Series 2022A-1
(Vello Valley)
CMFA Special Finance Agency
Junior Essential Housing Revenue Bonds, Series 2022A-2
(Vello Valley)
and
CMFA Special Finance Agency
Subordinate Essential Housing Revenue Bonds, Series 2022B (Vello Valley)

TABLE OF CONTENTS
Clause Page
Section 1. Definitions and Interpretation ............................................................................... 1 Section 2. Representations, Covenants and Warranties of the Owner ................................. 4 Section 3. Residential Rental Project .................................................................................... 4 Section 4. Tenants; Income Requirements ........................................................................... 5 Section 5. Affordable Rental Requirements; Limitations on Rent Increases; Rent Reductions ................................................................................................... 7 Section 6. Tax-Exempt Status of Bonds ................................................................................ 8 Section 7. Requirements of the Owner ................................................................................. 8 Section 8. Modification of Covenants .................................................................................... 8 Section 9. Indemnification ..................................................................................................... 9 Section 10. Consideration ....................................................................................................... 9 Section 11. Reliance ............................................................................................................... 9 Section 12. Transfer of the Project .......................................................................................... 9 Section 13. Term ................................................................................................................... 10 Section 14. Covenants to Run With the Land ....................................................................... 11 Section 15. Burden and Benefit ............................................................................................. 11 Section 16. Uniformity; Common Plan .................................................................................. 11 Section 17. Default; Enforcement .......................................................................................... 11 Section 18. [Reserved] .......................................................................................................... 12 Section 19. Recording and Filing .......................................................................................... 12 Section 20. Reserved ............................................................................................................ 12 Section 21. Governing Law; Venue ....................................................................................... 12 Section 22. Amendments; Waivers ....................................................................................... 12 Section 23. Notices ............................................................................................................... 13 Section 24. Severability ......................................................................................................... 13 Section 25. Multiple Counterparts ......................................................................................... 13 Section 26. Limitation on Liability .......................................................................................... 13 Section 27. Annual Reporting Covenant ............................................................................... 14

EXHIBIT A DESCRIPTION OF REAL PROPERTY

EXHIBIT B FORM OF INCOME CERTIFICATION

EXHIBIT C FORM OF CERTIFICATE OF CONTINUING PROGRAM COMPLIANCE

1 REGULATORY AGREEMENT AND

DECLARATION OF RESTRICTIVE COVENANTS

THIS REGULATORY AGREEMENT AND DECLARATION OF RESTRICTIVE COVENANTS (as supplemented and amended from time to time, this “Regulatory Agreement”) is made and entered into as of ________________ 1, 2022, by and between the CMFA SPECIAL FINANCE AGENCY, a joint exercise of powers authority duly organized and existing under the laws of the State of California, as issuer of the Bonds (as further defined herein) and as owner of the Project identified herein (together with any successor to its rights, duties and obligations hereunder, the “Owner”), and WILMINGTON TRUST, NATIONAL ASSOCIATION , a national banking association, as trustee (together with its successors in trust and assigns, the “Trustee”).

W I T N E S S E T H:

WHEREAS, pursuant to Chapter 5 of Division 7 of Title 1 of the California Government Code (the “Act”), the Owner proposes to issue its Senior Essential Housing Revenue Bonds, Series 2022A- 1 (Vello Valley ) (the “Series 2022A-1 Bonds”), Junior Essential Housing Revenue Bonds, Series 2022A-2 (Vello Valley ) (together with the Series 2022A-1 Bonds , the “Series A Bonds”), and Subordinate Essential Housing Revenue Bonds, Series 2022B (Vello Valley ) (together with the Series A Bonds, the “Bonds”) pursuant to a Trust Indenture, dated as of ________________ 1, 2022 (as supplemented and amended from time to time, the “ Indenture”), between the Owner and the Trustee;
WHEREAS, a portion of the proceeds of the Bonds will be used to provide, in part, financing for the a
cquisition of the multifamily rental housing project known as Vello Valley, located on the real property site described in Exhibit A hereto (as further described herein, the “Project”); WHEREAS, to satisfy the public purposes for which the Bonds are authorized to be issued under the Act, and in furtherance of certain specific public purposes of the Owner, previously approved by the Owner’s Resolution No. 22-_____________, which include supporting, preserving and providing low income, median income and moderate income multifamily rental housing in areas in which demand for such housing is not currently being adequately met, certain limits on the occupancy of units in the Project need to be established and certain other requirements need to be met;
NOW, THEREFORE, in consideration of the issuance of the Bonds by the Owner and the mutual covenants and undertakings set forth herein, and other good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, the Owner and the Trustee hereby agree as follows:

Section 1.

Definitions and Interpretation. Unless the context otherwise requires, the capitalized terms used herein shall have the respective meanings assigned to them in the recitals hereto, in this Section 1, or in the Master Glossary of Terms, dated as of ________________ 1, 2022.
“Administrator” means any administrator or program monitor appointed by the Owner to administer this Regulatory Agreement, and any successor administrator appointed by the Owner. “Area” means the Metropolitan Statistical Area or County, as applicable, in which the Project is located, as defined by HUD.

2 “Bonds” has the meaning given to it in the recitals hereto. “Certificate of Continuing Program Compliance” means the Certificate to be filed by the Owner with the Administrator, pursuant to Section 4(e) hereof, which shall be substantially in the form attached as Exhibit C hereto or in such other comparable form as may be provided by the Owner.
“City” means the City of Lancaster, California.
“Closing Date” means ________________, 2022, the date the Bonds are issued and delivered to the initial purchaser thereof.
“Compliance Period” means the period beginning on the Closing Date and ending on the first date on which there are no Bonds Outstanding.
“County” means the County of Los Angeles, California.
“Deed of Trust” means the Deed of Trust, Assignment of Leases and Rents, Security Agreement, and Fixture Filing dated as of the Closing Date, by the Owner granting a lien on its fee simple interest in the Property, subject to Permitted Encumbrances, to the Trustee for the benefit of the holders from time to time of the Bonds, as the same may be modified, amended or supplemented from time to time, or any deed of trust (or similar security instrument) containing a power of sale clause reflecting a valid, perfected first priority lien on the fee interest in the Project delivered by the Owner to secure the Owner’s obligations to a third-party lender. “Gross Income” means the gross income of a person (together with the gross income of all persons who reside with such person in one residential unit) as calculated in the manner prescribed by Section 8 of the Housing Act.
“Housing Act” means the United States Housing Act of 1937, as amended, or its successor. “HUD” means the United States Department of Housing and Urban Development. “Income Certification” means a Tenant Income Certification and a Tenant Income Certification Questionnaire in the form attached as Exhibit B hereto or in such other comparable form as may be provided by the Owner.
“Low Income Tenant” means a tenant occupying a Low Income Unit. “Low Income Unit” means any available unit if the aggregate Gross Income of all tenants therein does not exceed eighty percent (80%) of median gross income for the Area, with adjustments for family size. The determination of an available unit’s status as a Low Income Unit shall be made by the Owner upon commencement of each lease term with respect to such unit, and annually thereafter, on the basis of an Income Certification executed by each tenant. “Management Agreement” means that certain Property Management Agreement, dated as of the date hereof, by and among the Owner and the Manager. “Manager” means ______________________, and any other Person who is an assignee of the initial Management Agreement.

3 “Median Income Tenant” means a tenant occupying a Median Income Unit. “Median Income Unit” means any available unit if the aggregate Gross Income of all tenants therein does not exceed one hundred percent (100%) of median gross income for the Area, with adjustments for family size. The determination of an available unit’s status as a Median Income Unit shall be made by the Owner upon commencement of each lease term with respect to such unit, and annually thereafter, on the basis of an Income Certification executed by each tenant. “Moderate Income Tenant” means (i) a tenant oc cupying a Moderate Income Unit or (ii) an Over Income Tenant if such tenant occupied an available unit on the effective date of this Regulatory Agreement.
“Moderate Income Unit” means any available unit if the aggregate Gross Income of all tenants therein does not exceed one hundred and twenty percent (120%) of median gross income for the Area, with adjustments for family size. The determination of an available unit’s status as a Moderate Income Unit shall be made by the Owner upon commencement of each leas e term with respect to such unit, and annually thereafter, on the basis of an Income Certification executed by each tenant. “Over Income Tenant” means a tenant occupying an Over Income Unit. “Over Income Unit” means any occupied unit in which the aggregate gross income of all tenants therein exceeds one hundred twenty percent (120%) of median gross income for the Area, with adjustments for family size.
“Project” means the 172-unit multifamily rental housing development to be located in the City on the real property site described in Exhibit A hereto, consisting of those facilities, including real property, structures, buildings, fixtures or equipment situated thereon, as it may at any time exist, the acquisition of which facilities is to be financed, in whol e or in part, from the proceeds of the sale of the Bonds, and any real property, structures, buildings, fixtures or equipment acquired in substitution for, as a renewal or replacement of, or a modification or improvement to, all or any part of the facilities described in the Deed of Trust.
“Regulations” means the Income Tax Regulations of the Department of the Treasury applicable under the Code from time to time.
“Regulatory Agreement” means this Regulatory Agreement and Declaration of Restrictive Covenants, as it may be supplemented and amended from time to time. “Rental Payments” means the rental payments paid by the occupant of a unit, excluding any supplemental rental assistance to the occupant from the State, the federal government, or any other public agency.
“Tax-Exempt” means with respect to interest on any obligations of a state or local government, including the Bonds, that such interest is excluded from gross income for State of California personal income and federal income tax purposes; provided, however, that such interest may be includable as an item of tax preference or otherwise includable directly or indirectly for purposes of calculating other tax liabilities, including any alternative minimum tax or environmental tax, under the Code.
“TCAC” means the California Tax Credit Allocation Committee.

4 “Transfer” means the conveyance, assignment, sale or other disposition of all or any portion of the Project; and shall also include, without limitation to the foregoing, the following: (1) an installment sales agreement wherein Owner agrees to sell the Project or any part thereof for a price to be paid in installments; and (2) an agreement by the Owner leasing all or a substantial part of the Project to one or more persons or entities pursuant to a single or related transactions.

Unless the context clearly requires otherwise, as used in this Regulatory Agreement, words of any gender shall be construed to include each other gender when appropriate and words of the singular number shall be construed to include the plural number, and vice versa, when appropriate.

This Regulatory Agreement and all the terms and provisions hereof shall be construed to effectuate the purposes set forth herein and to sustain the validity hereof.

The titles and headings of the sections of this Regulatory Agreement have been inserted for convenience of reference only and are not to be considered a part hereof and shall not in any way modify or restrict any of the terms or provisions hereof or be considered or given any effect in construing this Regulatory Agreement or any provisions hereof or in ascertaining intent, if any question of intent shall arise.

The parties to this Regulatory Agreement acknowledge that each party and their respective counsel have participated in the drafting and revision of this Regulatory Agreement. Accordingly, the parties agree that any rule of construction to the effect that ambiguities are to be resolved against the drafting party shall not apply in the interpretation of this Regulatory Agreement or any supplement or exhibit hereto.

Section 2. Representations, Covenants and Warranties of the Owner. (a) The Owner hereby incorporates herein, as if set forth in full herein, each of the representations, covenants and warranties of the Owner contained in the Tax Certificate and the Indenture relating to the Project.
(b) The Owner hereby represents and warrants that the Project is located entirely within the City.
(c) The Owner acknowledges, represents and warrants that it understands the nature and structure of the transactions contemplated by this Regulatory Agreement; that it is familiar with the provisions of all of the documents and instruments relating to the Bonds to which it is a party or of which it is a beneficiary; that it understands the financial and legal risks inherent in such transactions.

Section 3.

Residential Rental Project. For the term of this Regulatory Agreement, the Owner hereby represents, covenants, warrants and agrees as follows:
(a) The Project will be owned and operated for the purpose of providing multifamily residential rental property. The Owner will own, and cause the Project to be managed and operated, as a project to provide multifamily residential rental property comprised of a building or structure or several interrelated buildings or structures, together with any functionally related and subordinate facilities, in accordance with such requirements as may be imposed thereby on the Project from time to time. The Owner shall cause the Project to be maintained in a good, habitable and safe (so as to not threaten the health or safety of the Project’s tenants or their invited guests) condition and repair (reasonable wear and tear excepted) and shall create and fund a Capital Expense Fund and shall cause Capital Repairs to be made on an annual basis during the Compliance Period. Capital Repairs

5 shall include, without limitation, the following: carpet and drape replacement; appliance replacement; exterior painting, including exterior trim; hot water heater replacement; plumbing fixtures replacement, including tubs and showers, toilets, lavatories, sinks, faucets; air conditioning and heating replacement; asphalt repair and replacement, and seal coating; roofing repair and replacement; landscape tree replacement; irrigation pipe and controls replacement; sewer line replacement; water line replacement; gas line pipe replacement; lighting fixture replacement; elevator replacement and upgrade work; miscellaneous motors and blowers; common area furniture replacement; and common area and exterior repainting.
(b) Except as otherwise approved by the Owner, all of the dwelling units in the Project (except for the units set aside for resident managers or other administrative uses) will be similarly constructed units, and each dwelling unit in the Project will contain complete separate and distinct facilities for living, sleeping, eating, cooking and sanitation for a single person or a family, including a sleeping area, bathing and sanitation facilities and cooking facilities equipped with a cooking range, refrigerator and sink.
(c) None of the dwelling units in the Project will ever be used as a hotel, motel, dormitory, fraternity house, sorority house, rooming house, nursing home, hospital, sanitarium, rest home or trailer court or park; provided that the use of certain units for tenant guests on an intermittent basis shall not be considered transient use for purposes of this Regulatory Agreement. Owner shall not rent dwelling units for a term of 30 days or less, and shall use commercially reasonable efforts to inform residents that short-term rentals of 30 days or less are prohibited. (d) No part of the Project will at any time during the Compliance Period be owned by a cooperative housing corporation, nor shall the Owner take any steps in connection with a conversion to such ownership or use, and the Owner will not take any steps in connection with a conversion of the Project to condominium ownership during the Compliance Period. (e) All of the available units in the Project will be available for rental during the period beginning on the date hereof and ending on the termination of the Compliance Period on a continuous basis.

Section 4.

Tenants; Income Requirements. The Owner shall comply, or shall cause the Manager to comply, with the following requirements:
(a) During the Compliance Period, except for units occupied by residential managers, for which no income or rent restrictions shall apply, the Owner shall use its best efforts to ensure that the following income restrictions are met at all times:
(i) no less than one-third (1/3rd) of the completed residential units in the Project shall be Low Income Units;
(ii) no less than one-third (1/3rd) of the completed residential units in the Project shall be Median Income Units; and
(iii) the balance of the completed residential units in the Project shall be Moderate Income Units;
provided, that any unit remaining vacant for at least 30 consecutive days may be offered and leased as a Low Income Unit, Median Income Unit or Moderate Income Unit without regard for the requirements set forth in sub-paragraphs (i), (ii) and (iii) above. For the avoidance of doubt, any

6 vacant unit shall only be offered as a Low Income Unit, Median Income Unit or Moderate Income Unit.
(b) No tenant shall be denied continued occupancy of a unit in the Project because, after admission, the aggregate Gross Income of all tenants in the unit occupied by such tenant increases to exceed the qualifying limit for the respective Low Income Unit, Median Income Unit or Moderate Income Unit initially occupied by such tenant. However, if after a tenant’s initial occupancy of a Low Income Unit, Median Income Unit or Moderate Income Unit, as applicable, the aggregate Gross Income of tenants in such unit, as of the most recent determination thereof, exceeds that which is defined for such unit occupied by the same number of tenants, the next available unit of comparable or smaller size shall, subject to the discretion of the Owner and Manager as described in the next succeeding paragraph, be rented (or held vacant and available for immediate occupancy) in a manner that would maintain the unit mix required by Section 4(a) hereof. For the avoidance of doubt, this Section 4(b) shall apply to existing tenants occupying the Project on the Closing Date.

Notwithstanding any provision of this Regulatory Agreement to the contrary, the Owner shall verify, or cause the Manager to verify, all tenant incomes at least annually and shall continually re- balance the mix of household incomes by leasing vacant units to Low Income Tenants, Median Income Tenants or Moderate Income Tenants as needed to meet the income set-aside requirements set forth in this Section 4(a).
(c) For the Compliance Period, the Owner shall cause the Manager to obtain, complete and maintain on file Income Certifications for each tenant, including (i) an Income Certification dated immediately prior to the initial occupancy of such tenant in the unit and a second Income Certification dated one year after the tenant’s initial move-in date, and (ii) thereafter, an annual verifiable self- certification with respect to each tenant. The Owner shall, or shall cause the Manager to, provide such additional information as may be required in the future by applicable rules, rulings, policies, procedures, Regulations or other official statements now or hereafter promulgated, proposed or made by the Department of the Treasury or the Internal Revenue Service with respect to Tax-Exempt obligations. Upon request of the Administrator or the Trustee, copies of Income Certifications for tenants commencing or continuing occupation of a residential unit shall be submitted to the Administrator or the Trustee, as requested.
(d) The Owner shall cause the Manager to verify that the income information provided by an applicant in an Income Certification is accurate by taking one or more of the following steps as a part of the verification process: (1) obtain pay stubs for the three most recent pay periods, (2) obtain an income tax return for the most recent tax year, (3) obtain a credit report or conduct a similar type credit search, (4) obtain an income verification from the applicant’s current employer, (5) obtain an income verification from the Social Security Administration and/or the California Department of Social Services if the applicant receives assistance from either of such agencies, or (6) if the applicant is unemployed and does not have an income tax return, obtain another form of independent verification reasonably acceptable to the Owner.
(e) The Owner shall prepare and submit or cause the Manager to prepare and submit to the Administrator not less than annually, commencing not less than one year after the Closing Date, a Certificate of Continuing Program Compliance executed by the Owner in substantially the form attached hereto as Exhibit C.
(f) For the Compliance Period, all tenant leases or rental agreements shall be subordinate to this Regulatory Agreement and the Deed of Trust. All leases shall contain clauses, among others, wherein each tenant: (i) certifies the accuracy of the statements made by such tenant

7 in the Income Certification; (ii) agrees that the family income and other eligibility requirements shall be deemed substantial and material obligations of the tenancy of such tenant, that such tenant will comply promptly with all requests for information with respect thereto from the Owner or the Administrator on behalf of the Owner, and that the failure to provide accurate information in the Income Certification or self-certification or refusal to comply with a request for information with respect thereto shall be deemed a violation of a substantial obligation of the tenancy of such tenant; (iii) acknowledges that the Owner has relied on the statements made by such tenant in the Income Certification and supporting information supplied by the tenant in determining qualification for occupancy of a Low Income Unit, Median Income Unit or Moderate Income Unit, as applicable, and that any material misstatement in such certification (whether or not intentional) will be cause for immediate termination of such lease or rental agreement; and (iv) agrees that the tenant’s income is subject to annual certification in accordance with Section 4(c) and that if upon any such certification the aggregate Gross Income of tenants in such unit exceeds the applicable income limit under Section 4(b), the unit occupied by such tenant may cease to qualify as a Low Income Unit, Median Income Unit or Moderate Income Unit, as applicable, and such unit’s rent may be subject to increase. (g) In reviewing and considering applications from prospective tenants, the Owner shall provide a preference to households which include one or more persons who live, work, or have been hired to work in the City, have graduated from a City high school, are employed by a public school district in the City, and/or are employed as a first responder.

Section 5.

Affordable Rental Requirements; Limitations on Rent Increases; Rent Reductions. During the Compliance Period, except for units occupied by residential managers, for which no income or rent restrictions shall apply, in addition to the other requirements set forth herein, the Owner hereby agrees that it shall comply, or cause the Manager to comply, with the following:
(a) The Rental Payments for the Low Income Units paid by the tenants thereof shall not exceed 35% of the Low Income limit for the County, adjusted for household size, as published annually by HUD and utilized by TCAC.
(b) The Rental Payments for the Median Income Units paid by the tenants thereof shall not exceed 35% of the Median Income limit for the County, adjusted for household size, as published annually by HUD and utilized by TCAC.
(c) The Rental Payments for the Moderate Income Units paid by the tenants thereof shall not exceed 35% of the Moderate Income limit for the County, adjusted for household size, as published annually by HUD and utilized by TCAC.
(d) The Owner shall accept as tenants, on the same basis as all other prospective tenants, qualified low-income persons who are recipients of federal certificates or vouchers for rent subsidies pursuant to the existing program under Section 8 of the Housing Act.

For purposes of this Section 5, base rents shall be adjusted for household size using the following assumptions:

Unit Size Assumed Occupancy
two-bedroom 3
three-bedroom 4
(e) The following limitations shall apply to annual rent increases for households occupying available units in the Project:

8 (i) For a household qualifying as a Low Income Unit, a Median Income Unit, or a Moderate Income Unit, as applicable, but for which annual rent payable is lower than the applicable limit set forth in paragraph (a), (b) or (c) above, respectively, rent shall not be increased more than 4% annually and then only up to the applicable limit set forth in such paragraphs above. (ii) For a household qualifying as a Low Income Unit, a Median Income Unit, or a Moderate Income Unit, as applicable, but for which annual rent payable exceeds the applicable limit set forth in paragraph (a), (b) or (c) above, respectively, rent shall be decreased as soon as practicable to the applicable limit set forth in such paragraphs above.

Except as set forth in Section 13 hereof, the covenants and conditions of this Regulatory Agreement shall be binding upon successors in interest of the Owner.

Section 6.

Tax-Exempt Status of Bonds . The Owner hereby represents, warrants and agrees as follows:
(a) The Owner will not knowingly take or permit, or omit to take or cause to be taken, as is appropriate, any action that would adversely affect the Tax -Exempt nature of the interest on the Bonds and, if it should take or permit, or omit to take or cause to be taken, any such action, it will take all lawful actions necessary to rescind or correct such actions or omissions promptly upon obtaining knowledge thereof.
(b) The Owner will file of record such documents and take such other steps as are necessary, in the written opinion of Bond Counsel filed with the Owner, in order to ensure that the requirements and restrictions of this Regulatory Agreement will be binding upon all owners of the Project, including, but not limited to, the execution and recordation of this Regulatory Agreement in the real property records of the County.

Section 7.

Requirements of the Owner. In addition to other requirements set forth herein and to the extent not prohibited by the requirements set forth in Sections 4 through 6 hereof, the Owner hereby agrees to comply with each of the requirements set forth in this Section 7, as follows:
(a) All tenant lists, applications and waiting lists relating to the Project shall at all times be kept separate and identifiable from any other business of the Owner and shall be maintained in a reasonable condition for proper audit.
(b) The Owner shall appoint the Administrator to administer this Regulatory Agreement and to monitor performance by the Owner of the terms, provisions and requirements hereof. In the event that the Administrator resigns or is terminated, the Owner shall, following consultation with the City, appoint a successor Administrator, experienced and capable, in the judgment of the Owner, of performing the duties under the Project Administration Agreement. The Owner shall comply with any reasonable request made by the Administrator to deliver to any such Administrator any reports, notices or other documents required to be delivered pursuant hereto, and to make the Project and the books and records with respect thereto available for inspection by the Administrator. The fees and expenses of the Administrator shall be paid by the Owner.

Section 8.

Modification of Covenants . The Owner and the Trustee hereby agree as follows:
(a) To the extent any amendments to the Act, the Regulations or the Code shall, in the written opinion of Bond Counsel filed with the Trustee and the Owner, retroactively impose

9 requirements upon the ownership or operation of the Project more restrictive than those imposed by this Regulatory Agreement, and if such requirements are applicable to the Project and compliance therewith is necessary to maintain the validity of, or the Tax-Exempt status of interest on the Bonds, this Regulatory Agreement shall be deemed to be automatically amended to impose such additional or more restrictive requirements.
(b) The Owner and the Trustee shall execute, deliver and, if applicable, file of record any and all documents and instruments necessary to effectuate the intent of this Section 8.

Section 9. Indemnification. The Owner and the Trustee will be indemnified as required by and pursuant to the Project Administration Agreement.

Section 10. Consideration. The Owner has agreed to issue the Bonds and to use the proceeds thereof to, among other things, finance the acquisition of the Project. In furtherance of the significant public benefits of the Project, the Owner has entered into this Regulatory Agreement and has agreed to restrict the uses to which this Project can be put on the terms and conditions set forth herein.

Section 11. Reliance. The Owner and the Trustee hereby recognize and agree that the representations and covenants set forth herein may be relied upon by all persons, including but not limited to the Administrator, interested in the legality and validity of the Bonds, in the exemption from California personal income taxation of interest on the Bonds and in the Tax -Exempt status of the interest on the Bonds. In performing their duties and obligations hereunder, the Owner and the Administrator may rely upon statements and certificates of the tenants, and upon audits of the books and records of the Owner pertaining to the Project. In addition, the Owner may consult with counsel, and the opinion of such counsel shall be full and complete authorization and protection in respect of any action taken or suffered by the Owner hereunder in good faith and in conformity with such opinion.

Section 12. Transfer of the Project. For the Compliance Period, except as permitted by the Indenture or the Public Benefit Agreement, the Owner shall not Transfer the Project, in whole or in part, unless the following conditions are satisfied: (A) the receipt by the Owner and the Trustee of evidence acceptable to the Owner and the Trustee that (1) the Owner shall not be in default hereunder, if in effect (which may be evidenced by a Certificate of Continuing Program Compliance), or the transferee reasonably undertakes to cure any defaults of the Owner; (2) the continued operation of the Project shall comply with the provisions of this Regulatory Agreement; (3) all rights, responsibilities and duties of the transferor under the Project Administration Agreement shall have been assigned to the transferee, or the transferee shall enter into a new project administration agreement in the form of the current Project Administration Agreement; and (4) the person or entity that is to acquire the Project does not have pending against it, and does not have a history of significant and material building code violations or complaints concerning the maintenance, upkeep, operation, and regulatory agreement compliance of any of its projects as identified by any local, state or federal regulatory agencies; (B) the execution by the transferee of any document reasonably requested by the Owner with respect to the assumption of the Owner’s obligations under this Regulatory Agreement, including without limitation an instrument of assumption hereof and thereof, and delivery to the Owner of an opinion of such transferee’s counsel to the effect that each such document and this Regulatory Agreement are valid, binding and enforceable obligations of such transferee, subject to bankruptcy and other standard limitations affecting creditor’s rights; (C) receipt by the Owner of an opinion of Bond Counsel to the effect that any such Transfer will not adversely affect the Tax -Exempt status of interest on the Bonds; (D) receipt by the Owner of all fees and/or expenses then currently due and payable to the Owner.

10 It is hereby expressly stipulated and agreed that any Transfer of the Project in violation of this Section 12 shall be null, void and without effect, shall cause a reversion of title to the Owner, and shall be ineffective to relieve the Owner of its obligations under this Regulatory Agreement.

Nothing in this Section shall affect any provision of any other document or instrument between the Owner and any other party which requires the Owner to satisfy certain conditions or obtain the prior written consent of such other party in order to Transfer the Project. Upon any Transfer that complies with this Regulatory Agreement, the Owner shall be fully released from its obligations hereunder to the extent such obligations have been fully assumed in writing by the transferee of the Project.

The foregoing notwithstanding, the Project may be transferred pursuant to a foreclosure, exercise of power of sale or deed in lieu of foreclosure or comparable conversion under the Deed of Trust without the consent of the Owner or compliance with the provisions of this Section 12.

For the Compliance Period, the Owner shall not: (1) encumber any of the Project or grant commercial leases of any part thereof, or permit the conveyance, transfer or encumbrance of any part of the Project, except for (A) encumbrances permitted under the Deed of Trust, or (B) a Transfer in accordance with the terms of this Regulatory Agreement, in each case upon receipt by the Owner of an opinion of Bond Counsel to the effect that such action will not adversely affect the Tax-Exempt status of interest on the Bonds (provided that such opinion will not be required with respect to any encumbrance, lease or transfer relating to a commercial operation or ancillary facility that will be available for tenant use and is customary to the operation of multifamily housing developments similar to the Project); (2) demolish any part of the Project or substantially subtract from any real or personal property of the Project, except to the extent that what is demolished or removed is replaced with comparable property or such demolition or removal is otherwise permitted by the Deed of Trust; or (3) permit the use of the dwelling accommodations of the Project for any purpose except rental residences.

Section 13.

Term. This Regulatory Agreement and all and several of the terms hereof shall become effective upon its execution and delivery, and shall remain in full force and effect for the period provided herein and shall terminate as to any provision not otherwise provided with a specific termination date and shall terminate in its entirety at the end of the Compliance Period.

The terms of this Regulatory Agreement to the contrary notwithstanding, the requirements of thi
s Regulatory Agreement shall terminate and be of no further force and effect in the event of involuntary noncompliance with the provisions of this Regulatory Agreement caused by fire or other casualty, seizure, requisition, foreclosure or transfer of title by deed in lieu of foreclosure, change in a federal law or an action of a federal agency after the Closing Date, which prevents the Owner from enforcing such provisions, or condemnation or a similar event, but only if, within a reasonable period, either the Bonds are retired or amounts received as a consequence of such event are used to provide a project that meets the requirements hereof; provided, however, that the preceding provisions of this sentence shall cease to apply and the restrictions contained herein shall be reinstated if, at any time subsequent to the termination of such provisions as the result of the foreclosure or the delivery of a deed in lieu of foreclosure or a similar event, the Owner or any related person (within the meaning of Section 1.103-10(e) of the Regulations) obtains an ownership interest in the Project for federal income tax purposes. The Owner hereby agrees that, following any foreclosure, transfer of title by deed in lieu of foreclosure or similar event, neither the Owner nor any such related person as described above will obtain an ownership interest in the Project for federal tax purposes.

Notwithstanding any other provision of this Regulatory Agreement, this Regulatory Agreement may be terminated upon agreement by the Trustee and the Owner, upon receipt by the Owner of an opinion of Bond Counsel to the effect that such termination will not adversely affect the

11 exclusion from gross income of interest on the Bonds for federal income tax purposes. Upon the termination of the terms of this Regulatory Agreement, the parties hereto agree to execute, deliver and record appropriate instruments of release and discharge of the terms hereof; provided, however, that the execution and delivery of such instruments shall not be necessary or a prerequisite to the termination of this Regulatory Agreement in accordance with its terms.

Section 14.

Covenants to Run With the Land. Notwithstanding Section 1461 of the California Civil Code, the Owner hereby subjects the Project to the covenants, reservations and restrictions set forth in this Regulatory Agreement. The Trustee and the Owner hereby declare their express intent that the covenants, reservations and restrictions set forth herein shall be deemed covenants running with the land and shall pass to and be binding upon the Owner’s successors in title to the Project; provided, however, that on the termination of this Regulatory Agreement said covenants, reservations and restrictions shall expire. Each and every contract, deed or other instrument hereafter executed covering or conveying the Project or any portion thereof shall conclusively be held to have been executed, delivered and accepted subject to such covenants, reservations and restrictions, regardless of whether such covenants, reservations and restrictions are set forth in such contract, deed or other instruments.

Section 15. Burden and Benefit. The Trustee and the Owner hereby declare their understanding and intent that the burdens of the covenants set forth herein touch and concern the land in that the Owner’s legal interest in the Project is rendered less valuable thereby. Nothing in this Regulatory Agreement expressed or implied is intended or shall be construed to confer upon, or to give to, any person other than the Owner and the Trustee (acting exclusively on behalf of Bondholders) any right, remedy or claim under or by reason of this Regulatory Agreement or any covenant, reservation or restriction hereof, which shall be for the sole and exclusive benefit of the Owner and the Trustee (acting exclusively on behalf of Bondholders). For purposes of clarity, there are no third party beneficiaries.

Section 16. Uniformity; Common Plan. The covenants, reservations and restrictions hereof shall apply uniformly to the entire Project in order to establish and carry out a common plan for the use of the site on which the Project is located.

Section 17. Default; Enforcement. If the Owner defaults in the performance or observance of any covenant, agreement or obligation of the Owner set forth in this Regulatory Agreement, and if such default remains uncured for a period of 60 days after notice thereof shall have been given by the Manager, the Controlling Party or the Trustee to the Owner, or for a period of 60 days from the date the Owner should, with reasonable diligence, have discovered such default, then the Trustee shall declare an “Event of Default” to have occurred hereunder; provided, however, that if the default is of such a nature that it cannot be corrected within 60 days, such default shall not constitute an Event of Default hereunder so long as (i) the Owner institutes corrective action within said 60 days and diligently pursues such action until the default is corrected, and (ii) in the opinion of Bond Counsel, the failure to cure said default within 60 days will not adversely affect the Tax-Exempt status of interest on the Bonds.

Following the declaration of an Event of Default hereunder, the Owner shall have the right, in its sole and absolute discretion, to replace the Manager and terminate the Property Management Agreement in accordance with its terms, and the Trustee, subject to the terms of the Indenture, may take any one or more of the following steps, in addition to all other remedies provided by law or equity:

12 (a) by mandamus or other suit, action or proceeding at law or in equity, including injunctive relief, require the Owner to perform its obligations and covenants hereunder or enjoin any acts or things that may be unlawful or in violation of the rights of the Trustee hereunder; (b) have access to and inspect, examine and make copies of all of the books and records of the Owner pertaining to the Project; and
(c) take such other action at law or in equity as may appear necessary or desirable to enforce the obligations, covenants and agreements of the Owner hereunder.

The Owner hereby agrees that specific enforcement of the Owner’s agreements contained herein is the only means by which the Trustee may fully obtain the benefits of this Regulatory Agreement made by the Owner herein, and the Owner therefore agrees to the imposition of the remedy of specific performance against it in the case of any Event of Default by the Owner hereunder.

The Trustee and the Owner hereby agree that cure of any Event of Default made or tendered by the Manager shall be deemed to be a cure by the Owner and shall be accepted or rejected on the same basis as if made or tendered by the Owner.

Section 18. [ Reserved].

Section 19. Recording and Filing. (a) The Owner shall cause this Regulatory Agreement and all amendments and supplements hereto and thereto, to be recorded and filed in the real property records of the County, and in such other places as the Owner may reasonably deem necessary. The Owner shall pay all fees and charges incurred in connection with any such recording. (b) The Owner and the Trustee will file of record such other documents and take such other steps as are reasonably necessary, in the opinion of Bond Counsel, in order to ensure that the requirements and restrictions of this Regulatory Agreement will be binding upon all owners of the Project.
(c) The Owner hereby covenants to include or reference the requirements and restrictions contained in this Regulatory Agreement in any documents transferring any interest in the Project to another person to the end that such transferee has notice of, and is bound by, such restrictions, and, except in the case of a foreclosure or comparable involuntary conversion of the Deed of Trust, whereby the Trustee becomes the owner of the Project, to obtain the agreement from any transferee to abide by all requirements and restrictions of this Regulatory Agreement.

Section 20. [Reserved].

Section 21. Governing Law; Venue . This Regulatory Agreement shall be construed in accordance with and governed by the laws of the State of California applicable to contracts made and performed in the State of California. This Regulatory Agreement shall be enforceable in the State of California, and any action arising hereunder shall (unless waived by the Owner in writing) be filed and maintained in the Superior Court of California, County of San Diego.

Section 22. Amendments; Waivers . Except as provided in Sections 8(a) hereof, this Regulatory Agreement may be amended only by a written instrument executed by the parties hereto or their successors in title, and duly recorded in the real property records of the County, California, and only upon (i) receipt by the Owner of an opinion from Bond Counsel that such amendment will

13 not adversely affect the Tax -Exempt status of interest on the Bonds and (ii) the written consent of the Controlling Party, who shall receive a copy of any such amendment. (a) Anything to the contrary contained herein notwithstanding, the Trustee and the Owner hereby agree to amend this Regulatory Agreement to the extent required, in the opinion of Bond Counsel, in order that interest on the Bonds remains Tax-Exempt. The parties requesting such amendment shall notify the other parties to this Regulatory Agreement of the proposed amendment, with a copy of such proposed amendment to Bond Counsel and a request that Bond Counsel render to the Owner an opinion as to the effect of such proposed amendment upon the Tax -Exempt status of interest on the Bonds. This provision shall not be subject to any provision of any other agreement requiring any party hereto to obtain the consent of any other person in order to amend this Regulatory Agreement.
(b) Any waiver of, or consent to, any condition under this Regulatory Agreement must be expressly made in writing.

Section 23.

Notices. Any notice required to be given hereunder shall be made in writing and shall be given by personal delivery, overnight delivery, certified or registered mail, postage prepaid, return receipt requested, or by telecopy, in each case at the respective addresses specified in the Indenture, or at such other addresses as may be specified in writing by the parties hereto.

Unless otherwise specified by the Administrator, the address of the Administrator is:

To Owner: CMFA Special Finance Agency
2111 Palomar Airport Road, Suite 320
Carlsbad, California 92011
Attention: Financial Advisor
Email: [email protected]

With a copy to: Ascenda Capital LLC
9242 Beverly Blvd, Suite 300
Beverly Hills, California 90210
Attention: Matthew Avital

The Administrator and the Owner may, by notice given hereunder, designate any further or different addresses to which subsequent notices, certificates or other communications shall be sent.

Notice shall be deemed given on the date evidenced by the postal or courier receipt or other written evidence of delivery or electronic transmission; provided that any telecopy or other electronic transmission received by any party after 4:00 p.m., local time of the receiving party, as evidenced by the time shown on such transmission, shall be deemed to have been received the following Business Day.

Section 24.

Severability. If any provision of this Regulatory Agreement shall be invalid, illegal or unenforceable, the validity, legality and enforceability of the remaining portions hereof shall not in any way be affected or impaired thereby.

Section 25. Multiple Counterparts . This Regulatory Agreement may be simultaneously executed in multiple counterparts, all of which shall constitute one and the same instrument, and each of which shall be deemed to be an original.

Section 26. Limitation on Liability. Notwithstanding the foregoing or any other provision or obligation to the contrary contained in this Regulatory Agreement, the liability of the Owner under

14 this Regulatory Agreement to any person or entity, including, but not limited to, the Trustee or the Controlling Party and their successors and assigns, is limited to moneys available therefor under and in accordance with the Indenture.

Section 27. Annual Reporting Covenant.

No later than January 31 of each calendar year
(commencing January 31, 2024), the Owner agrees to provide to the California Debt and Investment Advisory Commission, by any method approved by the California Debt and Investment Advisory Commission, the annual report information required by Section 8855(k)(1) of the California Government Code. This covenant shall remain in effect until the later of the date (i) the Bonds are no longer outstanding or (ii) the proceeds of the Bonds have been fully spent.

[Signature Page – Regulatory Agreement and Declaration of Restrictive Covenants – Vello Valley]

IN WITNESS WHEREOF, the Owner and the Trustee have executed this Regulatory Agreement by duly authorized representatives, all as of the date first above written.

CMFA SPECIAL FINANCE AGENCY

By:

Name: Edward J. Becker
Title: Executive Director

[Signature Page – Regulatory Agreement and Declaration of Restrictive Covenants – Vello Valley]

WILMINGTON TRUST, NATIONAL ASSOCIATION,
as Trustee

By:

Name:

Title:

CALIFORNIA ALL-PURPOSE ACKNOWLEDGMENT
A notary public or other officer completing this certificate verifies only the identity of the individual who signed the document to which this certificate is attached, and not the truthfulness, accuracy, or validity of that document.

STATE OF CALIFORNIA )
)
COUNTY OF _____________ )

On ___________________ before me, ____________________, Notary Public, Personally appeared ___________________________
who proved to me on the basis of satisfactory evidence to be the person(s) whose name(s) is/are subscribed to the within instrument and acknowledged to me that he/she/they executed the same in his/her/their authorized capacity(ies), and that by his/her/their signature(s) on the instrument the person(s), or the entity upon behalf of which the person(s) acted, executed the instrument.

I certify under PENALTY OF PERJURY under the laws of the State of California that the foregoing paragraph is true and correct.

WITNESS my hand and official seal.

Signature of Notary Public

STATE OF CALIFORNIA )
)
COUNTY OF _____________ )

I certify under PENALTY OF PERJURY under the laws of the State of California that the foregoing paragraph is true and correct.

WITNESS my hand and official seal.

Signature of Notary Public

A-1

EXHIBIT A

DESCRIPTION OF REAL PROPERTY
[TO COME]

B-1

EXHIBIT B

FORM OF INCOME CERTIFICATION
Effective Date:

Move-In Date:

Household Size:

Floorplan:

Unit:

HOUSEHOLD COMPOSITION
Household Member Name Relationship Birthdate
1 Head
2 3
4 5
6 7

INCOME COMPOSITION (ANNUAL)
Household
Member
Employment /
Wages
Social Security /
Pension
Public
Assistance
Other
Income
1 2
3 4
5 6
7 TOTALS $ $ $ $
TOTAL INCOME $

C-1

EXHIBIT C

FORM OF CERTIFICATE OF CONTINUING PROGRAM COMPLIANCE
Witnesseth that on this day of _____________, 20__, the undersigned, on behalf of the CMFA SPECIAL FINANCE AGENCY (the “Owner”), does hereby certify with respect to the multifamily rental housing development (the “Project”) that:

1. During the preceding year (i) such Project was substantially and continually in compliance with the Regulatory Agreement and (ii ) ____% of the units in the Project were occupied by Low Income Tenants, ___% of the units in the Project were occupied by Median Income Tenants ____% of the units in the Project were occupied by Moderate Income Tenants.

Set forth below are the unit numbers of Low Income Tenants, Median Income Tenants and Moderate Income Tenants who commenced or terminated occupancy during the preceding month.

Commenced Occupancy Terminated Occupancy
1 1.

2. 2.

3. 3.

4. 4.

5. 5.

6. 6.

7. 7.

8. 8.

9. 9.

10. 10.

11. 11.

12. 12.

13. 13.

14. 14.

15. 15.

16. 16.

17. 17.

18. 18.

19. 19.

20. 20.

Additional units that have commenced or terminated occupancy may be found in an additional attached sheet

2. The units occupied by Low Income Tenants, Median Income Tenants and Moderate Income Tenants are of similar size and quality to other units and are dispersed throughout the Project. Attached is a separate sheet listing the number of each unit and indicating which units are occupied by Low Income Tenants, Median Income Tenants and Moderate Income Tenants, the size, the number of bedrooms of such units and the number of Low Income Tenants, Median Income Tenants and Moderate Income Tenants who commenced occupancy of units during the preceding month.

C-2

The representations set forth herein are true and correct to the best of the undersigned’s knowledge and belief.

Date: Owner:
[JH Draft 8-19-22]

RECORDING REQUESTED
AND WHEN RECORDED MAIL TO:

475 Sansome Street, Suite 1700
San Francisco, California 94111
Attention: Josh D. Anzel

THIS SPACE IS FOR RECORDERS USE ONLY

PUBLIC BENEFIT AGREEMENT
(Title of Document)
Per Government Code 27388.1 (a)(1) “A fee of $75 dollars shall be paid at the time of recording of every real estate instrument, paper, or notice required or permitted by law to be recorded, except those expressly exempted from payment of recording fees, per each single transaction per parcel or real property. The fee shall not exceed two hundred twenty-five dollars ($225)” Reason for Exemption:
☐ Exempt from fee per GC 27388.1 (a) (2); recorded concurrently “in connection with” a transfer subject to the imposition of documentary transfer tax (DTT). ☐ Exempt from fee per GC 27388.1 (a) (2); recorded concurrently “in connection with” a transfer of real property that is a residential dwelling to an owner-occupier. ☒ Exempt from fee per GC 27388.1 (a) (2) (D); recording fee exempt under GC 27383. ☐ Exempt from fee per GC 27388.1 (a) (1); fee cap of $225.00 reached. ☐ Exempt from the fee per GC 27388.1 (a) (1); not related to real property.

Failure to include an exemption reason will result in the imposition of the $75.00 Building Homes and Job Act Fee.

RECORDING REQUESTED BY
CMFA Special Finance Agency

WHEN RECORDED RETURN TO:

Jones Hall, A Professional Law Corporation
475 Sansome Street, Suite 1700
San Francisco, California 94111
Attention: Josh D. Anzel

THIS DOCUMENT IS EXEMPT FROM RECORDING FEES PURSUANT TO SECTION 27383

OF THE CALIFORNIA GOVERNMENT CODE

PUBLIC BENEFIT AGREEMENT

By and Between

CMFA SPECIAL FINANCE AGENCY

and

CITY OF LANCASTER

_________________________

Dated as of ________________ 1, 2022

_________________________

Relating to

CMFA SPECIAL FINANCE AGENCY
SENIOR ESSENTIAL HOUSING REVENUE BONDS, SERIES 2022A-1
(VELLO VALLEY)

CMFA SPECIAL FINANCE AGENCY
JUNIOR ESSENTIAL HOUSING REVENUE BONDS, SERIES 2022A-2
(VELLO VALLEY)

and

CMFA SPECIAL FINANCE AGENCY
SUBORDINATE ESSENTIAL HOUSING REVENUE BONDS, SERIES 2022B (VELLO VALLEY)

1 PUBLIC BENEFIT AGREEMENT
This PUBLIC BENEFIT AGREEMENT (“Agreement ”) is dated as of ________________ 1, 2022, by and between the CMFA SPECIAL FINANCE AGENCY, a joint exercise of powers agency organized and existing under the laws of the State of California (including its successors and assigns, “Own er”), and the CITY OF LANCASTER , a California municipal corporation and charter city (“Host”).

BACKGROUND
WHEREAS, the Owner proposes to issue Bonds (as hereinafter defined) to finance Owner’s acquisition of the certain multifamily rental housing projects (collectively, the “Project”) located at 43808 Vintage Street in the City of Lancaster, California, located on the real property site described in Exhibit A hereto; and
WHEREAS, the Owner has executed a Regulatory Agreement and Declaration of Restrictive Covenants between Owner and Wilmington Trust, National Association, dated concurrently and recorded in the official records of the County of Los Angeles , California (the “County”), which imposes requirements upon the Project with respect to maximum income levels of tenants, maximum rents payable by tenants, maintenance of the Project in accordance with industry standards, and certain other matters, and Host is entering into this Agreement in reliance on Owner’s compliance with such requirements; and
WHEREAS, the Owner intends to sell the Project at the instigation of the Host or upon the retirement of all Project Debt (as defined herein) pursuant to this Agreement.

AGREEMENT
In consideration of the mutual covenants herein contained, and such other good and valuable consideration the receipt and sufficiency of which is hereby acknowledged, Owner and Host mutually agree as follows:

Section 1. Right to Cause Sale. Host shall have the right to cause (“ Sale Right”) the Owner to sell the Property (as herein defined) to Host or Host’s designee upon payment by the Purchaser (as herein defined) of the Sale Price (as herein provided) within the Sale Right Term (as herein defined) and in compliance with and observance of all of the terms and conditions of this Agreement.

Section 2.

Definitions. Capitalized terms used in this Agreement shall have the meanings assigned to them in this Section 2; capitalized terms used in this Agreement and not defined in this Section 2 or elsewhere herein shall have the meanings assigned to them in the Indenture (herein defined).
(a) “
Bonds” – collectively, (i) the CMFA Special Finance Agency Senior Essential Housing Revenue Bonds, Series 2022A-1 (Vello Valley), (ii) the CMFA Special Finance Agency Junior Essential Housing Revenue Bonds, Series 2022A-2 (Vello Valley ), and ( iii) the CMFA Special Finance Agency Subordinate Essential Housing Revenue Bonds, Series 2022B (Vello Valley) (the “Series B Bonds”), with such other series and sub-series designations as may be set forth in the Indenture, originally issued to finance Owner’s acquisition of the Project and related transaction costs. The original principal amount of the Series B Bonds shall not exceed $5,000,000.

2 (b) “Bond Trustee” – Wilmington Trust, National Association, or any successor trustee under the Indenture.
(c) “ Closing” – shall have the meaning set forth in Section 8 hereof. (d) “Conveyance” – that transaction or series of transactions by which Owner shall transfer, bargain, sell and convey any and all right, title or interest in and to the Property pursuant to this Agreement.
(e) “ Exercise Notice” – shall have the meaning set forth in Section 4(a) hereof. (f) “Extraordinary Costs and Expenses ” – shall have the meaning set forth in the Indenture.
(g) “ Host Indemnified Person” – the Host and each of its officers, governing members, directors, officials, employees, attorneys, agents and members. (h) “ Indenture” – the Trust Indenture between Owner, as issuer, and the Bond Trustee, as trustee, pursuant to which the Bonds were issued. (i) “ Minimum Sale Price” – means the lowest price at which the Property may be sold, as described in Section 4(c) hereof.
(j) “ Outstanding” – with respect to Bonds, as of any given date, all Bonds which have been authenticated and delivered by the Trustee under the Indenture, except: (i) Bonds cancelled at or prior to such date or delivered to or acquired by the Trustee at or prior to such date for cancellation; (ii) Bonds deemed to be paid in accordance with Article IX of the Indenture; and (iii) Bonds in lieu of which other Bonds have been authenticated under the Indenture. (k) “ Owner Indemnified Person” – the Owner and each of its officers, governing members, directors, officials, employees, attorneys, agents and members. (l) “ Project Administrator” – Ascenda Capital LLC, or an affiliate thereof, and its successors and assigns.
(m) “ Project Debt” – any debt secured by the Project and incurred to finance or refinance Owner’s acquisition of the Project and related transaction costs, including any portion of the Bonds and any bonds, notes or other indebtedness issued by Owner to improve the Project or to refund the Bonds in whole or in part.
(n) “
Property” – means all of Owner’s right, title and interest (which includes fee simple title to the real property) in and to all property and assets used in or otherwise related to the operation of the Project including, without limitation, all real property and interests in real property, all tangible and intangible personal property including furniture, fixtures, equipment, supplies, intellectual property, licenses, permits, approvals, and contractual rights of any kind or nature together with the right to own and carry on the business and operations of the Project. (o) “
Purchaser” – means the purchaser of the Property in a sale thereof. (p) “Regulatory Agreement” – means the Regulatory Agreement and Declaration of Restrictive Covenants by and between the Owner and the Bond Trustee, relating to the Bonds.

3 (q) “Sale Price ” – purchase price of the Property to be paid by the Purchaser upon sale of the Property by the Owner pursuant to the Sale Right in compliance with Section 4 hereof or sale by the Owner pursuant to Section 5 hereof.
(r) “ Sale Right” – means the right of the Host to cause the Owner to sell the Property pursuant to Section 1 hereof.
(s) “ Sale Right Exercise Date” – the date fifteen (15) years from the issuance of the Bonds.
(t) “ Sale Right Term” – shall commence on the Sale Right Exercise Date and, if not exercised, shall terminate at 11:59 p.m. local time on the date that is the earlier of: (i) fourteen (14) years from the Sale Right Exercise Date or (ii) the date on which no Project Debt remains Outstanding.
(u) “ Transaction Costs” – to the extent not otherwise described herein, any costs or expenses of any kind or nature associated with or incurred by Owner and Bond Trustee in connection with the consummation of the Conveyance, regardless of whether such costs and expenses are customarily borne by the seller or purchaser in any such transaction, including but not limited to taxes, recording fees and other impositions, Owner’s and Bond Trustee’s legal and other professional fees, fees for verification agents, bidding agents, escrow agents, custodians or trustees, assumption fees, prepayment fees, the cost of the appraisal, brokers’ fees and expenses, surveys, inspections, title commitments, title insurance premiums and other title- related fees, and all amounts required for indemnification of Owner , Trustee and Project Administrator.

Section 3.

Effectiveness; Term and Termination. The Sale Right shall become effective on the Sale Right Exercise Date and may be exercised during the Sale Right Term.

Owner agrees that it will not enter into any agreement to sell all or any part of the Property during the Sale Right Term other than as may be required by the Indenture (e.g., in the event of default), without the specific written request of the Host and delivery of an Opinion of Bond Counsel to the Owner substantially to the effect that such sale will not, in and of itself, adversely affect the exclusion of interest on the Bonds from gross income for purposes of federal income taxation.

Section 4.

Exercise of Sale Right.
(a) Host’s Notice. To exercise the Sale Right, Host shall provide a notice (an “Exercise Notice”) to Owner (with a copy to the Project Administrator) at any time during the Sale Right Term.
(b) O wner’s Best Efforts to Sell. Unless Host notifies Owner in writing that it is withdrawing its Exercise Notice within fifteen (15) business days of delivering the Exercise Notice under Section 4(a) hereof, Owner shall exercise its best efforts to enter into a purchase agreement for the sale of the Property in accordance with Section 7(d) and to sell and convey good and marketable title to the Property to Host or its designee within ninety (90) days following receipt of the Exercise Notice, or as soon as possible thereafter, in accordance with the purchase agreement, but only if it can sell at or above the Minimum Sale Price. The obligation of the Owner to enter into the purchase agreement for the sale and conveyance of the Property to Host or its designee shall be on a best efforts basis. The Owner shall endeavor to sell the Property at a commercially reasonable price, subject to subsection (c) of this Section, by such means as it shall determine to be suitable for such purpose; provided that Owner shall incur no liability to any party

4 as a result of or otherwise in connection with the sale or failure to sell. Subject to subsection (c), nothing herein shall require or prevent Owner selling the Property subject to the restrictions set forth in the Regulatory Agreement. The Owner shall direct the Bond Trustee in the foregoing as and to the extent necessary or appropriate.
(c) Sale Price. The Sale Price shall be at least equal to the sum of the amounts set forth below (net of any adjustments or prorations of the type described in Section 8(b) ) (the “Minimum Sale Price”):
i. an amount sufficient to either prepay, redeem in whole or fully defease for redemption on the earliest call date all Project Debt; plus ii. any fees or other amounts not identified in clause (i) that may be necessary to effect the complete release from and discharge of any lien, mortgage or other encumbrance on the Property; plus
iii. any amounts due to Owner (including the Owner Indemnified Persons, as provided in the Indenture), Bond Trustee, Project Administrator, Property Manager, or any predecessor or successor, or any other Person under any indenture, loan agreement, bond, note or other instrument relating to any Project Debt (including, without limitation, indemnification amounts, Owner’s Extraordinary Costs and Expenses, recurrent and extraordinary fees and expenses, and reimbursable costs and expenses of any kind or nature); plus
iv. Transaction Costs; minus
v. Any funds held by or for Owner under the Indenture applied to the retirement of Project Debt. Owner may retain such portion of moneys in the Extraordinary Expense Fund and may, in addition, retain such portion of moneys in other funds it deems reasonable as a reserve against future expected costs and expenses of the type described in subparagraph (iii).

Owner’s determination of this amount shall be final and incontestable.

Section 5. Mandatory Conveyance. Upon the retirement of all Project Debt, the Owner shall use its best efforts to effect a Conveyance within ninety (90) days thereafter, subject to Section 4(c) hereof. Owner shall give notice to Host of its intent to convey the Property, and Host (or its designee) shall have the first right to acquire the Property by delivery of an Exercise Notice to Owner within thirty (30) days after receipt of Owner’s notice. Nothing herein shall require or prevent Owner selling the Property subject to the restrictions set forth in the Regulatory Agreement.

5 Section 6. Surplus Cash; Surplus Conveyance Proceeds. Upon a Conveyance of the Property, Owner shall apply the proceeds of such Conveyance (i) to redeem the Bonds then Outstanding, (ii) to prepay, redeem in whole or fully defease any other Project Debt, and (iii) to pay any fees or other amounts listed in Section 4(c)(ii) – (iv). Any proceeds remaining following the foregoing payments (such remaining amounts hereinafter referred to as “Surplus Conveyance Proceeds”) shall be transferred to Host, and Host shall equitably share (within Host’s reasonable discretion) such Surplus Conveyance Proceeds with the other taxing agencies in the County so as to reimburse such taxing agencies for any foregone property tax revenue.

Section 7.

Terms of Conveyance.
(a) The Conveyance shall be in the nature of a grant deed to Purchaser in which Owner shall deliver one or more deeds, bills of sale, or other instruments of transfer without recourse or warranty of any kind or nature.
(b) The Property will be conveyed to Purchaser in AS IS CONDITION, WITH ALL FAULTS, and without representations or warranties of any kind or nature as to the condition of the Property, except as may otherwise be set forth in the purchase agreement. (c) There shall be no partial transfer and that, upon consummation of the Conveyance, Owner shall be fully divested of any and all right, title or interest in and to the Property.
(d) As soon as practicable after Host’s delivery of the Exercise Notice, Owner shall deliver to Purchaser a purchase agreement for the Property, and the parties shall negotiate in good faith towards a mutually satisfactory purchase agreement form and substance satisfactory to Owner and Purchaser and their counsel subject to the terms and conditions of this Agreement.

The purchase agreement shall permit Purchaser to conduct physical inspections of the Property and conduct due diligence related to the purchase of the Property, including without limitation its value and physical and environmental condition, and shall provide Purchaser a due diligence approval period of not less than sixty (60) days after the date of the purchase agreement. The purchase agreement shall provide for Owner to deliver to Purchaser copies of all plans, studies, records, reports, governmental notices and approvals, and other written materials related to the use, occupancy or condition of the Property that Owner has in its possession, including without limitation environmental, structural, mechanical, engineering and land surveys. Purchaser shall provide Owner with comments to the form of purchase agreement within fifteen (15) business days of its receipt thereof, and Owner and Purchaser shall use good faith efforts to negotiate, draft and execute a mutually acceptable purchase agreement as soon as practicable thereafter.

The purchase agreement shall provide for closing for the conveyance to Purchaser of good and marketable title to the Property at the Sales Price within the time set forth in Section 8(a) hereof.

Section 8. Closing.
(a) The closing of the Conveyance (“ Closing”) shall take place, in the case of a Conveyance pursuant to Section 4 hereof, not later than the ninetieth (90th) calendar day following the Owner’s receipt of the Exercise Notice, or as soon as possible thereafter, and in the case of a mandatory conveyance pursuant to Section 5 hereof, not later than the ninetieth (90th) calendar day following the retirement of all Project Debt, or as soon as possible thereafter. (b) All general and special real property taxes and assessments, and rents shall be prorated as of the Closing, with Purchaser responsible for all such items to the extent arising or

6 due at any time following the closing. General real property taxes shall be prorated at the time of Closing based on the net general real property taxes for the year of Closing.

Section 9. Recording. This Agreement, and any amendment thereto, shall be recorded with the recorder’s office of the County; provided, that upon termination of the term of this Agreement, Host shall cooperate with Owner to remove any such recorded Agreement or amendment thereto from title to the Property upon Owner’s reasonable request therefor and, in any event, by no later than thirty (30) days after the expiration of the original term of this Agreement.

Section 10.
[Reserved]
Section 11. [Reserved]
Section 12. Assignment. Neither party to this Agreement shall assign its interests, obligations, rights and/or responsibilities under this Agreement without the prior written consent of the other party, except as provided herein.

Section 13.

Limitation on Liability.
(a) The Owner and Host shall not be directly, indirectly, contingently or otherwise liable for any costs, expenses, losses, damages, claims or actions, of any conceivable kind on any conceivable theory, under or by reason of or in connection with this Agreement or any sale or Conveyance or failure or price thereof or application of proceeds thereof, except only as to moneys available therefor under and in accordance with the Indenture or this Agreement. (b) No Owner Indemnified Person or Host Indemnified Person shall be individually or personally liable for the payment of any sum hereunder or be subject to any personal liability or accountability by reason of the execution and delivery of this Agreement, or by any proceedings for the sale or Conveyance or failure or price thereof, or Host’s exercise or waiver of same, or otherwise except in the case of such Owner Indemnified Person’s own willful misconduct.
(c) The Bonds will not be a debt, liability or obligation of Host but rather, solely indebtedness of the Owner, limited to the Trust Estate pledged and available therefor under the Indenture. Under no circumstances shall Host be obligated to (i) provide any financing to acquire or construct the Project or any refinancing of the Project; (ii) approve any application or request for or take any other action in connection with any planning approval, permit or other action necessary for the acquisition, construction, rehabilitation or operation of the Project; or (iii) make any contribution or advance any funds whatsoever to the Owner.

7 Section 14. Actions or Claims Affecting Bondholders. Notwithstanding anything to the contrary contained in this Agreement or otherwise, Host shall not take any action or pursue any claim against Owner or the Project that may adversely affect the interests of Bondholders without the consent of the Controlling Party as defined in the Indenture. Any remedy against Owner under this Agreement shall be limited to specific performance and shall not include monetary damages.

Section 15.

Notices, Governing Law, Binding Effect and Other Miscellaneous Provisions.
(a) Notices. All notices provided for in this Agreement shall be in writing and shall be given to Owner or Host at the address set forth below or at such other address as they individually may specify thereafter by written notice in accordance herewith:

If to Owner or:

Designated Agent

CMFA Special Finance Agency
2111 Palomar Airport Road, Suite 320
Carlsbad, California 92011
Attention: Financial Advisor

With a copy to: Ascenda Capital LLC
9242 Beverly Blvd, Suite 300
Beverly Hills, California 90210
Attention: Matthew Avital

If to Host: City of Lancaster
44933 N. Fern Avenue
Lancaster, California 93534
Attention: City Manager

Such notices shall be deemed effective upon actual delivery or upon the date that any such delivery was attempted and acceptance thereof was refused, or if mailed, certified return receipt requested, postage prepaid, properly addressed, three (3) days after posting. (b) Consents and Approvals. All consents and approvals and waivers required or asserted hereunder shall be in writing, signed by the party from whom such consent, approval, waiver or notice is requested.
(c) No
n-Liability of Host or Owner Officers and Employees. No officer or employee of the Host shall be personally liable to the Owner, or any successor in interest, in the event of any default or breach by Host of any obligation of the terms of this Agreement. No officer or employee of the Owner shall be personally liable to Host, or any successor in interest, in the event of any default or breach by Owner of any obligation of the terms of this Agreement. (d) P
ronouns. Where appropriate to the context, words of one gender include all genders, and the singular includes the plural and vice versa. (e) A mendments. This Agreement may not be modified except in a written instrument signed by Host and Owner.

8 (f) Complete Agreement; Benefits. This Agreement together with all schedules and exhibits attached hereto and made part thereof supersedes all previous agreements, understandings and representations made by or between the parties hereto. This Agreement shall inure solely and exclusively to the benefit of the Owner and Host, and no other party shall have any right, remedy or claim under or by reason of this Agreement. (g) G
overning Law. This Agreement shall be governed by and construed in accordance with the laws of the State of California, without regard to conflicts of law principles.

All claims of whatever character arising out of this Agreement, or under any statute or common law relating in any way, directly or indirectly, to the subject matter hereof or to the dealings between Owner and any other party hereto, if and to the extent that such claim potentially could or actually does involve Owner, shall be filed and maintained in the Superior Court of California, County of San Diego, California. By executing and delivering this Agreement, each party hereto irrevocably: (i) accepts generally and unconditionally the exclusive jurisdiction and venue of such court; (ii) waives any defense of forum non-conveniens; and (iii) agrees not to seek removal of such proceedings to any court or forum other than as specified above. The foregoing shall not be deemed or construed to constitute a waiver by Owner of any prior notice or procedural requirements applicable to actions or claims against or involving governmental units and/or political subdivisions of the State of California that may exist at the time of and in connection with such matter.
(h) Legal
Construction. In case any one or more of the provisions contained in this Agreement shall for any reason be held by a court of competent jurisdiction to be invalid, illegal or unenforceable in any respect, such invalid provision shall be deemed severable, and shall not affect the validity or enforceability of any other provisions of this Agreement, all of which shall remain fully enforceable.
(i) C
onflicts. For the sake of clarity, Bond Counsel represents the Owner in the matters covered by this Agreement, and does not represent or owe any attorney -client or similar duty to Host with respect to any such matters. If Bond Counsel has represented, currently represents or in the future represents Host in some other matter, no conflict-of-interest shall be deemed to exist on that account, and to the extent a conflict is considered to exist anyway or arises, both Host and Owner waive any such conflict and consent to such representation of both Host and Owner.
(j) C
onflicts Between This Agreement and Regulatory Agreement. In the event of any conflict between the terms of the Regulatory Agreement and the specific terms and requirements of this Agreement, the specific terms and requirements set forth in the Regulatory Agreement shall prevail.
(k) Ter
m. This Agreement shall terminate upon the Conveyance or sale or other disposition of the Property in connection with remedies exercised under the Indenture in the Event of Default.
(l) C
aptions. The captions used in this Agreement are solely for convenience and shall not be deemed to constitute a part of the substance of the Agreement for purpose of its construction.
(m) C
ounterparts. This Agreement may be executed in any number of counterparts and each of such counterparts shall for all purposes be deemed to be an original; and all such counterparts shall together constitute but one and the same Agreement.

9 (n) Joint Powers Agreement. So long as the Bonds (or any other Project Debt for the Property) remains outstanding, Host shall not withdraw as a member of Owner without first obtaining an opinion of counsel or counsels, nationally -recognized in the subject matter of the opinion and acceptable to Owner in its sole discretion, addressed to the bond trustee and the Owner, to the effect that such withdrawal, in and of itself, will not have a material adverse effect on (i) any tax-exempt status of interest on the Bonds or other Project Debt, (ii) any exemption from property tax for the Property, or (iii) the validity of the Bonds under state law.

[SIGNATURE PAGE TO FOLLOW]

[Signature Page – Public Benefit Agreement – Vello Valley] IN WITNESS WHEREOF , the parties have executed this Agreement as of the date set forth above.

CMFA SPECIAL FINANCE AGENCY

By:

Edward J. Becker
Executive Director

CITY OF LANCASTER

By:

_________________
_________________
Approved as to Form:

By:___________________________
City Attorney

A Notary Public or other officer completing this certificate verifies only the identity of the individual who signed the document to which this certificate is attached, and not the truthfulness, accuracy, or validity of that document.

State of California )
County of ______________________ )
On _________________________, before me, ,
(insert name and title of the officer)
Notary Public, personally appeared ,
who proved to me on the basis of satisfactory evidence to be the person(s) whose name(s) is/are subscribed to the within instrument and acknowledged to me that he/she/they executed the same in his/her/their authorized capacity(ies), and that by his/her/their signature(s) on the instrument the person(s), or the entity upon behalf of which the person(s) acted, executed the instrument.

I certify under PENALTY OF PERJURY under the laws of the State of California that the foregoing paragraph is true and correct.

WITNESS my hand and official seal.

Signature (Seal)

EXHIBIT A

LEGAL DESCRIPTION OF REAL PROPERTY

The Land referred to herein is situated in the State of California, County of Los Angeles , City of Lancaster, and described as follows:
[TO COME]

STAFF REPORT
City of Lancaster
PH 2
1/10/2023
JC
Date: January 10, 2023
To: Mayor Parris and City Council Members
From: Jeff Hogan, Senior Director - Development Services Chenin Dow, Assistant Director - Real Estate & Economic Development Christopher Aune, Housing Manager - Real Estate & Economic Development Subject: 2021 Application to the California Department of Housing and Community Development Permanent Local Housing Allocation Program and 5-Year Plan Amendment
Recommendations:

1. Adopt Resolution No. , authorizing the application and adopting a plan for the State of California Department of Housing and Community Development Permanent Local Housing Allocation (PLHA) Program.

2. Authorize submission of an amended Permanent Local Housing Allocation 5-Year Plan.

3. Authorize appropriation of 2021 PLHA funds to General Ledger account fund 349-4792- 770.

4. Authorize the City Manager, or his designee, to execute all related documents.

5. Find that the California Environmental Quality Act does not apply to this item.

Fiscal Impact:

Additional PLHA funds to be received in the amount of $1,188,528.00. The funds will be appropriated to the existing General Ledger account fund 349-4792-770.

In July 2020, the City Council adopted a resolution authorizing the submission of an initial applicant and required a 5-Year Plan (Plan) for the California Department of Housing and Community Development (HCD) Permanent Local Housing Allocation (PLHA) program funds.

In May 2021, following the submission and approval of the City’s initial Plan, agreements to allow access to first-year 2019 funds in the amount of $694,855.00 were executed. Shortly thereafter, 1 1
3 5
the City submitted a streamlined HCD PLHA application for its 2020 allocation of $1,080,020.00 on June 11, 2021. On August 17, 2022, HCD released a NOFA for 2021 PLHA funds advising of an intended City of Lancaster allocation of $1,188,528.00. In response, staff has prepared the required application and an accompanying amended Plan to allow for the utilization of the funds in alignment with the City Council’s goals and previously approved commitments. The amended Plan will reallocate the percentages of funds among selected eligible activities for years two (2020) and three (2021).

Background:

In 2017, Senate Bill 2 created the first permanent source of funding to increase the affordable housing stock in the State of California. Revenue is generated through a $75 recording fee on real estate transactions, and therefore, will vary from year to year depending on activity. The PLHA program is overseen by the State’s Department of Housing and Community Development (HCD), who issued a Request for a Proposal in March 2020.

HCD gives cities flexibility with the PLHA Plan to meet the needs of the community, and changes can be made with proper notice to the community as described later in this report. With this flexibility in mind, staff is proposing the PLHA Plan be updated to reflect varying annual percentage allocation of PLHA funds to three (3) eligible activities:

1. To make a construction loan for a previously approved 113-unit multifamily rental housing development currently owned by the Housing Authority, as well as predevelopment and/or construction loans for 1-2 additional multifamily rental developments; and

2. To make deferred loans for pre-development costs and non-recurring closing costs to assist low-and moderate-income owner-occupied households with incomes of no more than 120% AMI to construct an Accessory Dwelling Unit (ADU) on their property; and

3. To provide down payment assistance loans to low- and moderate-income workforce households to purchase their first home.

As required by HCD, the City initiated the required 10-day public notice on December 31, 2022, inviting public review and comment. Copies of applicable documents were made available online, in person at the City Clerk’s Office, and through email request.

CA:CD/sm

Attachments:

Resolution No.

PLHA FY 2021 Application
PLHA 5-Year Plan Amendment
RESOLUTION NO.

A RESOLUTION OF THE CITY COUNCIL OF THE CITY OF

LANCASTER, CALIFORNIA, AUTHORIZING THE

APPLICATION AND ADOPTING A PLAN FOR THE STATE OF

CALIFORNIA DEPARTMENT OF HOUSING AND

COMMUNITY DEVELOPMENT PERMANENT LOCAL

HOUSING ALLOCATION (PLHA) PROGRAM
A necessary quorum and majority of the City Council Members of the City of Lancaster hereby consents to, adopts, and ratifies the following resolution:

WHEREAS, the Department of Housing and Community Development is authorized to provide up to $335 million under the SB 2 Permanent Local Housing Allocation Program Formula Component from the Building Homes and Jobs Trust Fund for assistance to Cities and Counties (as described in Health and Safety Code section 50470 et seq. (Chapter 364, Statutes of 2017 (SB 2)); and
WHEREAS the State of California (the “State”), Department of Housing and Community Development (“Department”) issued a Notice of Funding Availability (“NOFA”) dated August 17, 2022, under the Permanent Local Housing Allocation (“PLHA”) Program; and WHEREAS the City of Lancaster is an eligible Local government who has applied for program funds to administer one or more eligible activities, or a Local or Regional Housing Trust Fund to whom an eligible Local government delegated its PLHA formula allocation; and WHEREAS the Department may approve funding allocations for PLHA Program, subject to the terms and conditions of the Guidelines, NOFA, Program requirements, the Standard Agreement, and other contracts between the Department and PLHA grant recipients.

NOW, THEREFORE, BE IT RESOLVED BY THE CITY COUNCIL OF THE CITY OF LANCASTER, AS FOLLOWS:

Section 1. If Applicant receives a grant of PLHA funds from the Department pursuant to the above-referenced PLHA NOFA, it represents and certifies that it will use all such funds in a manner consistent and in compliance with all applicable state and federal statutes, rules, regulations, and laws, including without limitation all rules and laws regarding the PLHA Program, as well as any and all contracts Applicant may have with the Department.

Section 2. Applicant is hereby authorized and directed to receive a PLHA grant, in an amount not to exceed the five-year estimate of the PLHA formula allocations, as stated in Appendix C of the current NOFA $4,169,130.00 in accordance with all applicable rules and laws.

Section 3. Applicant hereby agrees to use the PLHA funds for eligible activities as approved by the Department and in accordance with all Program requirements, Guidelines, other rules and laws, as well as in a manner consistent and in compliance with the Standard Agreement and other contracts between the Applicant and the Department.

Resolution No.

Page 2 ends

Section 4. Pursuant to Section 302(c)(4) of the Guidelines, Applicant’s PLHA Plan for the 2019-2023 Allocations is attached to this resolution, and Applicant hereby adopts this PLHA Plan and certifies compliance with all public notice, public comment, and public hearing requirements in accordance with the Guidelines.

Section 5. Applicant certifies that it has or will subgrant some or all of its PLHA funds to another entity or entities. Pursuant to Guidelines Section 302(c)(3), “entity” means a housing developer or program operator, but does not mean an administering Local government to whom a Local government may delegate its PLHA allocation.

Section 6. Applicant certifies that its selection process of these subgrantees was or will be accessible to the public and avoided or shall avoid any conflicts of interest.

Section 7. Pursuant to Applicant’s certification in this resolution, the PLHA funds will be expended only for eligible Activities and consistent with all program requirements.

Section 8. Applicant certifies that, if funds are used for the acquisition, construction or rehabilitation of for-sale housing projects or units within for-sale housing projects, the grantee shall record a deed restriction against the property that will ensure compliance with one of the requirements stated in Guidelines Section 302(c)(6)(A), (B) and (C).

Section 9. Applicant certifies that, if funds are used for the development of an Affordable Rental Housing Development, the Local government shall make PLHA assistance in the form of a low-interest, deferred loan to the Sponsor of the Project, and such loan shall be evidenced through a Promissory Note secured by a Deed of Trust and a Regulatory Agreement shall restrict occupancy and rents in accordance with a Local government-approved underwriting of the Project for a term of at least 55 years.

Section 10. Applicant shall be subject to the terms and conditions as specified in the Standard Agreement, the PLHA Program Guidelines and any other applicable SB 2 Guidelines published by the Department.

Section 11. City of Lancaster City Manager, or his designee is authorized to execute the PLHA Program Application, the PLHA Standard Agreement and any subsequent amendments or modifications thereto, as well as any other documents which are related to the Program or the PLHA grant awarded to Applicant, as the Department may deem appropriate.

Resolution No.

Page 3 ends

PASSED, APPROVED, and ADOPTED this _____ of ________, 2023, by the following vote:

AYES:

NOES:

ABSTAIN:

ABSENT:

ATTEST: APPROVED:

ANDREA ALEXANDER, ER
City Clerk
City of Lancaster
R. REX PARRIS
Mayor
City of Lancaster

STATE OF CALIFORNIA

COUNTY OF LOS ANGELES

CITY OF LANCASTER
)
) ss
)

CERTIFICATION OF RESOLUTION

CITY COUNCIL
I, , City of Lancaster, California,
do hereby certify that this is a true and correct copy of the original Resolution No. , for which the original is on file in my office.

WITNESS MY HAND AND THE SEAL OF THE CITY OF LANCASTER, on this _____day of ______,__________.
(seal)
PLHA Formula 5-year Plan - Amendment Rev. 5/7/21
§301(a)(2) The predevelopment, development, acquisition, rehabilitation, and preservation of affordable rental and ownership housing, including Accessory Dwelling Units (ADUs), that meets the needs of a growing workforce earning up to 120 percent of AMI, or 150 percent of AMI in high-cost areas. ADUs shall be available for occupancy for a term of no less than 30 days.
§301(a)(1) The predevelopment, development, acquisition, rehabilitation, and preservation of multifamily, residential live-work, rental housing that is affordable to Extremely low-,Very low-, Low-, or Moderate-income households, including necessary operating subsidies. §301(a)(7) Accessibility modifications in Lower-income Owner-occupied housing. §301(a)(6) Assisting persons who are experiencing or At-risk of homelessness, including, but not limited to, providing rapid re-housing, rental assistance, supportive/case management services that allow people to obtain and retain housing, operating and capital costs for navigation centers and emergency shelters, and the new construction, rehabilitation, and preservation of permanent and transitional housing. §301(a)(5) Capitalized Reserves for services connected to the preservation and creation of new permanent supportive housing. §301(a)(4) Matching portions of funds available through the Low- and Moderate-Income Housing Asset Fund pursuant to subdivision (d) of HSC Section 34176.

Eligible Activities, §301
§301(a)(3) Matching portions of funds placed into Local or Regional Housing Trust Funds.

Included?§301(a) Eligible activities are limited to the following:
§301(a)(10) Fiscal incentives made by a county to a city within the county to incentivize approval of one or more affordable housing Projects, or matching funds invested by a county in an affordable housing development Project in a city within the county, provided that the city has made an equal or greater investment in the Project. The county fiscal incentives shall be in the form of a grant or low-interest loan to an affordable housing Project. Matching funds investments by both the county and the city also shall be a grant or low-interest deferred loan to the affordable housing Project. §301(a)(9) Homeownership opportunities, including, but not limited to, down payment assistance. §301(a)(8) Efforts to acquire and rehabilitate foreclosed or vacant homes and apartments.

YES
YES
YES
YES
YES
YES
YES
YES
YES
YES
PLHA Page 1 Formula Allocation Application
§302(c)(4)(C) Provide a description of how the Plan is consistent with the programs set forth in the Local Government’s Housing Element.

The City of Lancaster's Housing Element contains programs and policies to facilitate and assist in the construction of new affordable multfifamily housing and the City plans to use 75%-80% of its PLHA funds for this Activity.
§301(a)(1) The predevelopment, development, acquisition, rehabilitation, and preservation of multifamily, residential live-work, rental housing that is affordable to extremely low-,very low-, low-, or moderate- income households, including necessary Operating subsidies. §302(c)(4)(E)(i) Provide a detailed and complete description of how allocated funds will be used for each proposed Affordable Rental Housing Activity. §302(c)(4) Plan Rev. 5/7/21
§302(c)(4)(A) Describe the manner in which allocated funds will be used for eligible activities.

The City of Lancaster plans to use PLHA funds for 3 activities: 1) to make a construction loan for a 113-unit multifamily rental housing project on a Housing Successor Agency Housing & Neighborhood Revitalization (HNR) site that will be occupied by households with incomes of no more than 60% AMI, as well predevelopment and/or construction loans for an 1-2 additional multifamily rental projects that will be occupied by households with income of no more than 80% AMI; 2) to make deferred loans for pre-development costs and non-recurring closing costs to assist low- and moderate-income Owner-occupied households with incomes of no more than 120% AMI build an Accessory Dwelling Unit (ADU) on their property; and 3) to provide downpayment assistance loans to low- and moderate-income workforce households to buy affordable homes.
§302(c)(4)(B) Provide a description of the way the Local government will prioritize investments that increase the supply of housing for households with incomes at or below 60 percent of Area Median Income (AMI).

The 113-unit multifamily rental housing project will be occupied by households with incomes of no more than 60% AMI--this project will receive the largest percentage of the City of Lancaster's PLHA allocaton, followed by the ADU assistance program.

Activities Detail (Activities Detail (Must Make a Selection on Formula Allocation Application worksheet under Eligible Activities, §301)) In Years 1 & 2, the PLHA funds will be used to make a construction loan for a 113-unit multifamily rental housing project that will be occupied by households with incomes of no more than 60% AMI. In Years 3-5, and also using the balance of funds remaining for Activity 1 from Year 2, the PLHA funds will be used to fund 1-2 multifamily rental housing projects on 1-2 additional Housing Successor Agency Housing & Neighborhood Revitalization (HNR) sites for a total of 80 multifamily rental units that will be occupied by households with incomes of no more than 80% AMI.

Funding Allocation Year 2019 2020 2020 2021 2022 2023
Complete the table below for each proposed Affordable Rental Housing Activity to be funded with 2019-2023 PLHA allocations. If a single Activity will be assisting households at more than one level of Area Median Income, please list the Activity as many times as needed to capture all of the AMI levels that will be assisted, but only show the percentage of annual funding allocated to the Activity one time (to avoid double counting).
193
§302(c)(4)(E)(iii) A description of major steps/actions and a proposed schedule for the implementation and completion of the Activity. §302(c)(4)(E)(i) Percentage of
Funds Allocated for the
Proposed Affordable Rental
Housing Activity
100.0% 60.0% 10.0% 70.0% 70.0% 70.0%
§302(c)(4)(E)(ii) Area Median
Income Level Served 60% 60% 80% 80% 80% 80% TOTAL
630
§302(c)(4)(E)(ii) Unmet share of
the RHNA at the AMI Level
Note: complete for year 2019
& 2020 only
A developer was selected for the 113-unit multifamily rental housing project and the City and Developer entered into a Disposition and Development Agreement (DDA) in 2021. The project received an AHSC award in Round 6 and the Developer will be submitting an application for LIHTC in 2023. Construction is estimated to begin at the end of 2023. An RFP for the 1-2 additional mutlifamily rental projects will be released in 2023.
55 Years 55 Years 55 Years 55 Years 55 Years 55 Years
§302(c)(4)(E)(iv) Period of
Affordability for the Proposed
Affordable Rental Housing
Activity (55 years required for
rental housing projects)
55 Years 55 Years 55 Years 55 Years 55 Years 55 Years 55 Years 55 Years §302(c)(4)(E)(ii) Projected
Number of Households Served 113 80
258 372
PLHA Page 1 302(c)(4) Plan
§301(a)(6) Assisting persons who are experiencing or At risk of homelessness, including, but not limited to, providing rapid rehousing, rental assistance, supportive/case management services that allow people to obtain and retain housing, operating and capital costs for navigation centers and emergency shelters, and the new construction, rehabilitation, and preservation of permanent and transitional housing.
§301(a)(2) The predevelopment, development, acquisition, rehabilitation, and preservation of Affordable rental and ownership housing, including Accessory Dwelling Units (ADUs), that meets the needs of a growing workforce earning up to 120 percent of AMI, or 150 percent of AMI in high-cost areas. ADUs shall be available for occupancy for a term of no less than 30 days. §302(c)(4)(E)(ii) Area Median
Income Level Served 120% 120% 120% 120% TOTAL
Complete the table below for each proposed Affordable Rental and Ownership Housing Activity to be funded with 2019-2023 PLHA allocations. If a single Activity will be assisting households at more than one level of Area Median Income, please list the Activity as many times as needed to capture all of the AMI levels that will be assisted, but only show the percentage of annual funding allocated to the Activity one time (to avoid double counting).

Type of Affordable Housing
Activity

ADU ADU ADU ADU
164 194 358
§302(c)(4)(E)(ii) Projected
Number of Households Served 15 15 30
§302(c)(4)(E)(i) Percentage of
Funds Allocated for Each
Affordable Housing Activity
30% 20% 20% 20%
The ADU assistance program is currently being designed and will begin in 2023. §301(a)(3) Matching portions of funds placed into Local or Regional Housing Trust Funds. §302(c)(4)(E)(iv) Period of
Affordability for the Proposed
Activity (55 years required for
rental housing projects)
30 30 30 30
§302(c)(4)(E)(iii) A description of major steps/actions and a proposed schedule for the implementation and completion of each Affordable Rental and Ownership Housing project. §301(a)(7) Accessibility modifications in Lower-income Owner-occupied housing. §302(c)(4)(E)(ii) Unmet share of
the RHNA at AMI Level
Note: complete for year 2019
& 2020 only
§302(c)(4)(E)(i) Provide a detailed and complete description of how allocated funds will be used for each proposed Affordable Rental and Ownership Housing Activity. Percentage of Funds Allocated for Affordable Owner- occupied Workforce Housing 15%
The City will provide PLHA funds to make deferred loans for pre-development costs and non-recurring closing costs to assist low- and moderate-income Owner-occupied households with incomes of no more than 120% AMI build an Accessory Dwelling Unit (ADU) on their property Funding Allocation Year 2019 2020 2021 2022 2023
§301(a)(4) Matching portions of funds available through the Low- and Moderate-Income Housing Asset Fund pursuant to subdivision (d) of HSC Section 34176. §301(a)(5) Capitalized Reserves for Services connected to the preservation and creation of new permanent supportive housing. §301(a)(8) Efforts to acquire and rehabilitate foreclosed or vacant homes and apartments. §301(a)(9) Homeownership opportunities, including, but not limited to, down payment assistance. §302(c)(4)(E)(i) Provide a detailed and complete description of how allocated funds will be used for the proposed Activity. Percentage of Funds Allocated for Affordable Owner- occupied Workforce Housing (AOWH) 10%
The PLHA funds will be used to expand the City's existing downpayment assistance program for low- and moderate-income households earning up to 120% AMI.

Complete the table below for each proposed Activity to be funded with 2019-2023 PLHA allocations. If a single Activity will be assisting households at more than one level of Area Median Income, please list the Activity as many times as needed to capture all of the AMI levels that will be assisted, but only show the percentage of annual funding allocated to the Activity one time (to avoid double counting).PLHA Page 2 302(c)(4) Plan Funding Allocation Year 2019 2020 2021 2022 2023
Type of Homeowner Assistance
Down
Payment
Assistance
Down
Payment
Assistance
Down
Payment
Assistance
§302(c)(4)(E)(i) Percentage of
Funds Allocated for the
Proposed Activity

10.00% 10.00% 10.00%
§302(c)(4)(E)(ii) Area Median
Income Level Served 120% 120% 120% TOTAL
§302(c)(4)(E)(ii) Unmet share of
the RHNA at AMI Level
Note: complete for year 2019
& 2020 only
0 §302(c)(4)(E)(ii) Projected
Number of Households Served 10 10 20
§302(c)(4)(E)(iii) A description of major steps/actions and a proposed schedule for the implementation and completion of the Activity. §302(c)(4)(E)(iv) Period of
Affordability for the Proposed
Activity
30 30
The City will begin taking applications for this program from interested homebuyers in 2023. §301(a)(10) Fiscal incentives made by a county to a city within the county to incentivize approval of one or more affordable housing Projects, or matching funds invested by a county in an affordable housing development Project in a city within the county, provided that the city has made an equal or greater investment in the Project. The county fiscal incentives shall be in the form of a grant or low-interest loan to an affordable housing Project. Matching funds investments by both the county and the city also shall be a grant or low-interest deferred loan to the affordable housing Project.

PLHA Page 3 302(c)(4) Plan
25 24
23 22
21 20
19 18
17 16
15 14
13 12
11 10
9 8
7 6
5 4
3 2
1 Justification:

Issue # Program
Name & Tab Section Cell# Update/Comment Urgency ADT Status Status Date
Organization: Email: Contact Phone:

Application Development Team (ADT) Support Form Rev. 5/7/21 Please complete the "yellow" cells in the form below and email a copy to: [email protected]. and [email protected]. A member of the Application Development Team will respond to your request within ASAP.

Full Name: Date Requested: Application
Version Date:

PLHA Page 1 Appplication Support
Address:

Has applicant received their 2021 NOFA funds? No Based on the requirements in guideline section 300(e), how much has the applicant committed? $1,320,200
Contact Phone:

LancasterCity:
44933 Fern Avenue
Yes
Zip Code:
661.723.6165
State:
§302(a) Housing Element compliance: Applicant and Delegating Local Government's if applicable Housing Element was adopted by the Local Government’s governing body by the application submittal date and subsequently determined to be in substantial compliance with state Housing Element Law pursuant to Government Code Section 65585.

Lancaster
Yes
Contact Name:

City:Address:
44933 Fern AvenueAddress:

Christopher Aune
§300(e) Applicant does not have uncommitted PLHA funds greater than permitted by Section 300(e). No §503(b) Applicant has submitted the PLHA Annual Report by July 31, 2021 (if applying before July 31, 2022), or has submitted the PLHA Annual Report due by July 31, 2022 (if applying on or after July 31, 2022). Yes
Date
Certifications
Jason Caudle
Authorized Representative Printed Name
City Manager
Title
On behalf of the entity identified below, I certify that: The information, statements and attachments included in this application are, to the best of my knowledge and belief, true and correct and I possess the legal authority to submit this application on behalf of the entity identified in the signature block. 11/29/22
Signature
File Name: Reuse Plan Program Income Reuse Plan describing how repaid loans or accrued interest will be used for eligible activities in Section 301.

Narrative uploaded
to HCD? Yes
CA
County:

Contact Email:

Senior Manager - Economic D
44933 Fern Avenue
661.723.6123
Lancaster
[email protected] Rep. Email: Phone:
§302(c)(5) Applicant certifies that the Plan has not reallocated more than 10 percent of funds among Activities from the approved 5-year Plan included in the PLHA program Standard Agreement, Exhibit E. Yes
Yes§302(c)(8) If a program income reuse plan was not submitted with the 2020 application, has Applicant attached a program income reuse plan describing how repaid loans and/or accrued interest will be reused for eligible activities specified in Section 301? Local Government Formula Allocation Rev. 2/17/22
This streamlined application form is limited to Applicants who applied for and received an award from the 2020 and/or 2021 Formula Allocation NOFA.

Yes
CA Zip: 93534 Los Angeles State:
§302(c)(2) Applicant certifies that submission of the application was authorized by the governing board of the Applicant.

Threshold Requirements
Title:
93534
§302(b) Applicant and Delegating Local Government have submitted the current or prior year's Annual Progress Report to the Department of Housing and Community Development pursuant to Government Code Section 65400. Yes Did Applicant receive an award from the 2020 and/or 2021 Formula Allocation NOFA? Title: Housing Manager
State: CA
Eligible Applicant Type: Entitlement
Local Government Recipient of PLHA Formula Allocation: Lancaster 2021 PLHA NOFA Formula Allocation Amount: Allowable Local Admin (5%): $54,001.00$1,080,020 Zip Code:

Instructions: If the Local Government Recipient of the PLHA Formula Allocation delegated its PLHA formula allocation to another Local Government in its 2020 application, the Applicant (for which information is required below) continues to be the administering Local Government, which received the award. The PLHA award will be made to the Applicant (upon meeting threshold requirements) and the Applicant is responsible for meeting all program requirements throughout the term of the Standard Agreement.

Eligible Applicants §300
93534
Auth Rep Name:
[email protected]
§300(a) and (b) Eligible Applicants for the Entitlement and Non-Entitlement formula component described in Section §100(b)(1) and (2) are limited to the metropolitan cities and urban counties allocated a grant for the federal fiscal year 2017 pursuant to the federal CDBG formula specified in 42 USC, Section §5306 and Non-entitlement local governments.

Applicant: City of Lancaster
Chenin Dow
City:
2022 PLHA NOFA Formula Allocation Amount: $1,188,528 Allowable Local Admin (5%): $59,426.00 Which NOFA year(s) are you applying for with this application? 2022 Only PLHA Page 1 Formula Allocation Application

STAFF REPORT
City of Lancaster
PH 3
1/10/2023
JC
Date: January 10, 2023
To: Mayor Parris and City Council Members
From: Jeff Hogan, Senior Director - Development Services Chenin Dow, Assistant Director - Real Estate & Economic Development Christopher Aune, Housing Manager - Real Estate & Economic Development Subject: HOME-ARP Allocation Plan
Recommendations:

1. Adopt Resolution No. , approving the HOME Investment Partnerships American Rescue Plan (HOME-ARP) Allocation Plan.

2. Authorize the City Manager, or his designee, to execute all related documents.

3. Find that the California Environmental Quality Act does not apply to this item.

Fiscal Impact:

The City will be reimbursed $2,450,524.00 in one-time HOME-ARP funding, designated for exclusive use in affordable housing activities.

Background:

The City of Lancaster has been allocated $2,450,524.00 of one-time HOME-American Rescue Plan Act (HOME-ARP) funding from the United States Department of Housing and Urban Development (HUD). In order to receive the HOME-ARP allocation, the City has developed the proposed HOME-ARP Allocation Plan that will become part of the City’s FY 2022-2023 HUD Annual Action Plan by substantial amendment, as required by HUD. Approval and submission of the HOME-ARP Allocation Plan has no impact on the City’s General Fund.

To ensure broad input into the HOME-ARP Allocation Plan from stakeholders and the public, the City engaged in a wide range of public outreach initiatives. These included two virtual stakeholder consultation sessions, an in-person session with the public, a joint session of the City’s Social Equity and Homeless Impact commissions that is also open to the public, and a survey of stakeholders.
1 1
4 0
Analysis
The City of Lancaster is a participating jurisdiction for HOME Investment Partnerships (HOME) funds through HUD. Accordingly, the City was awarded a one-time grant of $2,450,524.00 in HOME-American Rescue Plan Act (HOME-ARP) funding pursuant to the American Rescue Plan Act of 2021 (ARPA).

As a prerequisite for receiving the HOME-ARP allocation, the City is required to submit a HOME- ARP Allocation Plan that includes: 1) a summary of the consultation process and the results of consultation; 2) a summary of comments received through the public participation process and a summary of any comments or recommendations not accepted and the reason why; 3) a description of HOME-ARP qualifying populations within the jurisdiction; 4) an assessment of unmet needs of each qualifying population; 5) an assessment of gaps in housing and shelter inventory, homeless assistance and services, and homelessness prevention service delivery system; and 6) a summary of planned use of HOME-ARP funds for eligible activities based on the unmet needs of the qualifying populations.

ARPA defines qualifying individuals or families, including Veterans, that are: 1) homeless, as defined in section 103(a) of the McKinney-Vento Homeless Assistance Act; 2) at risk of homelessness, as defined in section 401 of the McKinney-Vento Homeless Assistance Act; 3) fleeing or attempting to flee domestic violence, dating violence, sexual assault, or stalking (as defined by HUD in 24 CFR 5.2003) or human trafficking (as outlined in the Trafficking Victims Protection Act of 2000 as amended [22 USC 7102]); and 4) part of other populations, where providing supportive services or assistance under section 212(a) of the National Affordable Housing Act 42 USC 12472(a) would prevent a family’s homelessness or serve those with the greatest risk of housing instability.

Under the law, HOME-ARP funds may be used by the City of Lancaster to benefit qualifying populations through the following program types:

1. Tenant-based Rental Assistance (TBRA);

2. Development and support of affordable housing;

3. Provision of supportive services;

4. Acquisition and development of non-congregate shelter;

5. Nonprofit capacity building and operating assistance; and

6. Program planning and administration.

City HOME-ARP Projects Considered for Funding Recommendation Through analysis of data and consultation with stakeholders, staff has determined that the highest and best use of this allocation, for the greatest impact in the lives of individuals and families, is to allocate the funds to the construction of affordable housing units. This effort aims to help permanently resolve homelessness and/or housing insecurity for those individuals and families who benefit from the proposed units. In addition, this use of the HOME-ARP allocation best complements other funding sources the City utilizes to provide needed services. 1 1
4 0
A breakdown of the funding allocation is reflected below:

Activity Funding Amount Percent of
Allocation
Non-congregate Shelter
Affordable Rental Housing $2,082,945.00 85%
Tenant-based Rental Assistance
Supportive Services
Nonprofit Operating Assistance
Nonprofit Capacity Building
Administration and Planning $367,579.00 15%
Total HOME-ARP Allocation $2,450,524.00
CA/sm

Attachments:

Resolution No.

Exhibit A: HOME-ARP Allocation Plan
RESOLUTION NO.

A RESOLUTION OF THE CITY COUNCIL OF THE CITY OF

LANCASTER, CALIFORNIA, APPROVING THE HOME

INVESTMENT PARTNERSHIPS - AMERICAN RESCUE PLAN
(HOME-ARP) ALLOCATION PLAN
WHEREAS, the U.S. Congress approved and President Biden signed into law the American Rescue Plan Act (“ARP” or “ARPA”) on March 11, 2021, for the purpose of providing stimulus to speed America’s recovery from the health and economic effects of the COVID-19 global pandemic; and
WHEREAS, ARPA provides $5 billion for the HOME Investment Partnership Program- American Recovery Plan (“HOME-ARP”), to be administered by the U.S. Department of Housing and Urban Development (“HUD”) to provide funding to HOME-ARP Participating Jurisdictions to reduce homelessness and increase housing stability; and WHEREAS, HUD has notified the City of Lancaster of a one-time allocation of HOME- ARP funds in the amount of $2,450,524.00; and
WHEREAS, as a requirement of receiving HOME-ARP funds, the City is required to develop a HOME-ARP Allocation Plan comprised of a summary of the consultation and public participation process, a needs assessment and gap analysis, a summary of the planned use of the funds, and an estimate of the number of housing units the City will produce or preserve with the funds; and
WHEREAS, the City, through targeted, robust community engagement and the solicitation of input and data, has prepared a HOME-ARP Allocation Plan; and WHEREAS, the HOME-ARP Allocation Plan proposes to allocate funds towards housing construction and supportive services as further described and defined in the HOME-ARP Allocation Plan; and
WHEREAS, in accordance with the City’s Citizen Participation Plan, a draft of the HOME- ARP Allocation Plan, a 30-day invitation for public comment, and notice of a required public hearing were published on November 10, 2022; and
WHEREAS, the City Council held a public hearing on December 13, 2022, to obtain further comment and consider the draft HOME-ARP Allocation Plan; and WHEREAS, the City was initially allocated $122,526.00 for the administration and planning of the HOME-ARP Allocation Plan; and
WHEREAS, the Lancaster City Council desires to approve the proposed HOME-ARP Allocation Plan and authorize its submission to HUD for review and approval.

Resolution No.

Page No. 2
2 9
9 5
NOW, THEREFORE, BE IT RESOLVED THAT:

Section 1. The City of Lancaster is hereby submitting its request to authorize the City Manager, or his designee, to submit the HOME-ARP Allocation Plan to HUD for review and approval.

Section 2. The City of Lancaster hereby agrees to authorize the City Manager, or his designee, to execute all related documents
Section 4. The Budget is hereby amended to incorporate the HOME-ARP funding in the amount of $2,450,524.00 to Account No. 399-4792-700, for expenditure in accordance with the HOME-ARP Program.

PASSED, APPROVED and ADOPTED this ___ day of __________, ____, by the following vote:

AYES:

NOES:

ABSTAIN:

ABSENT:

ATTEST: APPROVED:
____________________________ ______________________________ ANDREA ALEXANDER R. REX PARRIS
City Clerk Mayor
City of Lancaster City of Lancaster
STATE OF CALIFORNIA }
COUNTY OF LOS ANGELES }ss
CITY OF LANCASTER }
Resolution No.

Page No. 3
2 9
9 5

CERTIFICATION OF RESOLUTION

CITY OF LANCASTER
I, __________________________, ___________________________ City of Lancaster, CA, do hereby certify that this is a true and correct copy of the original Resolution No. , for which the original is on file in my office.

WITNESS MY HAND AND THE SEAL OF THE CITY OF LANCASTER, on this _________ day of ________________, ________.
(seal)
___________________________________

HOME Investment Partnerships Program

American Rescue Plan

DRAFT

HOME-ARP ALLOCATION PLAN
November 10, 2022

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DRAFT

HOME-ARP ALLOCATION PLAN

HOME Investment Partnerships (HOME) Program
American Rescue Plan

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CITY COUNCIL

R. REX PARRIS
Mayor

MARVIN CRIST
Vice Mayor

KEN MANN
Councilmember

RAJ MALHI
Councilmember

DARRELL DORRIS
Councilmember

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CITY OF LANCASTER - i - HOME-ARP ALLOCATION PLAN

CONTENTS
Executive Summary ...................................................................................................... 1 Introduction ................................................................................................................... 2 HOME-ARP Eligible Qualifying Populations and Activities ............................................ 2 Stakeholder Consultation and Public Participation ......................................................... 4 Stakeholder Consultation – Organizations Consulted by Type and Method ................. 4 Summary of Feedback Received from Consulted Organizations.................................. 4 Public Participation .................................................................................................... 7 Efforts to Broaden Public Participation ........................................................................ 9 Public Comments and Recommendations Received ................................................... 9 Public Comments and Recommendations Not Accepted and Reasons Why ................ 9 Needs Assessment and Gap Analysis .......................................................................... 10 Housing Inventory Count .......................................................................................... 10 Size and Demographic Composition of Qualifying Populations .................................. 11 Sheltered Homeless Populations .............................................................................. 11 Unsheltered Homeless Populations .......................................................................... 11 At-risk of Homelessness ........................................................................................... 12 Fleeing or Attempting to Flee Domestic Violence, Dating Violence, Sexual Assault, Stalking or Human Trafficking ................................................................................... 12 Other Populations: Currently housed and at risk of repeat homelessness .................. 12 Other Populations: At greatest risk of housing instability – Households with incomes <30% AMI and experiencing severe housing cost burden ......................................... 13 Other Populations: At greatest risk of housing instability – Households with incomes 30-50% AMI that meet HUD’s §91.5 definition of at risk of homelessness ................. 13 Unmet Housing and Service Needs of Qualifying Populations ................................... 13 Current Resources Available to Assist Qualifying Populations ................................... 14 Current Resources: Congregate Beds and Non-congregate Shelter Units ................. 15 Current Resources: Supportive Services .................................................................. 15 Current Resources: Tenant-based Rental Assistance ............................................... 15 Current Resources: Affordable and Permanent Supportive Rental Housing ............... 16

CITY OF LANCASTER - ii - HOME-ARP ALLOCATION PLAN

Shelter, Housing and Service Delivery System Gaps ................................................. 16 Shelter Gap ............................................................................................................. 16 Tenant-based Rental Assistance Gap ....................................................................... 16 Affordable and Permanent Supportive Rental Housing Gap ...................................... 16 Service Delivery System Gaps.................................................................................. 17 Characteristics of Housing Associated with Increased Risk of Homelessness for Other Populations .............................................................................................................. 18 Priority Needs for Qualifying Populations .................................................................. 18 HOME-ARP Activities .................................................................................................. 20 Uses of HOME-ARP Funding .................................................................................... 20 Rationale for Uses of HOME-ARP Funding ................................................................ 20 HOME-ARP Housing Production Goals ........................................................................ 20 Preferences ................................................................................................................ 21 HOME-ARP Refinancing Guidelines ............................................................................. 21

Appendices

Citizen Participation and Consultation ................................................................ Appendix A Grantee SF-424s and Certifications ................................................................... Appendix B

CITY OF LANCASTER - iii - HOME-ARP ALLOCATION PLAN

VERSION HISTORY
No. Summary of Changes
1 Published Draft for Public Comment: 11/15/22 Sent to HUD for Approval: TBD Conducted Public Hearing: 12/13/22 Approved by HUD: TBD Original HOME-ARP Allocation Plan.

Public Contact Information
City of Lancaster
Attn: Chris Aune
44933 Fern Avenue
Lancaster, CA 93534
661-723-6000
www.cityoflancasterca.org

CITY OF LANCASTER - 1 - HOME-ARP ALLOCATION PLAN

Executive Summary
The City of Lancaster has been allocated $2,450,524 of HOME-American Rescue Plan Act (HOME-ARP) funding from the US Department of Housing and Urban Development (HUD).

In order to receive the HOME-ARP allocation, the City must develop a HOME-ARP Allocation Plan that will become part of the City’s PY2021 HUD Annual Action Plan by substantial amendment.

To ensure broad input into the HOME-ARP Allocation Plan from stakeholders and the public, the City engaged in consultation with stakeholders and the public, including a virtual consultation session, a survey of stakeholders, a 30-day public comment period, and a public hearing.

The needs assessment and gap analysis identified the following needs and gaps within the City:
 In January 2022, the annual Point in Time (PIT) count revealed that 160 people were residing in emergency housing, either in shelter or transitional housing. Another 476 people were unsheltered on the streets, in tents or makeshift shelters, or in cars, vans, RVs or campers.
 2014-2018 CHAS Data from HUD reported 12,295 households with incomes at or below 30% AMI are at risk of homelessness in the City.
 The 2014-2019 HUD CHAS data indicates there are 8,245 renter households with an annual income at or below 30% AMI with a cost burden that are at greatest risk of housing instability.
 The CHAS data reports that there are 2,795 households with incomes more than 30 and but equal to or less than 50% AMI that are at risk of homelessness in the City because of at least one of the housing problems as defined by HUD.  The greatest need for supportive services is in the areas of housing search and counseling services, job training and employment services, financial assistance costs, mental health services, and case management services.

To address these needs within the community, the City will allocate a majority of the funds available to the construction of up to 12 affordable housing units on property already owned by the Lancaster Housing Authority. Additional funds will be allocated to supportive services and nonprofit operating assistance and capacity building.

CITY OF LANCASTER - 2 - HOME-ARP ALLOCATION PLAN

Introduction
The City of Lancaster has been allocated $2,450,524 of HOME-American Rescue Plan Act (HOME-ARP) funding from the US Department of Housing and Urban Development (HUD).

To receive the HOME-ARP allocation the City of Lancaster must develop a HOME-ARP Allocation Plan that will become a part of the City’s PY2021 HUD Annual Action Plan by substantial amendment. The HOME-ARP Allocation Plan must include the following:

1. A summary of the consultation process and the results of consultation;

2. A summary of comments received through the public participation process and a summary of any comments or recommendations not accepted and the reason why;

3. A description of HOME-ARP qualifying populations within the jurisdiction;

4. An assessment of unmet needs of each qualifying population;

5. An assessment of gaps in housing and shelter inventory, homeless assistance and services, and homelessness prevention service delivery system;

6. A summary of planned use of HOME-ARP funds for eligible activities based on the unmet needs of the qualifying populations;

7. An estimate of the number of housing units for qualifying populations the City will produce or preserve with its HOME-ARP allocation;

8. A description of any preferences for individuals and families in a particular qualifying population or a segment of a qualifying population;

9. HOME-ARP Refinancing Guidelines; and

10. Certifications and SF-424, SF-424B, and SF-424D forms.

The following entities are responsible for preparing the Allocation Plan and those responsible for administration of the HOME-ARP grant.

Responsible Agencies
Agency Role Name Department/Agency
HOME Administrator City of Lancaster Housing & Neighborhood Revitalization

HOME-ARP Eligible Qualifying Populations and Activities HUD’s CPD Notice 21-10 Requirements for the Use of Funds in the HOME-American Rescue Plan Program establishes the requirements for funds appropriated under section 3205 of the American Rescue Plan Act of 2021 for the HOME Investment Partnerships Program (HOME) to provide homelessness assistance and supportive services.

CITY OF LANCASTER - 3 - HOME-ARP ALLOCATION PLAN

The American Rescue Plan Act (ARP) defines qualifying individuals or families, including Veterans, that are:

1. Homeless, as defined in section 103(a) of the McKinney-Vento Homeless Assistance Act;

2. At risk of homelessness, as defined in section 401 of the McKinney-Vento Homeless Assistance Act;

3. Fleeing or attempting to flee domestic violence, dating violence, sexual assault, or stalking (as defined by HUD in 24 CFR 5.2003) or human trafficking (as outlined in the Trafficking Victims Protection Act of 2000 as amended [22 USC 7102]); and

4. Part of other populations, where providing supportive services or assistance under section 212(a) of the National Affordable Housing Act 42 USC 12472(a) would:
a. Prevent a family’s homelessness;
b. Serve those with the greatest risk of housing instability.

HOME-ARP funds may be used benefit qualifying populations through:

1. Tenant-based Rental Assistance (TBRA);

2. Development and support of affordable housing;

3. Provision of supportive services;

4. Acquisition and development of non-congregate shelter;

5. Nonprofit capacity building and operating assistance; and

6. Program planning and administration.

CITY OF LANCASTER - 4 - HOME-ARP ALLOCATION PLAN

Stakeholder Consultation and Public Participation
HUD requires each HOME-ARP Participating Jurisdiction to consult with agencies and service providers whose clientele include the HOME-ARP qualifying populations. Agencies that must, at a minimum, be consulted include the Continuum of Care serving the jurisdiction’s geographic area, homeless and domestic violence service providers, veterans’ groups, public housing agencies (PHAs), public agencies that address fair housing, civil rights, and the needs or persons with disabilities.

HUD also requires that each Participating Jurisdiction provide opportunities for the public to comment on the proposed Allocation Plan, including the amount of HOME-ARP funds that will be received and the range of activities that the City may undertake.

Stakeholder Consultation
The City of Lancaster consulted with representatives from multiple agencies, groups, and organizations involved in the development of affordable housing, addressing homelessness, and the provision of services to qualifying populations in preparing this HOME-ARP Allocation Plan.

Two virtual sessions were held April 19, 2022. Representatives from multiple agencies, groups, and organizations were invited via email to attend. Those unable to attend were invited to submit written comments via emails or schedule a phone call to share their thoughts.

The virtual consultation session included an overview of the HOME-ARP notice to inform attendees of the qualifying populations and eligible activities, an opportunity to ask clarifying questions, a request for input into needs and gaps, and priority populations and activities, and an overview of the Allocation Plan timeline and process.

Two public meetings were held May 10, 2022. The public meeting was held at the Lancaster Community Center at 44611 Yucca Avenue. The afternoon session was a virtual meeting open to the public. Those unable to attend were invited to submit written comments via emails or schedule a phone call to share their thoughts.

CITY OF LANCASTER - 5 - HOME-ARP ALLOCATION PLAN

A virtual public meeting was held during a joint session of the City Council-appointed Social Equity and the Homeless Impact commissions. That meeting was open to the public and followed the City’s requirements for noticing public meetings. Those unable to attend were invited to submit written comments via emails or schedule a phone call to share their thoughts.

The public consultation session included an overview of the HOME-ARP notice to inform attendees of the qualifying populations and eligible activities, an opportunity to ask clarifying questions, a request for input into needs and gaps, and priority populations and activities, and an overview of the Allocation Plan timeline and process.

A survey instrument was designed and available online and invited representatives from multiple agencies, groups, and organizations to rank the qualifying populations and eligible activities and services in order of perceived need, and the best approach for carrying out those activities for the community.

The Los Angeles Homeless Services Authority (LAHSA), the lead agency for the Los Angeles Continuum of Care (CoC), held a virtual session to provide their recommendations to jurisdictions being allocated funds. That session was held February 6, 2022, and was attended by staff and representatives of the City. LAHSA also provided a written memorandum outlining their HOME-ARP funding recommendations The City-sponsored sessions were attended by 39 representatives of 11 agencies. The survey was completed by 34 representatives of 13 agencies. All HUD-required agency types were represented in either the virtual session, public meetings, or the online survey.

Organizations Consulted by Type and Method

Organization Consulted Type of Organization Method of
Consultation
Antelope Valley
Domestic Violence
Council dba Valley
Oasis
Nonprofit, addresses needs of qualifying
populations, including domestic violence
victims, lead agency on coordinated entry
system (CES)
Public Meeting
Virtual Session
Survey
Antelope Valley
Partners for Health
Nonprofit, addresses needs of qualifying
populations, including those at risk of
homelessness
Survey
Children's Bureau
Nonprofit, addresses needs of qualifying
populations, including homeless and those at
risk of homelessness
Survey

CITY OF LANCASTER - 6 - HOME-ARP ALLOCATION PLAN

Christian Life Assembly
Nonprofit, addresses needs of qualifying
populations, including those at risk of
homelessness
Survey
City of Lancaster
Public, addresses needs of qualifying
populations, including homeless and those at
risk of homelessness, serves as public housing
authority
Public Meeting
Virtual Session
Survey
Desert Vineyard
Church
Nonprofit, addresses needs of qualifying
populations, including homeless Virtual Session
DMH - Mental Health
Clinics
Nonprofit, addresses needs of qualifying
populations, including homeless and those at
risk of homelessness
Virtual Session
Homeless Impact
Commission
Public, addresses needs of qualifying
populations, including homeless, domestic
violence victims, civil rights, veterans, fair
housing, disabilities
Public Meeting
Hope Of The Valley
Nonprofit, addresses needs of qualifying
populations, including homeless and those at
risk of homelessness
Virtual Session
Survey
Kensington Place
Nonprofit, addresses needs of qualifying
populations, including those at risk of
homelessness
Public Meeting
Los Angeles Homeless
Services Authority
(LAHSA)
Nonprofit, addresses needs of qualifying
populations, including homeless
Agency-Sponsored
Virtual Session
Mental Health America
of Los Angeles
Nonprofit, addresses needs of qualifying
populations, including homeless and those at
risk of homelessness, including veterans
Survey
Ohana Center
Nonprofit, addresses needs of qualifying
populations, including those at risk of
homelessness
Virtual Session
Paving the Way
Foundation
Nonprofit, addresses needs of qualifying
populations, including veterans, homeless, and
those at risk of homelessness
Public Meeting
Virtual Session
Survey
Project 180
Nonprofit, addresses needs of qualifying
populations, including homeless and those at
risk of homelessness
Survey
Project Joy USA Inc.

Nonprofit, addresses needs of qualifying
populations, including veterans, homeless, and
those at risk of homelessness
Virtual Session
Survey
Social Equity
Commission
Public, addresses needs of qualifying
populations, including homeless, domestic
violence victims, civil rights, veterans, fair
housing, disabilities
Public Meeting
The People Concern
Nonprofit, addresses needs of qualifying
populations, including homeless and those at
risk of homelessness
Virtual Session
Survey

CITY OF LANCASTER - 7 - HOME-ARP ALLOCATION PLAN

Volunteers of America -
Lancaster
Nonprofit, addresses needs of qualifying
populations, including those at risk of
homelessness
Virtual Session
Youth with a Purpose
Nonprofit, addresses needs of qualifying
populations, including those at risk of
homelessness
Virtual Session

Summary of Feedback Received from Consulted Organizations Consultation revealed strong support for the following:

Development and support of affordable housing. Participants in the sessions discussed the need for additional affordable rental housing. Specific issues mentioned included the shortage of affordable housing inventory; shortage of affordable housing available to voucher holders; and competition favoring those that can meet extreme income requirements, without children, and steady jobs. Several participants noted that there are two potential projects being considered in the City: one providing affordable rental housing and one planned to convert two hotels into housing. Of respondents to the survey, 94% believed there was a high need for this activity.

Tenant-based rental assistance (TBRA). In conjunction with affordable housing, many participants mentioned the need to increase availability of the TBRA program and as a companion to the development of affordable housing. Also mentioned was the need for incentives to get and keep landlords to accept tenants. Of respondents to the survey, 68% believed there was a high need for this activity.

Acquisition and development of non-congregate shelter. Many participants mentioned the need for shelter in general and for specific populations including families, transitional age youth (TAY), those fleeing domestic violence and other situations, and senior citizens. Of respondents to the survey, 62% believed there was a high need for this activity.

Provision of supportive services. Many examples of supportive services were mentioned in the sessions including case management, help in finding temporary and permanent housing, mental health services, transportation and financial assistance. Survey respondents were asked to rate what they believed is the current need for various services eligible under HOME-ARP. Of respondents to the survey, 60% believed there was a high need for this activity. The activities with the most ratings for “high need” were housing search and counseling services and job training and employment services (both 83%), financial

CITY OF LANCASTER - 8 - HOME-ARP ALLOCATION PLAN

assistance costs (80%), mental health services (77%), and case management services (76%).

Rating of Current Need for Supportive Services
Supportive Services High Need Moderate
Need Low Need No Need
Case management services 76% 18% 6% 0%
Child Care Assistance 52% 35% 10% 3%
Credit repair services 50% 32% 15% 3%
Education Services 64% 30% 6% 0%
Financial assistance costs 80% 11% 9% 0%
Food assistance 57% 31% 11% 0%
Housing search and
counseling services 83% 17% 0% 0%
Job training and employment
services 83% 17% 0% 0%
Landlord/tenant liaison
services 65% 29% 3% 3%
Legal services 46% 40% 14% 0%
Mediation services 26% 49% 23% 3%
Mental health services 77% 20% 3% 0%
Outpatient health services 47% 38% 12% 3%
Outreach services 69% 23% 6% 3%
Services for special
populations 66% 26% 9% 0%
Substance abuse treatment 68% 24% 9% 0%
Transportation assistance 66% 31% 3% 0%
Nonprofit capacity building and operating assistance. In the survey, respondents were asked if they believed there was a need for nonprofit capacity building and operating assistance.

Of respondents to the survey, 100% responded affirmatively that there was a need in the nonprofit sector for capacity building and 97% for operating assistance.

In their memorandum and their agency sponsored virtual session, the Los Angeles Homeless Services Authority (LAHSA) recommendations for the use of HOME-ARP funds within Los Angeles County. They advocated that a “balance of resources to within the homeless services system is critical to ensure effective operations” and recommend a ration of five permanent housing resources for every interim housing bed. That balance informs their recommendations:

1. Acquisition of permanent housing resources if other funds are available to leverage for the purchase of multi-unit buildings, scattered sites properties, or individual units.

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2. Master leasing, which is not outlined in the HOME-ARP guidance but is being explored through conversations between LAHSA and HUD.

3. Supportive services that support emergency housing vouchers and services based in problem solving, prevention and diversion to prevent the need for interim housing or accessing the homeless services system.

Public Participation
To provide opportunities for public participation, the City of Lancaster sent an email to all agencies and individuals on its email list notifying them of the opportunity to participate in the virtual consultation sessions to be held on April 19, 2022. In addition to attending the virtual consultation session, they were asked to complete an online survey regarding their views of the level of need for the eligible activities and qualifying populations as described by the CPD Notice 21-10. Those unable to attend, or who had further comments after the virtual session were invited to email them directly to City staff.

A combined notice of public comment period and public hearing was published in the Antelope Valley Press on November 9, 2022. The Antelope Valley Press qualifies as a newspaper of general circulation. The public notice was published in both English and Spanish.

Efforts to Broaden Public Participation
To broaden public participation, members of the public who are on the City’s email list were also invited via email to attend the public consultation session held on May 10, 2022, in the formulation of the Allocation Plan.

Public Comments and Recommendations Received
A summary of comments and recommendation received during the public comment period and at the public hearing will be included prior to the submission of this Allocation Plan to HUD.

Public Comments and Recommendations Not Accepted and Reasons Why A summary of comments and recommendations received but not accepted and the reasons why will be included prior to the submission of this Allocation Plan to HUD.

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Needs Assessment and Gap Analysis
The needs assessment and gap analysis must evaluate the size and demographic composition of HOME-ARP qualifying populations, and unmet needs of HOME-ARP qualifying populations. In addition, the needs assessment and gap analysis must identify any gaps within its current shelter and housing inventory, and service delivery system. This needs assessment and gap analysis focuses on the following:

1. Sheltered and unsheltered homeless populations;

2. Currently housed populations at risk of homelessness;

3. Other families requiring services or housing to prevent homelessness; and

4. Those at greatest risk of housing instability or unstable housing situations.

Housing Inventory Count
The annual Housing Inventory Count (HIC) provides useful context regarding the number and type of beds and units that are available for individuals and families experiencing on any given night. The following tables summarize beds and units available as of January 2021 in the City by bed type.

Emergency housing beds include emergency shelter and transitional housing; emergency shelter generally allows for short-term or nightly stays, while transitional housing generally allows for a stay up to 24 months. Both types of emergency housing may include supportive services designed to facilitate movement to independent living.

The 2021 HIC did not include details about housing available for subpopulations.

Emergency Housing Beds Available January-October 2021
Family Units Family Beds Adult-Only
Beds
Child-Only
Beds
Total Year-
Round Beds
Emergency
Shelter 40 80 248 0 368
Transitional
Housing 0 0 30 0 30
Total
Emergency
Housing Beds
40 80 278 0 398

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Rapid rehousing provides security and utility deposits and/or monthly rental and utility assistance for rental units that rent for less than the fair market rent. Assistance is generally provided for the shortest period of time necessary for a household to gain stable housing and can range from 3 to 24 months. Permanent supportive housing provides for an unlimited lease term; residents receive services necessary to promote continued housing stability.

Rapid Rehousing and Permanent Supportive Housing Available January-October 2021 Family Units Family Beds Adult-Only
Beds
Child-Only
Beds
Total Year-
Round Beds
Rapid
Rehousing 6 24 55 0 85
Permanent
Supportive
Housing
22 82 291 0 395
Total Year-
Round Beds 28 106 346 0 480

Size and Demographic Composition of Qualifying Populations Due to the coronavirus pandemic, there was no street count conducted in 2021 to identify unsheltered homeless populations. The February 2022 Point-in-Time (PIT) count of both sheltered and unsheltered homelessness is used for this analysis.

Sheltered Homeless Populations
The 2022 sheltered Point-in-Time count identified 160 people experiencing sheltered homelessness in the City at the end of February 2022. People are considered sheltered when they are residing in emergency shelter or transitional housing, but not when they are receiving rapid rehousing assistance or residing in permanent supportive housing. Among individuals experiencing sheltered homelessness:
 145 (90.6%) were in emergency housing
 15 (9.4%) were in transitional housing
LAHSA does the official PIT count in Los Angeles County and does not publish demographics or family status.

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Unsheltered Homeless Populations
The 2022 unsheltered Point-in-Time count identified 476 people experiencing unsheltered homelessness at the end of February 2022. Among individuals experiencing unsheltered homelessness:
 114 (24%) were on the street
 41 (8.6%) were in cars
 60 (12.6%) were in makeshift shelters
 91 (19.2%) were in tents
 151 (31.7%) were in RVs
 17 (3.6%) were in vans
 2 (0.4%) were in safe parking
At-risk of Homelessness
Households at risk of homelessness are those with incomes at or below 30% AMI that lack sufficient resources or support networks to prevent homelessness, and  Have moved more than two times due to economic reasons in the past 60 days, or  Are doubled up with another household due to economic hardship, or  Will be evicted within 21 days, or
 Live in a hotel or motel without financial assistance from a nonprofit or government entity, or
 Live in an efficiency apartment and are overcrowded, or  Are exiting a publicly-funded institution or system of care The CHAS 2014-2018 Data Table 10 indicates that there are approximately 12,295 households with incomes at or below 30% AMI that are at risk of homelessness in the City.

Fleeing or Attempting to Flee Domestic Violence, Dating Violence, Sexual Assault, Stalking or Human Trafficking
The State of California Department of Justice maintains statistics on domestic violence statewide by jurisdiction. In 2020, the Los Angeles County Sherriff’s Department responded to a total of 1,381 calls related to domestic violence. Of these calls:
 212 of these domestic incidents did not involve a weapon  1,169 calls involved a weapon
o 30 domestic incidents involved a firearm

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o 26 domestic incidents involved a knife or cutting instruments o 112 domestic incidents involved other dangerous weapons o 1,001 domestic incidents involved personal weapons (i.e. feet or hands, etc.) Therefore, if each one of these calls represented a household with member(s) who required housing assistance, it can be estimated that there were up to 951 households in 2018 who were in need of some form of housing assistance. The form of housing assistance required may vary depending on the specific circumstances of each case.

Other Populations
Other populations, as defined by HOME-ARP, include those who:

1. Are currently housed and at risk of repeat homelessness;

2. Have incomes at or below 30% AMI and are experiencing severe housing cost burden; and

3. Otherwise meet the definition of at risk of homelessness and have incomes income of more than 30% and at or below 50%
Other Populations: At greatest risk of housing instability – Households with incomes <=30% AMI and experiencing housing cost burden
The 2014-2019 HUD CHAS data indicates there are 8,245 renter households with an annual income at or below 30% AMI with a cost burden that are at greatest risk of housing instability.

These renter households include:
 Two-person households, one or both of whom are age 62 or older: 60  Small families with 2-4 non-elderly people: 135
 Large families with 5 or more people: 65
 People living alone or with non-relatives who are age 62 or older: 175  People living alone or with non-relatives, none of whom are age 62 or older: 70 Other Populations: At greatest risk of housing instability – Households with incomes 30-50% AMI that meet HUD’s §91.5 definition of at risk of homelessness
Households in this category are those with incomes at more than 30% and at or below 50% AMI that lack sufficient resources or support networks to prevent homelessness, and

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 Have moved more than two times due to economic reasons in the past 60 days, or  Are doubled up with another household due to economic hardship, or  Will be evicted within 21 days, or
 Live in a hotel or motel without financial assistance from a nonprofit or government entity, or
 Live in an efficiency apartment and are overcrowded, or  Are exiting a publicly-funded institution or system of care HUD Comprehensive Housing Affordability Strategy (CHAS) 2014-2018 Data Table 10 provides information on households that include more than one family, household income level and overcrowding. The CHAS data indicates that there are approximately 2,795 households with incomes between 30 and 50% AMI that are at risk of homelessness in the City because of at least one of the housing problems as defined by HUD. In addition, 230 are living in households with more than one family.

Unmet Housing Needs of Qualifying Populations
The greatest unmet housing need of qualifying populations is the availability of affordable rental housing. As the table below shows, only 18.5% of the more than 22,000 rental units in the City are available to households with incomes at or below 50% AMI. The level of need for affordable rental units for households with incomes at or below 50% AMI is more than five times the available units, according to HUD CHAS data for 2014-2018.

Housing Needs Inventory and Gap Analysis
Available
Units
Level of
Need
HH with at
least 1 Housing
Problem
GAP
(units-level of
need)
Total Rental Units 22,190
<=30% AMI 3,595 9,180 5,580 5,585
>30% to <=50%
AMI
510 3,540 2,795 3,030
Total <=50% AMI 4,105 12,270 8,375 8,615

Unmet Service Needs of Qualifying Populations
Based on consultation with service providers in the City, the greatest unmet service needs of qualifying populations Included sheltered and unsheltered homeless populations, currently housed populations at risk of homelessness, other families requiring services or assistance to prevent homelessness, and those at greatest risk of housing instability or in unstable housing situations are:
 Housing search and counseling services

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 Job training and employment services
 Financial assistance costs
 Mental health services
 Case management services
Additional unmet service needs of qualifying populations, including sheltered and unsheltered homeless populations, currently housed populations at risk of homelessness, other families requiring services or assistance to prevent homelessness, and those at greatest risk of housing instability or in unstable housing situations include the following as described in HUD CPD Notice 2021-10, as may be amended:
 Credit repair services
 Education Services
 Food assistance
 Landlord/tenant liaison services
 Legal services
 Mediation services
 Outpatient health services
 Outreach services
 Services for special populations
 Substance abuse treatment
 Transportation assistance
Current Resources Available to Assist Qualifying Populations Current available resources include:
 Congregate beds and non-congregate shelter units;
 Supportive services; and
 Affordable and permanent supportive housing
Current Resources: Congregate Beds and Non-congregate Shelter Units In January 2021, there were 398 congregate beds and 480 beds in non-congregate shelter units. Congregate beds include emergency, safe haven, and transitional housing beds and units. Non-congregate shelter includes permanent supportive housing and rapid re-housing.

Current Resources: Supportive Services
The lead agency on coordinated entry system (CES), Valley Oasis, considers 39 agencies providing a range of supportive services as referral partners and another 20 agencies as

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participating partners in the CES system. Although Valley Oasis serves communities other than Lancaster, most of the agencies also service an area larger that Lancaster. The range of services available in the network includes mental health services, domestic violence prevention, children’s services, jobs, food assistance, education services, veterans’ services, and housing services.

Current Resources: Tenant-based Rental Assistance
The City currently does not use its HOME funds for Tenant-based rental assistance.

Current Resources: Permanent Supportive Rental Housing There are seven apartment complexes within the City that have been identified as having permanent supportive housing units. The properties offer 22 units allowing children, with 85 beds and another 291 beds not available to children.

Shelter, Housing and Service Delivery System Gaps
Shelter Gap
There is an estimated need for 476 additional shelter beds based on the 2022 PIT count. The PIT count found that there were 145 persons in emergency shelter in the City but 476 unsheltered persons in a variety of situations, including on the street, in tents or makeshift shelters, or in cars, vans or RVs/campers.

The 2022 PIT count does not define, how many were individuals, in family units, or children.

Tenant-based Rental Assistance Gap
There is an estimated gap of 7,845 tenant-based rental assistance vouchers for households with income at or below 50% AMI and paying more than 50% of household income for rent, including utilities.

Tenant-based Rental Assistance Gap
Renter Households with Income at or below 50% AMI paying more than 50% of income for rent, including utilities
7,845
TBRA vouchers available 0
TBRA gap 7,845

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Affordable Supportive Rental Housing Gap
There is an estimated gap of 5,425 rental units affordable to renter households with income at or below 30% AMI and an estimated gap of 2,480 rental units affordable to renter households with income more than 30% and equal to or less than 50% AMI.

The number of Affordable Rental Units was calculated using HUD CHAS Data Table 7 and is equal to the number of renter households’ income category paying more than 50% of household income for rent, including utilities.

Affordable Rental Unit Gap
Renter Households with Income at or below 30% AMI paying more than 50% of income for rent, including utilities
6,085
Renter Households with Income 30% to 50% AMI paying more than 50% of income for rent, including utilities
1,760
Total Affordable Rental Unit Need 7,845

Permanent Supportive Rental Housing Gap
Permanent supportive rental housing is a subset of the affordable rental housing gap, primarily for households with income at or below 30% AMI. In addition to affordable rent, permanent supportive housing provides an array of services necessary to help people with disabilities and/or experiencing chronic homelessness to retain housing stability. There is an estimated gap of 530 permanent supportive housing units in the City.

The number of Permanent Supportive Rental Housing Units needed was calculated by multiplying the current population of the City, according to the California Census 2020, by the per capita need (.003182) in California as calculated by the Corporation for Supportive Housing.

Permanent Supportive Housing Gap
Population of Lancaster Census 2020 173,516
Per capita estimate of permanent supportive housing need .003183 Estimated need for Permanent Supportive Housing 552
Permanent Supportive Housing Units Available 22
Total Permanent Supportive Housing Gap 530

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Service Delivery System Gaps
To identify gaps in the service delivery system, the City relied on its consultation with stakeholders and experience working with the organizations working in the City. The stakeholders believe that the most critical service gaps are in the areas of job training and employment services, housing search and housing counseling services, childcare, mental health services, outreach services, and case management. The stakeholders also believed there was a need for assistance with general administrative costs and building capacity among the service providers serving the City’s qualifying populations.

Characteristics of Housing Associated with Increased Risk of Homelessness for Other Populations
For other populations, severe housing cost burden, or paying more than 50% of household income for rent and utilities is the primary characteristic of housing associated with the risk of homelessness in the City. The HUD CHAS Data Table 7 indicates there are 7,845 household at or below 50% AMI who are spending more than 50% of the household income on rent and utilities.

Priority Needs for Qualifying Populations
Homeless. An article on the website policyadvice.net, The State of Homelessness in the US- 2022, uses PBS as a source for the following statistics:
 25% of homeless people have a mental illness
 38% have an alcohol abuse issue
 26% have a drug abuse issue
That information, and other research, indicates that there is a need for mental health services and substance abuse services for the homeless in the Consortium. Participants in the consultation process believed that homelessness was best served by the development of additional shelter beds, affordable housing, and TBRA assistance for housing. The priority needs for supportive services included housing search, mental health services, financial assistance, and case management.

At risk of homelessness. One of the indicators of risk of homelessness is housing cost burden. According to the National Alliance to End Homelessness, in their State of Homelessness: 2021 Edition, households experiencing a severe housing cost burden and households “doubling up” or sharing housing are both at a greater risk of homelessness than they were in 2007. They used numbers from 2019, before the COVID-19 pandemic and

CITY OF LANCASTER - 19 - HOME-ARP ALLOCATION PLAN

project that reduced work hours and elevated unemployment will have increased those at risk.

Participants in the consultation process believed those at risk of homelessness in the Consortium would benefit from additional affordable housing, TBRA assistance for housing, and supportive services offering housing counseling, fair housing, credit repair services, and eviction defense.

Fleeing or attempting to flee domestic violence, dating violence, sexual assault, stalking or human trafficking. The National Resource Center on Domestic Violence reports that domestic violence is frequently an immediate cause or precursor to homelessness and housing instability and that more than a third of domestic violence survivors report becoming homeless immediately after separating from their partners. The national Institute of Justice reports that one homeless woman in four is homeless mainly because of her experiences with violence. That violence can include categories of domestic violence, dating violence, sexual assault, stalking or human trafficking.

Participants in the consultation process believed those dealing with fleeing unsafe relationships or living situations, would benefit from supportive services offering housing counseling, mental health services, fair housing, case management services affordable housing and TBRA assistance.

Housing instability and homelessness prevention. Housing instability encompasses a number of challenges, such as having trouble paying rent, overcrowding, moving frequently, staying with friends or family, or rent burden. Those populations affected by housing instability can include children and people who have spent time in prison. According to the US Department of Health and Human Services, those affected by housing instability may live in substandard housing subjecting them to health and safety risks, live in overcrowded units, or forced moves that may result in homelessness.

Participants in the consultation process believed that housing instability, often caused by rent burden, and preventing homelessness was best addressed with affordable rental housing, TBRA assistance, non-congregate shelter, and supportive services including job training and employment services, housing search and housing counseling services, childcare, mental health services, outreach services, and case management.

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HOME-ARP Activities
The City will solicit applications from developers, service providers, and/or nonprofits to administer eligible activities and/or develop shelter and housing. A Notice of Funds Available (NOFA) will be issued. The NOFA will, at a minimum, specify eligible activities, eligible applicants, minimum and maximum funding amounts, application thresholds, and will provide instructions on how to submit a proposal. The City will not directly administer HOME-ARP activities beyond program administration and planning and no developers, service providers, and/or nonprofits are responsible for program administration and planning on behalf of the City.

Uses of HOME-ARP Funding

Activity Funding Amount Percent of
Allocation
Statutory
Limit
Non-congregate Shelter
Affordable Rental Housing $2,082,945 85%
Tenant-based Rental Assistance
Supportive Services
Nonprofit Operating Assistance 5%
Nonprofit Capacity Building 5%
Administration and Planning $367,579 15% 15%
Total HOME-ARP Allocation $2,450,524

Rationale for Uses of HOME-ARP Funding
There is need for additional projects, programs and services in all the eligible activity areas and serving the qualifying populations as evidenced by the consultation process and the needs assessment and gap analysis undertaken in the preparation of this allocation plan.

In the early 2000s, the Lancaster Redevelopment Agency (“Agency”) began purchasing numerous properties in the core of the City using low- and moderate-income housing funds.

Post redevelopment dissolution, the Lancaster Housing Authority (“Authority”) began the process of revitalization of some of these properties by demolishing dilapidated buildings, clearing the land, and preparing sites for affordable housing.

Within the past few years, the Authority has been soliciting request for proposals (RFP) from qualified firms or individuals to acquire and develop affordable housing on Authority owned land. By the end of this year, the Authority will solicit additional RFPs for the acquisition and development of affordable housing on approximately 40 acres covering several Authority owned sites.

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Coinciding with the Authority’s efforts, the City has determined that the highest and best use for this allocation, for the greatest impact in the lives of individuals and families, is to allocate 85% of the funds for the construction of affordable housing towards one of the Authority owned sites.

HOME-ARP Housing Production Goals
The City of Lancaster will provide financial assistance for the construction of up to 12 affordable rental units utilizing HOME-ARP funds. The units will be available in a range of income levels ranging from 30% AMI to 80% AMI.

Preferences
The City of Lancaster will not provide preferences to any population or subpopulation.

HOME-ARP Refinancing Guidelines
The City of Lancaster does not plan to use HOME-ARP funds to refinance existing debt secured by multifamily housing that is rehabilitated with HOME funds. Therefore, refinancing guidelines pursuant to 24 CFR 92.206(b) are not applicable to this HOME-ARP Allocation Plan.

APPENDIX A
Citizen Participation

Summary of Citizen Participation Comments

Allocation Plan Public Review and Comment Period: November 15 to December 13, 2022
A summary of comments and recommendation received during the public comment period will be included prior to the submission of this Allocation Plan to HUD.

Public Hearing before City Council: December 13, 2022
A summary of comments and recommendation received at the public hearing will be included prior to the submission of this Allocation Plan to HUD.

APPENDIX B
SF-424 Grant Applications
SF-424B Assurance
SF-424D Assurance
Allocation Plan Certifications

STAFF REPORT
City of Lancaster
PH 4
1/10/2023
JC
Date:January 10, 2023
To: Mayor Parris and City Council Members
From:Andrea Alexander, City Clerk
Subject:Amendment to Title 17 of the Lancaster Municipal Code relating to the Regulation of Collection/Donation Bins
Recommendation:

1.Introduce Ordinance No. , amending Title 17 of the Lancaster Municipal Code by amending Chapter 17.12 (Commercial Zones), and by adding a new Chapter 17.45, relating to the regulation of collection/donation bins.

2.Find that the California Environmental Quality Act does not apply to this item.

Fiscal Impact:

There may be minimal fiscal impact as a result of the enforcement of the ordinance, however, some of the enforcement costs may be recovered through the nuisance abatement process.

Background:

Donation bins, or collection bins, are generally intended for people to give or donate unwanted personal property such as clothing, shoes, books and small miscellaneous household items.

However, many bins are not regularly maintained or monitored. Unattended bins are a magnet for graffiti and illegal dumping around the bin area, provide a harborage for vermin, and create a visual blight, a detriment to the community, and a hazard to public health and safety.

Worse, unregulated bins often end up encroaching on public-right-of-way, including alleys and driveways, which poses a serious hazard to pedestrian and vehicular safety.

Staff has drafted an ordinance that will establish content-neutral and narrowly tailored regulations and operating standards for the safe and sanitary operation of collection bins on private property. The regulations apply to all donation/collection bins, regardless of whether they are owned by a charitable organization or a for-profit entity.

The proposed ordinance would provide that collection bins may be present on commercially zoned property on which at least one currently licensed business is operating. A Development 1 1
5 7
Services Director’s review and approval is required prior to placing a bin on private property. A person who currently has a collection bin on their property must either obtain Director’s review and approval or remove the bin from the premises within 60 days from the effective date of the ordinance.

The ordinance establishes location and distance requirements, to ensure that bins will not encroach on public rights-of-way or impede pedestrian and vehicle access onto the property and into the business on the premises. It also establishes minimum maintenance requirements, including regular collection of donated items from the bin, and the timely removal of graffiti, junk, trash and discarded items around the bin area.

In accordance with state law, the ordinance provides that a collection bin that does not fully comply with the ordinance constitutes a public nuisance subject to abatement. It further expressly establishes that a bin that has encroached into the public right-of-way constitutes an imminent and significant public safety hazard to pedestrians and vehicles which may be summarily abated by City personnel in accordance with the emergency abatement provisions set forth in the Municipal Code.

Attachment:

Ordinance No. _____
ORDINANCE NO.

AN ORDINANCE OF THE CITY COUNCIL OF THE CITY OF
LANCASTER AMENDING CHAPTER 17.12 (COMMERCIAL

ZONES) OF THE LANCASTER MUNICIPAL CODE BY
AMENDING SECTION 17.12.050 (ACCESSORY USES) TO
ADD SUBSECTION (J), AND ADDING CHAPTER 17.45,

RELATING TO COLLECTION BINS
WHEREAS, the City Council of the City of Lancaster finds and declares that the unregulated presence of collection bins, sometimes called donation bins, on private property often leads to bins encroaching on public rights-of-way, posing a hazard to vehicular and pedestrian safety, and
WHEREAS, the City Council further finds and declares that many collection bins located in the City are not maintained or monitored regularly, which results in the overflow of donations and the illegal dumping of junk and trash, that such bins are a magnet for graffiti and further create a harborage for vermin and pests, posing a hazard to public health and safety, creating a visual blight and a detriment to the community, causing harm to the general welfare of the citizens of the City, and
WHEREAS, in accordance with the California Welfare & Institutions Code Section 152 (relating to unattended collection boxes), the City Council finds and declares that an improperly located and/or maintained collection bin constitutes a public nuisance subject to abatement, and WHEREAS, the City Council believes that an effective way to reduce the number of unmaintained, unsightly, and potentially hazardous collection bins in the City of Lancaster is to adopt reasonable time, place and manner regulations and operating standards for owners or tenants of privately owned commercial property who desire to place a collection bin on their premises;

THE CITY COUNCIL OF THE CITY OF LANCASTER, CALIFORNIA, DOES HEREBY ORDAIN AS FOLLOWS:

SECTION 1. The City Council of the City of Lancaster hereby finds and determines that the above recitals are true and correct.

SECTION 2: Lancaster Municipal Code Chapter 17.12, Section 17.12.050 (Commercial zones, accessory uses) is hereby amended by adding subsection (J), as follows:
§17.12.050 (J) Collection bins, subject to the approval process and operating requirements set forth in Chapter 17.45 of this Code.

SECTION 3. Lancaster Municipal Code Title 17 is hereby amended by adding Chapter 17.45, as set forth in Attachment A attached hereto.

Ordinance No.

Page 2 ends

SECTION 4. That the City Clerk shall certify to the passage of this Ordinance and will see that it is published and posted in the manner required by law.

I, Andrea Alexander, City Clerk of the City of Lancaster, do hereby certify that the foregoing ordinance was regularly introduced and placed upon its first reading on the _____ day of _____________, 2023, and placed upon its second reading and adoption at a regular meeting of the City Council on the _____ day of __________, 2023 by the following vote:

AYES:

NOES:

ABSTAIN:

ABSENT:

ATTEST: APPROVED:

ANDREA ALEXANDER R. REX PARRIS
City Clerk Mayor
City of Lancaster City of Lancaster

STATE OF CALIFORNIA )
COUNTY OF LOS ANGELES ) ss

CITY OF LANCASTER )

CERTIFICATION OF ORDINANCE

CITY COUNCIL
I, __________________________, ____________________________________ City of Lancaster, California, do hereby certify that this is a true and correct copy of the original Ordinance No. , for which the original is on file in my office.

WITNESS MY HAND AND THE SEAL OF THE CITY OF LANCASTER, on this _________ day of ________________, ________.
____________________________________
(seal)
Exhibit A
Chapter 17.45
Collection Bins

17.45.010 Title.

This Chapter shall be known as the City of Lancaster’s Collection Bins ordinance.

17.45.020 Findings and declaration.

The City Council finds and declares as follows:

A. The unregulated presence of collection bins, sometimes called donation bins, on private property often leads to bins encroaching on public rights-of-way, which poses a significant hazard to vehicular and pedestrian safety.

B. Additionally, many collection bins are not regularly maintained or monitored, which results in donated items overflowing out of the bins, creating a visual blight and providing a harborage for vermin. The presence of overflowing bins and/or a proliferation of bins in a concentrated area can create the appearance of an informal dumping area and attract unintended items such as couches, appliances, and electronics. Unattended and unmaintained bins are frequently targets for graffiti and other vandalism, which further leads to blight.

C. It is the purpose and intent of the City Council to protect public health, safety and general welfare by establishing narrowly tailored and reasonable time, place and manner regulations to ensure the proper, safe and sanitary location and maintenance of collection bins in the City.

17.45.030 Definitions.

As used in this Chapter, the following words and phrases have the meanings set forth below:
“City Manager” means the City Manager of the City of Lancaster, or his or her designee. “Code” means the Lancaster Municipal Code.

“Collection bin” or “bin” means an unattended box, receptacle or similar device used for soliciting and collecting donations of salvageable personal property, whether for charitable purposes by a non-profit organization or for profit by a for-profit entity. “Person” as used in this Chapter, means and includes any individual, partnership of any kind, corporation, limited liability company, association, joint venture or other organization or entity, however formed, as well as trustees, heirs, executors, administrators, or assigns, or any combination of such persons. “Person” also includes any public entity or agency that acts as an owner in the City.
“Responsible person” means any person, whether as an owner or tenant/lessee of private property or otherwise, that allows, causes, creates, maintains, or permits a nuisance collection bin to exist on or adjacent to their premises, by any act or the omission of any act or duty. The actions or inactions of a responsible person's agent, employee, representative or property manager may be attributed to that responsible person.
“Salvageable personal property” means new or used items such as clothing, shoes, books, and miscellaneous household items.

17.45.040 Director’s review and approval required.

It is unlawful for any person to store, maintain, or allow a collection bin without having first obtained a director’s review and approval. A person must have an approval in good standing at all times a collection bin is on a person’s premises.

17.45.050 Application for director’s review; Denial, revocation, conditioning; Obtaining approval for bins currently on property.

A. A person seeking to store, maintain or allow a collection bin on his/her property shall submit an application for a director’s review in accordance with the provisions set forth in Chapter 17.32, Article VI of this Code.

B. The application review and approval, denial, conditioning, suspension and/or revocation processes, and all administrative remedies, shall be in accordance with Chapter 17.32.

An approval is also subject to modification or denial if the information submitted pursuant to Subsection C of this Section is incomplete or does not reflect that the placement or maintenance of the collection bin will comply with the standards set forth in this Chapter. Further, an approval may be denied or revoked in the event of any of the following conditions:
1) The property has contained graffiti within six months prior to the application submittal that has not been timely removed in accordance with this Code; 2) The property has had conditions or uses in violation of the Lancaster Municipal Code within six months prior to the application submittal which were not timely corrected or abated in accordance with a notice of violation, administrative citation, or compliance letter;
3) The applicant has been found to be in violation of the requirements of this Chapter within one year of the application submittal.

C. In addition to the requirements set forth in Chapter 17.32, Article VI, the applicant shall also submit the following information/documentation, which is subject to the approval, modification and/or denial of the City Manager:
1) The collection bin operator's contact information, including name, address, email, website (if available), and telephone number.
2) If the operator holds itself out as a non-profit organization, a statement that it meets the definition of nonprofit organization in Section 501(c)(3) of the United States Internal Revenue Code or Section 150(c) of the California Welfare and Institutions Code.
3) If the operator holds itself out as a for-profit organization, a statement that it holds a valid Certificate of Good Standing issued by the California Secretary of State.
4) If the operator and the owner of the lot on which the collection bin will be located are the same person or entity, written acknowledgment that the operator understands that they are liable for violations of this subdivision. If the operator and the owner of the lot on which the collection bin will be located are different persons or entities, written acknowledgment signed by both parties that both understand that they are jointly and severally liable for violations of this subdivision.
5) A site plan identifying the following:
i. Boundaries of the parcel on which the bin will be located; ii. Location of all structures on the parcel;
iii. Proposed bin location;
iv. Distance from the proposed bin location to the lot lines and the nearest structures on the parcel;
v. Locations and dimensions of all existing and proposed driveways, landscaped areas, easements, and parking space on the parcel. 6) Diagram and/or description of the bin including the height, width, depth, and general appearance of the bin, and the materials of which the bin is fabricated. 7) Diagram and/or description of the proposed locking mechanism. 8) Description of the maintenance plan, including the pick-up schedule to be not less than weekly, and graffiti, litter and trash removal on and around the collection bin;
9) Any other information regarding time, place and manner of the collection bin’s operation, placement, and maintenance that the City Manager deems reasonably necessary to evaluate the proposal’s consistency with the requirements of this Chapter.

D. A person on whose property a collection bin is already located as of the effective date of this ordinance shall legalize the bin by applying for and obtaining director’s review and approval as set forth in this Section, or shall remove the bin from the premises, within sixty (60) calendar days from the effective date of this ordinance.

17.45.060 Location, distance requirements of collection bins.

A. Collection bins are permissible only Commercially zoned property on which at least one currently licensed business is operating.

B. No collection bin shall be located within the following distances:
1) 20 feet of any public right-of-way;
2) 10 feet of any lot line adjoining another lot;
3) 100 feet of a residentially zoned parcel.

C. No collection bin shall be located on or within the following:
1) The public right-of-way, including alleys and sidewalks; 2) Any area designated for landscaping.

D. No collection bin shall be located in, or block or impede access to any of the following:
1) Required parking or driveway areas;
2) Pedestrian routes;
3) Emergency vehicle routes;
4) Building ingress and egress;
5) Required accessibility routes;
6) Required easements;
7) Trash enclosure areas or access to trash bins or trash enclosures; 8) Any place that would impede the functioning of exhaust, ventilation or fire extinguishing systems.

E. No more than one collection bin shall be located on any lot.

17.45.070 Physical Attributes.

A. Collection bins shall be fabricated of durable and waterproof materials.

B. Bins shall be placed on a paved, non-sloping surface.

C. Bins shall have a tamper-resistant locking mechanism.

D. Bins shall not exceed dimensions of 80 inches in height, 50 inches in depth, and 60 inches in width.

E. Collection bins shall be provided a light source to provide illumination between sunset and sunrise.

F. Bins shall have the following information conspicuously displayed in at least two-inch type visible from the front of the collection bin:
1) Bin operator’s name, 24-hour telephone number, and address of the lot on which the bin is licensed to be located;
2) A statement that no material shall be left outside the collection bin; 3) A statement that either reads “this collection bin is owned and operated by a for-profit organization” and that clearly describes the charitable cause that will benefit from the donations, or “this collection bin is owned and operated by a nonprofit organization” and that clearly states “this donation is not tax deductible.”

17.45.080 Operational and maintenance standards.

A. Collection bins shall be maintained in good working order, and free from graffiti, removed or damaged requisite signs and notifications, peeling paint, rust, and broken collection operating mechanisms.

B. No overflow collection items, litter, debris or dumped materials shall be allowed to accumulate within twenty feet of any collection bin.

C. Collection bins shall be serviced not less than weekly. Servicing includes removal of the collected items, maintenance of the bin, and abatement of any graffiti, litter or other nuisance conditions in, on or around the collection bin.

D. The operator shall maintain an active email address and a telephone with 24-hour recording capability for the public to register complaints.

E. Any conditions that are in violation of this Chapter must be abated or corrected within 48 hours of being reported to bin operator and/or property owner.

17.45.090 Violation; public nuisance; penalty; administrative citations.

A. The City Council finds and declares that it is unlawful for any responsible person, as defined in this Chapter, to allow, cause, create, suffer or permit the presence of a collection bin on or around his or her property in a location or manner that is in violation of this Chapter.

B. The City Council finds and declares that a collection bin that does not fully comply with this Chapter constitutes a public nuisance subject to abatement.

C. Any person violating the provisions of this Chapter is subject to the penalty provisions set forth in Chapter 1.12.

D. A responsible person violating the provisions of this Chapter may additionally be issued an administrative citation in accordance with the provisions set forth in Chapter 1.16.

17.45.100 Abatement; emergency abatement of an imminently hazardous collection bin.

A. The City Manager may cause a nuisance collection bin to be abated, in accordance with the procedures set forth in Chapter 8.28 of this Code.

B. The City Council finds and declares that a collection bin that has encroached into the public right-of-way, including alleys and sidewalks, constitutes a significant hazard to pedestrians and vehicles and therefore is deemed an imminent public safety hazard. The City Manager is authorized to utilize the procedures set forth in section 8.28.170 of this Code for the emergency abatement of such a bin.

17.45.110 Remedies not exclusive.

A. Any administrative citation pursuant to this Chapter shall not prejudice or adversely affect any other civil, administrative or criminal action that may be brought to abate a nuisance collection bin or to seek compensation for damages suffered. A criminal or civil action may be brought concurrently with any other process regarding the same violation.

B. A nuisance collection bin may be abated through the revocation or suspension of the director’s review approval, in accordance with the provisions set forth in Chapter 17.32, Article VIII of this Code.

17.45.120 Severability.

If any section, subsection, paragraph, sentence, clause or phrase of this Chapter is declared by a court of competent jurisdiction to be unconstitutional or otherwise invalid, such decision shall not affect the validity of the remaining portions of this Chapter. The City Council declares that it would have adopted this Chapter, and each section, subsection, sentence, clause, phrase or portion thereof, irrespective of the fact that any one or more sections, subsections, phrases, or portions be declared invalid or unconstitutional.

Lancaster City CouncilJanuary 10, 2023

Lancaster City Council
January 10, 2023