DATE:
February 25, 2025
CATEGORY:
Consent
DEPT.:
Housing
TITLE: Appropriating Local Housing Trust Fund
and Prohousing Incentive Program
Awards to Affordable Housing Projects
RECOMMENDATION
Adopt a Resolution of the City Council of the City of Mountain View: (1) Reducing the Previous Appropriation of $8,400,000 from the Housing Department’s Below- Market-Rate In -Lieu Fees Housing Subfund (BMR Fund) for the 1012 Linda Vista Avenue Project by $1,600,000 (Five votes required); (2) Reducing the Previous Appropriation of $11,100,000 from the BMR Fund for the 1020 Terra Bella Avenue Project by $3,226,500 (Five votes required); (3) Appropriating $2,400,000 from the City of Mountain View Housing Department’s City Local Housing Trust Subfund (City LHTF) to the 1020 Terra Bella Avenue Affordable Housing Project, $1,600,000 from the City LHTF to the 1012 Linda Vista Avenue Affordable Housing Project, and $205,452 from the City LHTF for Eligible Administrative Costs (Five votes required); (4) Accepting and Appropriating a State of California Prohousing Incentive Program ( PIP) Round 2 Grant in the Amount of $870,000 to the Housing Department’s General Housing Subfund; (5) Allocating $826,500 of the PIP Round 2 Grant Funds to the 1020 Terra Bella Avenue Affordable Housing Project ; and (6) Authorizing Use of $43,500 of the PIP Round 2 Grant Funds for Eligible Administrative Costs, to be read in title only, further reading waived (Attachment 1 to the Council report).
BACKGROUND
On August 30, 2022
, the City Council held a Study Session to provide direction on the 2022 -27 Affordable Housing Strategic Plan. Staff highlighted that the City has a project pipeline of 12 100% Affordable Housing projects with an estimated funding gap of at least $50 million. At the Study Session, Council unanimously supported Strategy 1, “Develop an affordable housing funding strategy to significantly increase resources to achieve the City’s affordable housing pipeline,” and Strategy 1.b.4, “Seek partnerships with public agencies.”
One approach to increasing resources has been to leverage City funding commitments to secure additional grant funding from state and federal sources. Over the past two years, Housing Department staff ha s submitted several grant applications. T he City has been awarded $6.2 million in state grants and $3.3 million in federal grants so far for a total of $9.5 million.
Appropriating Local Housing Trust Fund and Prohousing Incentive Program Awards to Affordable Housing Projects
February 25, 2025
This Council item focuses on two pipeline projects (1012 Linda Vista Avenue and 1020 Terra Bella Avenue) and two recent state funding awards (Local Housing Trust Fund and Prohousing Incentive Program) that require specific steps to be taken to effectuate the grant funding and advance each project. Both state programs are administered by the Department of Housing and Community Development (HCD).
Local Housing Trust Fund—Actions To Date
In 2017, the California Legislature approved Senate Bill (SB) 3, which authorized the Veterans and Affordable Housing Bond Act of 2018. One of the housing programs funded by SB 3 is the HCD Local Housing Trust Fund (HCD LHTF) Program. The goal of the HCD LHTF Program is to expand funding sources for housing, increase the supply of affordable housing through the creation of new local housing trust funds, and support ongoing operations of existing local housing trust funds. The City has taken the following actions to related to HCD LHTF funds:
• May 9, 2023
—City Council approved:
— Resolution authorizing the City to submit an application for $5 million to HCD for the 2023 HCD LHTF Program.
— Establishing a City of Mountain View Local Housing Trust Fund (City LHTF) account and transferring $5 million from the City’s Housing Impact Funds to the newly created account as required local matching funds.
• October 2, 2023— HCD awarded the City $4,205,452 in HCD LHTF funding for the construction of affordable housing developments in the City’s pipeline.
• January 16, 2024—City entered into a standard agreement with HCD.
• February 13, 2024—Council approved a resolution to accept and appropriate the HCD LHTF grant award for the following uses:
Table 1: Summary of HCD LHTF Grant Allocation
Funding Use Funding Amount
1012 Linda Vista Avenue Project $1,600,000
1020 Terra Bella Avenue Project 2,400,000
Administrative costs 205,452
Total HCD LHTF grant $4,205,452
Appropriating Local Housing Trust Fund and Prohousing Incentive Program Awards to Affordable Housing Projects
February 25, 2025
Per HCD LHTF program guidelines, all grant funds allocated to a project must be matched dollar for dollar by the City LHTF. As noted above, the City LHTF was established with $5 million in funding to serve as local matching funds. Therefore, the remaining step to effectuate the HCD LHTF funding and meet program guidelines is for the City to appropriate $4,205,452 from the City LHTF to fully match the HCD LHTF grant award n oted above ( also related to Recommendation Nos. 1, 2, and 3 and as discussed in further detail in the Analysis section below).
Prohousing Incentive Program—Actions to Date
The Prohousing Incentive Program (PIP) is a state investment from the Building Homes and Jobs Trust Fund created through SB 2 in 2017 to increase the supply of affordable housing. The PIP is available only to jurisdictions that have received the state’s Prohousing Designation. 1 HCD released the first round of PIP funding in 2023. At that time, the City had not yet received the Prohousing Designation and was, therefore, not eligible to apply.
On January 23, 2024, HCD released a Notice of Funding Availability (NOFA) for the second round of PIP funding totaling $9.5 million. The City received the Prohousing Designation at the end of that same month, which allowed an application to be submitted. The City has taken the following actions to related to the PIP:
• February 27, 2024
—The City Council approved a resolution authorizing submittal of a PIP application to advance the affordable housing project at 1020 Terra Bella Avenue.
• July 8, 2024 —HCD awarded the City $870,000 in PIP Round 2 funding. Of that award amount, up to 5%, or $43,500, can be used to cover administrative costs for the grant per PIP regulations.
• November 26, 2024—The City entered into a standard agreement with HCD.
HCD regulations stipulate that PIP Round 2 funds must be expended by June 30, 2026. In order to expend the funds, the City Council must accept the PIP Round 2 grant award, appropriate it to an eligible project , and reduce the commitment from City funds by the grant award amount.
Therefore, the remaining step to accept and appropriate the PIP funding and meet program guidelines is as follows (also related to Recommendation No s. 2 and 4 and as discussed in further detail in the Analysis section below):
1 The Prohousing Designation is designed to recognize jurisdictions that have enacted or proposed policies that accelerate housing development and are in alignment with broader state goals. As of December 16, 2024, there are 52 cities and counties in California that have received the designation, and Mountain View remains the only recipient in Santa Clara County.
Appropriating Local Housing Trust Fund and Prohousing Incentive Program Awards to Affordable Housing Projects
February 25, 2025
Table 2: Summary of PIP Round 2 Grant Allocation
Funding Use Funding Amount
1020 Terra Bella Avenue Project $826,500
Administrative costs 43,500
Total HCD LHTF grant $870,000
ANALYSIS
1012 Linda Vista Avenue
Table 3 provides a summary of the City funding (BMR funds) and HCD LHTF award that have been appropriated for 1012 Linda Vista Avenue (Column 2 in Table 1), for a total of $10 million . The current appropriation does not include the required City LHTF match discussed in the Background section.
To effectuate the City LHTF match and to meet state program requirements, staff recommends that Council:
1. Reduce the current BMR funding from $8,400,000 to $6,800,000 ($1,600,000 reduction) (Recommendation No. 1); and
2. Appropriate $1,600,000 from the City LHTF to match the HCD LHTF award (Recommendation No. 3).
These steps will allow the project to retain the same level of overall funding ($10,000,000), meet the HCD LHTF match requirement, and free up BMR funds to be redeployed to other affordable housing projects in the pipeline. Table 3, Column 3 summarizes the Recommended Appropriation.
Table 3: Current and Recommended Funding Appropriations for 1012 Linda Vista Avenue
Funding Source Current
Appropriation
Recommended
Appropriation
Appropriation Change
BMR Fund $ 8,400,000 $ 6,800,000 ($1,600,000)
Recommendation 1
HCD LHTF Award 1,600,000 1,600,000 N/A
City LHTF Match -0- 1,600,000 $1,600,000
Recommendation 3
TOTAL $10,000,000 $10,000,000 $0
Appropriating Local Housing Trust Fund and Prohousing Incentive Program Awards to Affordable Housing Projects
February 25, 2025
1020 Terra Bella Avenue
Table 4 provides a summary of the City funding (BMR funds) and HCD LHTF award that have been appropriated for 1020 Terra Bella Avenue (Column 2), for a total of $1 3,500,000. The current appropriation does not include the required City LHTF match or the PIP funding discussed in the Background section.
To effectuate the City LHTF match , PIP funding , and meet state program requirements for the project, staff recommends that Council:
1. Reduce the current BMR funding from $11,100,000 to $7,873,500 ($3,226,500 reduction) (Recommendation No. 2);
2. Appropriate $2,400,000 from the City LHTF to match the HCD LHTF award (Recommendation No. 3); and
3. Accept and appropriate $826,500 from the PIP Round 2 grant award (Recommendation No. 4).
These steps will allow the project to retain the same level of overall funding ($13,500,000), meet the HCD LHTF match requirement, implement the PIP funding, and free up BMR funds to be redeployed to other affordable housing projects in the pipeline. Column 3 in Table 4 summarizes the Recommended Appropriation.
Table 4: Current and Recommended Funding Appropriations for 1020 Terra Bella Avenue
Funding Source Current
Appropriation
Recommended
Appropriation
Appropriation Change
BMR Fund $11,100,000 $ 7,873,500 ($3,226,500)
Recommendation 2
HCD LHTF Award $2,400,000 2,400,000 N/A
City LHTF Match -0- 2,400,000 $2,400,000
Recommendation 3
PIP Round 2 Award -0- 826,500 $826,500
Recommendation 4
TOTAL $13,500,000 $13,500,000 $0
Appropriating Local Housing Trust Fund and Prohousing Incentive Program Awards to Affordable Housing Projects
February 25, 2025
Administration
As discussed in the Background section, staff recommends the following appropriations to cover administrative costs associated with implementing the LHTF and PIP programs:
• LHTF Program: $205,452 in City LHTF matching funds for administrative costs associated with executing eligible activities in accordance with the LHTF guidelines (Recommendation 3). This amount will match the HCD LHTF grant allocation for administrative costs.
• PIP Program: $43,500 for administrative costs associated with executing eligible activities, in accordance with the PIP guidelines (Recommendation 4).
NEXT STEPS
• LHTF Program: If Council approves staff’s recommended appropriations for the City LHTF match funding, staff will coordinate with HCD to receive the HCD LHTF grant funds for the two projects at 1012 Linda Vista Avenue and 1020 Terra Bella Avenue as well as for administrative costs.
• PIP Program: If Council approves staff’s recommended appropriations for the PIP Round 2 award allocation, staff will coordinate with HCD to receive the PIP funding for 1020 Terra Bella Avenue as well as for administrative costs.
ALTERNATIVES
1. Do not accept the award of PIP funds.
2. Accept the award of PIP Round 2 funds but do not appropriate them to the affordable housing project at 1020 Terra Bella Avenue, identify an alternate use of the funds, and direct staff to amend the original grant application.
3. Provide other direction to staff.
FISCAL IMPACT
The recommended actions have no fi scal impact on the General Fund. R educing the appropriation of BMR funds for the 1012 Linda Vista Avenue project by $1,600,000, reducing the appropriation of BMR funds for the 1020 Terra Bella Avenue project by $ 3,226,500, and appropriating City LHTF matching funds and PIP Round 2 grant funds in the same amount s will Appropriating Local Housing Trust Fund and Prohousing Incentive Program Awards to Affordable Housing Projects
February 25, 2025
free up $ 4,826,500 in BMR funds, allowing the City to redeploy the funds to other affordable housing projects in the pipeline.
LEVINE ACT
California Government Code Section 84308 (also known as the Levine Act) prohibits city officials from participating in any proceeding involving a “license, permit, or other entitlement for use” if the official has received a campaign contribution exceeding $500 from a party, participant, or agent of a party or participant within the last 12 months. The Levine Act is intended to prevent financial influence on decisions that affect specific, identifiable persons or participants. For more information see the Fair Political Practices Commission website:
www.fppc.ca.gov/learn/pay-to-
play-limits-and-prohibitions.html
An “X” in the checklist below indicates that the action being considered falls under a Levine Act category or exemption:
EXEMPT FROM THE LEVINE ACT
_X_ General policy and legislative actions
_X_ Contract between two or more state or local government agencies
CONCLUSION
In August 2022, a City Council Study Session resulted in the support of a funding strategy to increase resources to achieve the City’s affordable housing pipeline. Since then, the Housing Department has successfully applied for several state and federal grant funding opportunities.
HCD has awarded the City $4,205,452 in LHTF funding and $870,000 in PIP Round 2 funding.
Additionally, as a requirement of receiving the HCD LHTF award, the City created the City LHTF and deposited $5 million in match funding. The approved use for both the LHTF and PIP funds is the development of affordable housing in the City.
City staff recommends that Council appropriat e these funds to the affordable housing projects located at 1020 Terra Bella Avenue and 1012 Linda Vista Avenue and to cover administrative costs. This will allow the City to meet the HCD LHTF match requirement, implement the PIP funding, and free up BMR funds to be redeployed to other affordable housing projects in the pipeline.
Appropriating Local Housing Trust Fund and Prohousing Incentive Program Awards to Affordable Housing Projects
February 25, 2025
PUBLIC NOTICING
The meeting agenda and Council report have been posted on the City’s website and announced on Channel 26 cable television.
Prepared by:
Alec Vybiral
Housing Officer
Harsha Ramchandani
Housing Officer
Julie Barnard
Affordable Housing Manager
Approved by:
Wayne Chen
Housing Director
Audrey Seymour Ramberg
Assistant City Manager
AV-HR-JB/6/CAM
850-02-25-25CR
204379
Attachment: 1. Resolution