DATE:
September 8, 2026
CATEGORY:
Consent
DEPT.:
Housing
TITLE: Accept and Appropriate Permanent Local
Housing Allocation (PLHA) Funds for
Affordable Housing Projects and
Programs
RECOMMENDATION
Adopt a Resolution of the City Council of the City of Mountain View: (1) Accepting and Appropriating $388,515 in 2022- 2023 Permanent Local Housing Allocation (“PLHA”) Program Funds From the State of California in the Permanent Local Housing Allocation Subf und; (2) Appropriating $336,483 of the 2022-2023 PLHA Program Funds in the Permanent Local Housing Allocation Subfund to the 96 West El Camino Real Affordable Housing Project; (3) Appropriating $142,036 in PLHA Program Funds in the Permanent Local Housing Allocation Subfund to the Homeownership Assistance Pilot Program, Consisting of the Reappropriation of $110,000 in 2019-2021 PLHA Funds and the Appropriation of $ 32,036 in 2022-2023 PLHA Funds ; (4) Authorizing the Use of $74,132 in PLHA Program Funds for Eligible Administrative Costs, Consisting of the Reappropriation of $54,136 in 2019-2021 PLHA Funds and the Appropriation of $19,996 in 2022-2023 PLHA Funds; and (5) Reducing the E xisting Housing Impact Fund Appropriation for the 96 West El Camino Real Affordable Housing Project by $ 336,483, from $7,070,000 to $6,733,517, R eflecting the Replacement of T hese Funds with 2022 -2023 PLHA Funds, to be read in title only, further reading waived (Attachment 1 to the Council report). (Five votes required)
BACKGROUND
Application for State PLHA Program Funds
On October 25, 2022, the City Council adopted Resolution No. 18721 authorizing submission of an application to the California Department of Housing and Community Development (HCD) for funding through the Permanent Local Housing Allocation (PLHA) Program. The PLHA Program is a five-year state grant program spanning 2019 through 2023 that provides funding for a variety of eligible activities to increase the supply of housing affordable to households earning at or below 120% of the Area Median Income (AMI). As part of the application, the City Council approved allocating PLHA funds to a multi-family affordable housing development and a Below- Market-Rate (BMR) Downpayment Assistance Pilot Program, both eligible PLHA activities. The City was awarded $1,094,136 in PLHA funds for the first three allocation years (2019 -2021). An
Accept and Appropriate Permanent Local Housing Allocation (PLHA) Funds for Affordable Housing Projects and Programs
September 8, 2026
agreement with HCD was executed on June 20, 2023, establishing the terms and conditions of the award.
Appropriation of 2019-2021 State PLHA Program Funds
On February 13, 2024 , the City Council adopted R esolution No. 18866 accepting and appropriating the PLHA award. Through this resolution, $930,000 was appropriated to the 96 West El Camino Real affordable housing project, a 79 -unit development by Danco Housing that will serve households earning between 30% and 60% of the AMI. The City's previously approved $8 million Housing Impact Fund contribution to the project was reduced by an equivalent amount, resulting in a revised Housing Impact Fund contribution of $7,070,000. This reappropriation freed up $930,000 in local housing funds to be used for future affordable housing developments.
Resolution No. 18866 also appropriated $110,000 for the development and implementation of a Below-Market-Rate (BMR) Downpayment Assistance Pilot Program to provide closing cost assistance to income-eligible households purchasing BMR ownership units . This allocation was based on direction provided by the City Council during the June 14, 2022 Housing Element Study Session and the August 30, 2022 Affordable Housing Study Session, where expanding homeownership opportunities was identified as a priority and staff were directed to explore funding options to support homeownership.
The remaining $54,136 was authorized to be used for administrative costs associated with implementing eligible PLHA-funded activities.
The Downpayment Assistance Pilot Program and administrative funds were not expended during the fiscal year in which they were received and were not carried forward as part of the City’s adopted budget. As a result, City Council action is required to reappropriate the funds and make them available for expenditure . Accordingly, this staff report includes recommendations to reappropriate both the Downpayment Assistance Pilot Program and administrative funds from the 2019-21 State PLHA Program funds.
ANALYSIS
On June 27, 2025, HCD awarded the City $388,515 in PLHA funds for the remaining two allocation years (2022 -2023), thereby increasing the total five -year award amount from $1,094,136 to $1,482,651. An amended agreement with HCD for the full five-year award was executed on April 2, 2026.
Accept and Appropriate Permanent Local Housing Allocation (PLHA) Funds for Affordable Housing Projects and Programs
September 8, 2026
Multi-Family Affordable Housing Development
Consistent with the City's approved application and eligible uses, staff recommend appropriating $336,483 of the 2022- 2023 PLHA Program allocation to the 96 West El Camino Real affordable housing project. Use of PLHA funds for the project is consistent with the City's affordable housing strategy to maximize leverage of non-City funds to support the City’s affordable housing pipeline.
Staff is working with the developer to complete the financing for the project, including the PLHA funding discussed in this report and the tax -exempt bond financing presented in a separate Consent Calendar item on the September 8, 2026 Council agenda for this project , to facilitate a targeted construction start in March 2027.
Staff also recommends that the City Council reduce the City's Housing Impact Fund contribution to the 96 West El Camino Real affordable housing project by $336,483. This reduction would allow the local housing funds to be redirected to other affordable housing projects, maximize the City's limited housing resources, and be consistent with the local funding reduction action taken on February 13, 2024 as noted in the Background section.
Homeownership Assistance Pilot Program (formerly called Downpayment Assistance Pilot Program)
Consistent with the City's approved PLHA application and prior City Council direction , staff recommends appropriating an additional $32,036 from the 2022-2023 PLHA award allocation to the Downpayment Assistance Pilot Program. Staff also recommends refocusing and renaming the program as described below.
Initially, t he program was intended to expand homeownership opportunities by providing downpayment and/or closing cost assistance to income -eligible homebuyers. While originally envisioned to assist purchasers of Below-Market-Rate (BMR) ownership units, there are currently only 14 BMR ownership units in the City, which significantly limits the pool of potential program participants. S taff recommends broadening the proposed program to include income-eligible non-BMR homebuyers to increase program utilization and meet PLHA expenditure deadlines.
Additionally, the City is in the process of developing a comprehensive Low- and Middle-income Homeownership Strategy (Strategy), which is anticipated to come to Council for consideration in December 2026. Staff research to-date indicates that a downpayment assistance program would require significantly more funding than is available from the PLHA allocation if such a program were to make an impact for homebuyers and be cost effective to administer . Therefore, staff recommends that the program focus on closing cost assistance and that the name be changed from Downpayment Assistance Pilot Program to Homeownership Assistance Pilot Program (HAPP). The HAPP aligns with PLHA requirements, as well as with the policies and programs that Accept and Appropriate Permanent Local Housing Allocation (PLHA) Funds for Affordable Housing Projects and Programs
September 8, 2026
are anticipated to be included in the Strategy. Staff anticipates finalizing and implementing the HAPP by the second quarter of 2027 after the Strategy is adopted.
The additional PLHA funds will support implementation of the program and advance the City Council's goal of expanding homeownership opportunities for low- and moderate -income households.
As discussed above, $110,000 of the City’s 2019-2021 PLHA funds are being recommended for reappropriation to this program so that they may be used for their intended purpose.
Administration
The City plans to use up to $ 19,996 of the 2022-2023 PLHA award allocation for administrative costs related to the execution of eligible activities, as allowed under the PLHA guidelines. As discussed above, $ 54,136 of the City’s 2019- 2021 PLHA funds are also being reappropriated to make them available for administrative costs.
FISCAL IMPACT
The recommended actions have no financial impact on the General Fund. Acceptance and appropriation of the $388,515 2022-2023 PLHA award will provide $336,483 for the 96 West El Camino Real affordable housing project, $32,036 for the Homeownership Assistance Pilot Program, and $19,996 for eligible administrative costs.
The $336,483 in PLHA funds appropriated to the 96 West El Camino Real affordable housing project will replace an equivalent amount of previously appropriated Housing Impact Funds .
Accordingly, the Housing Impact Fund appropriation for the project will be reduced from $7,070,000 to $6,733,517, with no net change to the project budget. This funding substitution will make $336,483 in Housing Impact Funds available for future City affordable housing projects and initiatives.
The recommended actions will also reappropriat e $164,136 in previously appropriated 2019 - 2021 PLHA funds, consisting of $110,000 for t he Homeownership Assistance Pilot Program and $54,136 for eligible administrative costs . These funds were previously appropriated by the City Council; however, the appropriation expired at the end of the fiscal year and was not carried forward. Reappropriation is therefore necessary to make the remaining PLHA funds available for these eligible uses.
Accept and Appropriate Permanent Local Housing Allocation (PLHA) Funds for Affordable Housing Projects and Programs
September 8, 2026
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
Please see below for information about whether the recommended action for this agenda item is subject to or exempt from the Levine Act.
EXEMPT FROM THE LEVINE ACT
☒ General policy and legislative actions
ALTERNATIVES
1. Do not accept the funds for the Permanent Local Housing Allocation award.
2. Provide other direction.
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
Julie Barnard
Affordable Housing Manager
Approved by:
Wayne Chen
Housing Director
Audrey D. Seymour
Assistant City Manager
Attachment: 1. Resolution