Housing & Community
Development
Council Budget Discussion
Emily Weinstein , Interim Director
Chris Norman , Chief of Staff
Lilian Falkin , Administrative Services Manager
May 30, 2023
1 Contents
Part 1 : HCD Staffing and Budget
Part 2: Mayoral Budget
Part 3 : Structural Challenges & Solutions
Part 4: Reorganization Opportunities
2 HCD Mission
The Housing and Community
Development Department (HCD) is
dedicated to improving Oakland's
neighborhoods and to ensuring all
Oaklanders have safe and
affordable housing.
V i s t a E s t e ro , an H C D- F u n d e d A f f o rd ab l e H o u s i n g P ro j e c t ( M i d P e n H o u s i n g)
3 Staffing
and
Budget
4 Division Unit Total FTE Budget (in
millions)*
Housing
Development
Housing
Development
Services
16.00 134.66
Residential Lending
Services
12.50 4.55
Community
Development
Community
Development and
Engagement
11.00 4.49
Rent Adjustment
Program
28.00 7.08
Department
Administration
Fiscal Services
15.00 7.23Administration
Total 82.50 158.01
FY2023-2024 Budget- Mayor's Budget
5 HCD 2023 – 2025 Budget
Sources (in millions)
Fund and Description FY 2023-24 FY 2024-25
1010 - General Fund: General Purpose $ 1.24 $ 11.38 1870 - Affordable Housing Trust Fund (Boomerang) $ 12.76 $ 14.28 1882 - Multi Service Center/Rent $ - $ 0.11
1885 - 2011A-T Subordinated Housing $ 0.75 $ 0.75 2103 - HUD-ESG/SHP/HOPWA $ - $ 13.68
2108 - HUD-CDBG $ 6.73 $ 7.80
2109 - HUD-Home $ 2.94 $ 2.92
2144 - California Housing and Community Development $ 22.43 $ 18.65 2159 - State of California Other $ - $ 6.12
2160 - County of Alameda: Grants $ - $ 0.49
2413 - Rent Adjustment Program Fund $ 7.86 $ 9.76 2423 - Jobs Housing Impact Fee Fund $ 4.98 $ 0.83
2424 - Affordable Housing Impact Fee Fund $ 3.48 $ 3.00 2826 - Mortgage Revenue $ 0.37 $ 0.09
2830 - Low and Moderate Income Housing Asset Fund $ 26.47 $ 5.99 5333 - Measure KK: Affordable Housing Series 2020B-2 (Taxable) $ - $ - 5340 - Measure U: Affordable Housing and Infrastructure GOB $ 68.00 $ 52.00 Agency-wide Total $ 158.01 $ 154.58
6 HCD 2023 – 2025 Budget
Uses (in millions)
Category by Org FY 2023-24 FY 2024-25
Program (O&M) by Org Proposed Proposed
89919 - Admin & Fiscal 2.58 1.76
89929 - Housing Development 131.40 86.44
89939 – Residential Lending 1.45 1.45
89949 - CDE 1.74 1.58
89969 - RAP 0.33 1.11
89411 - Community Hsg Serv. 33.34
Subtotal – Program (O&M) 137.50 125.68
Personnel by Org
89919 - Admin & Fiscal 3.86 4.49
89929 - Housing Development 2.52 3.53
89939 – Residential Lending 2.52 2.69
89949 - CDE 2.24 2.43
89969 - RAP 5.43 6.34
89411 - Community Hsg Serv. 4.23
Subtotal - Personnel 16.57 23.71
OH, & ISF (department-wide) 3.94 5.19
Subtotal - Personnel, OH, & ISF 20.51 28.9
Agency-wide Total 158.01 154.58
7 HCD 2023 – 2024 Budget
• HCD budget proposal did not consider merger w/CHS
• Mayor's budget includes staff changes:
• 4 positions added to Housing Development Services due to increased number of projects • 4 add/deletes to support restructuring (focus on ACAH preservation projects) • Mayor's budget continues existing service levels & increases capital budget with:
• Measure U: $68m in year 1 / $52m in year 2
• Homekey – Funds are not guaranteed
• Fund 1870 (Impact Fees and Boomerang)
• Broken up into different funds to track separately (2423, 2424, 1870) • Reduction in impact fees based on projections from PBD ( -$2.2m / -$6.8m) • Increase in Affordable Housing Trust Fund (Boomerang) for non -capital expenses which reduces $ for capital
8 HCD 2023 – 2024 Budget
1870 Boomerang Fund
Category Mayor's FY23-24 Mayor's FY24-25
Staffing $ 8,151,310 $ 10,807,216
Capital $ 1,529,376 $ 0
Non-capital O&M $ 3,086,931 $ 3,472,832
Total $ 12,767,617 $ 14,280,048
9 Systemic Budget Concerns
1. Competing Needs-Staff vs Capital
• Boomerang Fund 1870
• Boomerang is needed for capital costs which are allocated through HCD NOFAs • HCD is draft ordinance to use boomerang for operating subsidies to increase production of PSH/ELI units
• Boomerang is the ONLY non-restricted HCD source to cover staffing costs that cannot be fully covered by grants or bonds
• These two functions compete with each other.
• To ensure grant compliance with Federal and State grants, staffing costs (including internal services) under Fd_1870 increased by $5.7+M from $2.39+M in FY21 to $8.15+M in FY24. This increase eroded HCD’s capital funding.
• HCD needs a larger percentage of City's Boomerang funds to cover both staffing and capital funds as a reliable ongoing source
10 Systemic Budget Concerns
2. Insufficient Capital Budget
• Capital budget does not meet needs for projects in the pipeline (NC NOFA requested $230m w/ $63m available)
3. CDBG Funding-ie. Negative Fund Balance, Grant Compliance & Efficiency:
• Approx $8m CDBG grant funds
• Negative Fund Balance of $8.9m due to historical accumulated staffing costs ($6.7m) and cash flow timing ($2.1m)
• To be in compliance:
• Staffing moved from various grant funds, mainly from CDBG Fund, to Fd_1870 • Adhere to public service cap
• Next steps-examine Staff: Services ratio
11 Systemic Budget Concerns
4. Addressing Homelessness
• Need for permanent exits which requires operating subsidies & more capital for new construction
• Need for homeless prevention services (budgeted for $1m in FY24) • HCD budget does not include services for unhoused residents OR homeless interventions (HSD)
5. Staffing: HCD's high vacancy rate hinders ability to estimate future staffing needs • Eviction moratorium phase-out & rental registry ongoing operational needs & costs • Staff capacity and skills to underwrite and asset manage PSH and interim projects • Scaled production & preservation w/ additional funding sources ( eg BAHFA bond) • Support for small/emerging developers and chasing new deals • Direct services as part of merger
12 HCD 2023 – 2025 Budget
Proposed Amount and Funding Sources for Capital Improvements* Capital Sources for Affordable
Production and Preservation
FY23-24 Budget (In
Millions)
FY24-25 Budget (In
Millions)
Affordable Housing Impact Fees
(2424) / Jobs Housing Impact
Fees (2423) - ESTIMATED
$8.26 $3.63
AHTF (1870) - ESTIMATED $1.33 $0
HUD Funds (2108 & 2109) $3.28 $3.23
Low-Mod Income Asset Fund
(2830) (unspent loan proceeds) $25.46 $5.80
Measure U (5340) $68.00 $52.00
Total $106.33 $64.46
A primary departmental focus is to administer capital funds through the NOFA processes
*Does not include staff costs
13 HCD 2023 – 2025 Budget
Funding Sources and Uses for Services in millions*
Services Dollars FY23-24
Sources
FY23-24
Uses
FY24-25
Sources
FY24-25
Uses
RAP – City wide $10.92
($7.86 for HCD)
$10.92
($7.86 for HCD)
$12.93
($9.76 for HCD)
$12.93
($9.76 for HCD)
CDBG – City wide $8.15
($6.73 for HCD)
$7.3
($5.88 for HCD)
$8.09
($7.8 for HCD)
$7.24
($6.95 for HCD)
Total $19.07
($14.59 for HCD)
$18.22
($13.74 for HCD)
$21.02
($17.56 for HCD)
$20.2
($16.71 for HCD)
*includes staff costs
14 HCD FY 22/2023 CDBG Budget
CDBG Uses in millions*
*includes staff costs. Does not include $850k revolving loan funds FY 2022/23 COMMUNITY DEVELOPMENT BLOCK GRANT ALLOCATIONS Awarded CDBG Uses In Millions
Community Homeless Services 1.1
Economic Development 0.6
Housing Community & Development (HCD) 5.8
Services (incl Fair Chance & CCR) 2.2
Program Delivery & Administration (incl RLS) 2.5
Support Acquisition for Affordable Housing 1.1
2022/23 CDBG Totals 7.5
Opportunities and Solutions
1. The Big Picture: Combining Housing & Homelessness allows one Dept. to hold all phases of the housing experience
• Funding landscape from prevention through permanent placement • Identify funding and service gaps
2. Consultant Assistance: Change Management
• Integrating functions
• Org Structure
• Skill set alignment
• Staff morale
• Department culture
3. Consultant Assistance: Service Efficiencies
• Evaluate the effectiveness of internal vs. outsourcing services • Historically, HCD has not managed direct services efficiently & doesn't have funding for services
15 FY24/25 Reorganization
Opportunities and Solutions
4. Maintain clear department priorities
• Core function and budget priorities around producing and preserving housing • Clarify metrics for success for this new team
• Understand Council's and Mayor's expectatio ns for the new department?
5. Identify funding sources to operationalize merger and scale existing services:
• Larger portion of Measure U funds
• Increased advocacy and policy analysis capacity to bring in additional funds • Explore funding for innovation - more units, faster and cheaper • Partner with CDFIs and other funding agencies
• Public/Private partnerships
• A proportionate equivalent of HSD's administrative/fiscal team • Sources to cover increased service delivery demands and expectations
6. Maintain coordination & collaboration with PBD, EWDD, OakDOT and DPW • Place based community development
• Leverage funding across silos
• Improve internal processes - more units, faster and cheaper 16 FY24/25 Reorganization
Thank You!
17