2646873v6 - updated 01/13/2021
REVISED COMMUNITY & ECONOMIC DEVELOPMENT COMMITTEE
FEBRUARY 13, 2024
APPROVED AS TO FORM AND LEGALITY
___________________________________
CITY ATTORNEY’S OFFICE
OAKLAND CITY COUNCIL
RESOLUTION NO. _______________ C.M.S.
A RESOLUTION (1) ALLOCATING MEASURE U HOUSING BOND
FUNDS IN A TOTAL AMOUNT NOT TO EXCEED $22,000,000 TO FUND
NEW CONSTRUCTION OF MULTIFA MILY RENTAL AFFORDABLE
HOUSING PROJECTS, (2) AUTHORIZING THE CITY ADMINISTRATOR
TO MAKE DEVELOPMENT LOANS UNDER THE NEW CONSTRUCTION
OF MULTIFAMILY RENTAL A FFORDABLE HOUSING PROGRAM
WITHOUT RETURNING TO COUNCIL, CONTINGENT ON FUNDING
AVAILABILITY, AND (3) MODIFY ING ALLOCATIONS OF PRIOR
CALIFORNIA DEPARTMENT OF HOUSING & COMMUNITY
DEVELOPMENT’S (CA HCD) LOCAL HOUSING TRUST FUND
AWARDS TO COMPLY WITH STATE PROGRAM REQUIREMENTS
WHEREAS, on January 31, 2023, the City of Oakland issued a Notice of Funding Availability (“NOFA”) soliciting applications for funding for new construction of affordable housing development projects; and
WHEREAS , the application period for the aforementioned NOFA closed on April 3, 2023; and
WHEREAS, the City's Consolidated Pl an for Housing and Community Development indicates that there is a need for affordable rental housing, and has identified this activity as a priority; and
WHEREAS , the projects that applied for funding through the NOFA must be consistent with the City’s Project Development Guidelines, and each developer must meet the City’s Threshold Developer Criteria in order to qualify for funding; and
WHEREAS , the projects that applied for funding through the NOFA were evaluated and scored on criteria specified in the NOFA, and the highest ranked projects received approximately $70,000,000 to build 623 affordable housing units; and
WHEREAS, City funding commitments thro ugh the NOFA process are critical for affordable housing developers to se cure other sources of affordable housing funding from County, State and Federal sources, and th e NOFA’s established funding
2 priorities sought to align with both the City’ s funding priorities for affordable housing spending and those of other funders; and
WHEREAS , unfunded affordable housing pipel ine projects from the 2023 New Construction NOFA sought approximately $123 million; and
WHEREAS , peer cities often use previous ly established rankings from competitive Notices of Funding Availability to fund projec ts as additional funds become available; and
WHEREAS, Measure U funding also provides opportunities for good family- supporting construction jobs and careers as the City creates more affordable housing; and
WHEREAS , the 2022 Affordable Housing and Infrastructure Bond (Measure U) was adopted by th e Oakland voters in November 2022, and authorized the City of Oakland to issue $350 million in General Obligation Bonds to support affordable housing; and
WHEREAS , the second issuance of the bonds authorized by Measure U is expected to take place in late 2024 or early 2025; and
WHEREAS, pursuant to Section 3(C) of Measure U, prior to issuance of the bonds, Council must identify how the projects authorized for funding with Measure U bond proceeds address social and geographic equi ty and provide great er benefit to underserved populations and geographic areas of greatest need, address improvements to the City’s existing core capital assets, and maintain or decrease the City’s existing operations and maintenance costs; and
WHEREAS , the City is the Lead Agency for these projects for purposes of environmental review under the California Environmental Quality Act of 1970 ("CEQA"); and
WHEREAS , the requirements of CEQA, the CEQA Guidelines as prescribed by the Secretary for Resources, and the provisions of the Environmental Review Regulations of the City of Oakland have been satisfied or will be satisfied for these projects prior to the City making a funding commitment to projects; and
WHEREAS, for those projects receiving fe deral funds, execution of loan documents or other documents legally committi ng the City to fund the projects shall be expressly conditioned on compliance with the requirements of the National Environmental Protection Act ("NEPA"), as certified by the City Administrator or his or her designee; and
WHEREAS, the City was awarded Local Housing Trust Funds (“LHTF”) from CA HCD pursuant to CA HCD Notices of Fundi ng Availability dated April 30, 2020, May 3, 2021, and April 5, 2022; and
WHEREAS, pursuant to City Council Resolution No. 88212 C.M.S., dated July 14, 2020, No. 88765 C.M.S., dated July 20, 2021, and No. 89187 C.M.S., dated May 17, 2022, a portion of the LHTF award funds were allocated to specific projects; and
3 WHEREAS, in order to meet LHTF program r equirements, it is in the best interest of the City to allow t he City Administrator, in their discretion, to reallocate the LHTF award funds among affordable housing projects funded through the 2023 New Construction NOFA or other past funding processes; now, therefore, be it
RESOLVED: That, in addition to the $70, 000,000 in funds previously allocated to eligible appl icants to the 2023 New Constr uction Notice of Funding Availability, the City Council hereby allocates up to an additional $22,000,000 in Measure U Bond funding contingent on the issuance and sa le of Measure U Bonds in a sufficient amount and approval of the final project funding authorization legislation; and be it
FURTHER RESOLVED: That the City Council her eby authorizes the City Administrator to provide loans in a total amount not to exceed $22,000,000, to be used for development of new construction affordable housing projects that are selected by the City Administrator as a potential recipient through the 2023 New Construction Notice of Funding Availability, whether or not they received any previous funding award, without returning to Council; and be it
FURTHER RESOLVED: That City Council intends to consider a future policy on workplace labor standards for Measure U Bond funding for affordable housing projects; and be it
FURTHER RESOLVED: That the City Council directs the City Administrator or their designee to convene stakeholders from city departments, construction labor unions, affordable housing developers, and minority contractors to develop a future policy on labor standards for Measure U Bond funding for new construction affordable housing projects for Council consideration prior to the next issuance of a New Construction Notice of Funding Availability; and be it
FURTHER RESOLVED: That the future polic y on labor standards for Measure U Bond funding for affordable housing pr ojects shall apply to future New Construction Notices of Funding Availability related to Measure U Bond funding; and be it
FURTHER RESOLVED: That in the interim before a labor standards policy is adopted, the City Council strongly encourages affordable housing developers to meet with construction trade unions and other stakeholders on labor standards for their projects; and be it
FURTHER RESOLVED: That the City Council he reby authorizes the City Administrator to issue commitments for funding of up to $22,000,000 in proceeds from the next expected available sale of Measure U bonds in Fiscal Year 2024-2025; and be it
FURTHER RESOLVED : That the City Administra tor, at their discretion, may reallocate funds from the Local Housing Trust Fund among affordable housing projects, including projects for which LHTF f unds were previously allocated by the City Council; and be it
4 FURTHER RESOLVED: That the making of each loan shall be contingent on the availability of sufficient funds in the above funds in fiscal years 2023-24 and/or 2024- 2025; and be it
FURTHER RESOLVED: That each loan shall be for a maximum term of 55 years, with an interest rate to be determi ned by the City Administrator in his or her discretion, with repayment to the City from su rplus cash flow from the project and other available funds during the term of the loan, with the balance due at the end of the term, or on such other repayment terms and schedule as the City Administrator determines are in the best interests of the City and the project; and be it
FURTHER RESOLVED: That as a condition of each loan, the City will require that appropriate restrictions on project occupancy, rents and operations be recorded against project land and/or improvements; and be it
FURTHER RESOLVED: That each loan shall be secured by a deed of trust on the project land and/or improvements; and be it
FURTHER RESOLVED: That loan funds shall be reserved for a period of no more than 24 months from the date of the commitment letter, and shall be subject to reprogramming at the end of this period unless the developer has secured commitments for full project funding or provided other assurances of adequate project funding that the City Administrator deems sufficient within his or her discretion, within the reservation period; and be it
FURTHER RESOLVED: That the making of each loan shall be contingent on and subject to such other appropriate terms and conditions as the City Administrator may establish; and be it
FURTHER RESOLVED: That the City hereby authorizes the City Administrator in his or her discretion to subordinate the priority of any of the City’s recorded interests in each project pr operty to a lien or encumb rance of another private or governmental entity providing financial assistance to the project, if the City Administrator or his or her designee determines that (1) an economically f easible alternative method of financing the projec t on substantially comparable te rms and conditions but without subordination is not reasonably available, (2) the City’s investment in the project in the event of default is reasonably protected, and (3) subordination is in the best interests of the City; and be it
FURTHER RESOLVED: That the City Council hereby authorizes the City Administrator to make specific allocati ons of the loan funds approved under this Resolution among the projects without returning to Council; and be it
FURTHER RESOLVED: That the City Council finds and determines that the New Construction of Multif amily Rental Affordable Hous ing Program funded by this Resolution (1) will address social and geographi c equity and provide greater benefit to
5 underserved populations and geographic areas of greatest need by increasing the stock of affordable rental housing with long-term affordability rest rictions throughout Oakland; (2) will not impact the City’s existing core c apital assets, but may provide collateral improvements to such assets as part of project development; and (3) will not impact the City’s existing operations and maintenance costs, since the operations and maintenance cost of the projects will be covered by the property owner; and be it
FURTHER RESOLVED: That the City Council finds and determines that this action is not subject to CEQA since it is not funding any specific projects, but that the City Administrator will make the environm ental determinations under CEQA for each project that is selected prior to making a loan; and be it
FURTHER RESOLVED: That the City Administrator shall cause to be filed with the County of Alameda a Notice of Exem ption or Notice of De termination for each project as appropriate; and be it
FURTHER RESOLVED: That execution of lo an documents or other documents legally committing the City to fund a project with federal funds will be expressly conditioned on compliance with the requirement s of NEPA, as cert ified by the City Administrator; and be it
FURTHER RESOLVED: That all loan documents shall be reviewed and approved by the City Attorney’s Office for form and legality prior to execution; and be it
FURTHER RESOLVED: That the City hereby authorizes the City Administrator to determine funding allocations, conduct negotiations, execute documents, administer the loans, extend or modify the repayment terms, and take any other action with respect to the loans, funding allocations, and the projects consistent with this Resolution and its basic purpose.
IN COUNCIL, OAKLAND, CALIFORNIA,
PASSED BY THE FOLLOWING VOTE:
AYES -
FIFE, GALLO, JENKINS, KALB, KAPLAN, RAMACHANDRAN, REID, AND
PRESIDENT FORTUNATO BAS
NOES –
ABSENT –
ABSTENTION –
A T T E S T :
ASHA REED
City Clerk and Clerk of the Council of the
City of Oakland, California