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POINT ARENA CITY COUNCIL
AGENDA ITEM SUMMARY
AGENDA ITEM: IX A
MEETING DATE: 11/15/2022
TITLE
Permanent Local Housing Allocation (PLHA) 5-Year Plan
RECOMMENDED ACTION
Receive report, conduct public hearing, and consider adoption of Resolution authorizing an application for the Permanent Local Housing Allocation Program and approving the City's PLHA 5-Year Plan
ANALYSIS
In 2017, the California legislature passed the "Building Homes and Jobs Act" (SB 2) which included the establishment of a permanent $75 recording fee on real estate documents starting in 2019 to help fund local government efforts to increase the supply of affordable housing. SB2 requires that 70% of the revenues collected by the fee be allocated to local governments through the Permanent Local Housing Allocation (PLHA) program. The goal of the PLHA program is to help cities and counties prioritize investments that increase the supply of housing for households earning up to 120% of the area median income. The PLHA funds are allocated annually based on the number of countywide real estate transactions and a formula prescribed under federal law for the Community Development Block Grant program.
The City of Point Arena's PLHA allocations thus far are as follows:
Calendar Year
Funds
Formula
Allocation
Amount
Allowable Local
Administration
Amount
Activity Delivery
Amount
Expenditure
Deadline
2019 $67,404 $3,370 $64,034 4/30/2024
2020 $103,785 $5,189 $98,596 4/30/2025
2021 $114,174 $5,709 $108,465 4/30/2026
2022 TBD 5% 95% 4/30/2027
2023 TBD 5% 95% 4/30/2028
The State Department of Housing & Community Development (HCD) has estimated that for the five-year period from 2019-2023, the City of Point Arena's PLHA allocation will be approximately $404,425. The City is currently eligible to apply for formula grant allocations for the calendar years 2019, 2020, and 2021. Following HCD's acceptance of - 2 -
the City's PLHA 5-Year Plan, and as the allocations become available for 2022 and 2023, the City may apply for future allocations with a streamlined application.
On October 25, 2022, the Point Arena City Council considered PLHA funding options at a public meeting and directed staff to prepare a PLHA 5-Year Plan that utilizes funds to provide grants and loans to support the development of Accessory Dwelling Units (ADUs) for long-term rental housing for lower-income households and grants and loans for rehabilitation of owner-occupied housing for lower- and moderate-income homeowners. The City intends to provide grants and/or loans to eligible homeowners in accordance with program guidelines that will be established in the first phase of the City's PLHA program.
A proposed PLHA 5-Year Plan is included with this staff report (Attachment A). Program income resulting from repayment of principal and interest from loans made in connection with the two PLHA programs must be tracked and expended in accordance a PLHA Program Income Reuse Plan. A proposed PLHA Program Income Reuse Plan is included as Exhibit 1 in the PLHA 5-Year Plan.
Recommendation: The recommendation of City staff and the Housing Update team is that the City Council conduct a public hearing and take the following action:
▪ Adopt the attached Resolution authorizing an application for the Permanent Local Housing Allocation Program and approving the City's PLHA 5-Year Plan (Attachment B).
FISCAL IMPACT
Costs incurred by the City and the Housing Update team in applying for the PLHA allocation can be reimbursed as general administrative expenses from the PLHA allocation.
As noted above, the City's PLHA allocation for the first five-year period (2019-2023) is estimated at $404,425.
ATTACHMENTS
A. PLHA 5-Year Plan
B. Resolution authorizing PLHA Application
CITY MANAGER SIGNATURE
Prepared by Linda Ruffing, North Coast Community Planning _________________________________
Paul Andersen, City Manager
CITY OF POINT ARENA, CALIFORNIA
PERMANENT LOCAL HOUSING ALLOCATION PROGRAM
5-YEAR PLAN (2019 through 2023)
PUBLIC REVIEW
The public comment period regarding the City of Point Arena's Permanent Local Housing Allocation (PLHA) 5-Year Plan opens on November 3, 2022, and will conclude on November 15, 2022, at a public hearing to be held by the Point Arena City Council at 6:00 PM, or as soon thereafter as possible, in the Point Arena City Council Chambers at 451 School Street, Point Arena, California, and via teleconference. Members of the community are encouraged to attend the hearing where they will have an opportunity to provide input on the PLHA 5-Year Plan and PLHA Program Income Reuse Plan. All interested parties may appear and be heard at the public hearing described above or submit written correspondence prior to the November 15, 2022 public hearing to: City of Point Arena; PO Box 67, Point Arena, CA 95468 or by email to [email protected].
BACKGROUND
In 2017, the California legislature passed the "Building Homes and Jobs Act" (SB 2) which included the establishment of a permanent $75 recording fee on real estate documents starting in 2019 to help fund local government efforts to increase the supply of affordable housing. SB2 requires that 70% of the revenues collected by the fee be allocated to local governments through the Permanent Local Housing Allocation (PLHA) program. The goal of the PLHA program is to help cities and counties prioritize investments that increase the supply of housing for households earning up to 120% of the area median income. The PLHA funds are allocated annually based on the number of countywide real estate transactions and a formula prescribed under federal law for the Community Development Block Grant program. The City of Point Arena's PLHA allocations thus far are as follows:
Calendar Year
Funds
Formula
Allocation
Amount
Allowable Local
Administration
Amount
Activity Delivery
Amount
Expenditure
Deadline
2019 $67,404 $3,370 $64,034 4/30/2024
2020 $103,785 $5,189 $98,596 4/30/2025
2021 $114,174 $5,709 $108,465 4/30/2026
2022 TBD 5% 95% 4/30/2027
2023 TBD 5% 95% 4/30/2028
The State Department of Housing & Community Development (HCD) has estimated that for the five-year period from 2019-2023, the City of Point Arena's PLHA allocation will be approximately $404,425. The City City of Point Arena
PLHA 5-Year Plan (2019-2023)
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is currently eligible to apply for formula grant allocations for the calendar years 2019, 2020, and 2021.
Following HCD's acceptance of the City's PLHA 5-Year Plan, and as the allocations become available for 2022 and 2023, the City may apply for future allocations with a streamlined application.
On October 25, 2022, the Point Arena City Council considered PLHA funding options at a public meeting and directed staff to develop a PLHA 5-Year Plan that utilizes funds to provide grants and loans to support the development of Accessory Dwelling Units (ADUs) for long-term rental housing for lower-income households and grants and loans for rehabilitation of owner-occupied housing for lower- and moderateincome homeowners. The City intends to provide grants and/or loans to eligible homeowners in accordance with program guidelines that will be established in the first phase of the City's PLHA program.
Program income resulting from repayment of principal and interest from the two loan programs will be tracked and expended in accordance a PLHA Program Income Reuse Plan as adopted by the City Council (see attached, Exhibit 1).
PLHA 5-YEAR PLAN OVERVIEW
SECTION 302(c)(4)(A): Describe the manner in which allocated funds will be used for eligible activities.
The City plans to use PLHA funds for the following activities:
(1) construction of new ADUs that are affordable to lower-income households and individuals where either the primary residence or the ADU are owner-occupied; and (2) rehabilitation of lower- and moderate-income owner-occupied housing.
For both activities, the City will award either grants or low- and/or deferred-interest loans to eligible homeowners for qualifying projects. For each activity, the City will develop and adopt program guidelines that are consistent with the PLHA program. The City will establish and implement procurement procedures that are consistent with PLHA requirements. Point Arena's PLHA ADU and Housing Rehabilitation Grant & Loan programs will be made available through an over-the-counter application process. Eligible applicants will carry out projects using PLHA funds alone or in combination with other funds. Funding recommendations made by staff and/or committees will be taken to the City Council for final approval. The City will enter into agreements with eligible homeowners and will monitor their progress against these agreements.
SECTION 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% of the area median income.
It is anticipated that the City's program guidelines for the ADU and Housing Rehabilitation Grant & Loan programs will allow for grants to be awarded to households that are at or below 60% of the area median income (AMI). In the marketing of its ADU and Housing Rehabilitation Grant & Loan programs, the City will prioritize applications submitted by households with incomes at or below 60% AMI. These actions are intended to incentivize use of the City's PLHA funds to assist households with incomes at or below 60% AMI.
City of Point Arena
PLHA 5-Year Plan (2019-2023)
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SECTION 302(c)(4)(C): Provide a description of how the plan is consistent with the programs set forth in the local governments housing element.
The PLHA 5-Year Plan activities are consistent with and will help facilitate implementation of the following goals and policies of the City of Point Arena Housing Element (2019-2027):
GOAL 1: Promote and facilitate housing unit construction at all income levels, with specific emphasis on increased housing opportunities for Point Arena's low-income households.
Policy 1.1: Promote and facilitate housing unit construction for all income groups through increased education, outreach and coordination.
Consistency with Policy 1.1: The PLHA ADU Grant & Loan program will include an education and outreach program to educate and encourage property owners to construct ADUs, including providing information about the City's "pre-approved" ADU plans, expedited permitting, and financial assistance programs.
Policy 1-2: Promote and facilitate housing unit construction for all income groups through the implementation of financial and procedural incentives.
Consistency with Policy 1-2: The PLHA ADU Grant & Loan program will help to promote and facilitate of ADUs that will be made available as rental units to lower-income households.
GOAL 2: Preserve existing housing in safe and sound condition, particularly rental units.
Policy 2-1: Conserve existing housing units for all income groups through increased education, outreach, and coordination.
Consistency with Policy 2.1: The PLHA Housing Rehabilitation Grant & Loan program will include an education and outreach program to educate and encourage property owners to perform necessary repairs to preserve existing dwelling units, including providing information about the City's expedited permitting processes for housing rehabilitation permits and financial assistance programs.
Policy 2-2: Conserve existing housing units for all income groups through the implementation of financial and procedural incentives.
Consistency with Policy 2-2: The PLHA Housing Rehabilitation Grant & Loan program will help to promote and facilitate the performance of essential repairs to dwelling units that are owned and occupied by moderate- and lower-income households.
The City plans to use 100% of its PLHA funds for program activities that address these Housing Element priorities.
SECTION 302(c)(4)(E)(i): Provide a detailed and complete description of how allocated funds will be used for each proposed housing activity.
City of Point Arena
PLHA 5-Year Plan (2019-2023)
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The PLHA funds will be used to provide financial assistance to (a) lower- and moderate-income homeowners in the form of grants and/or low-interest and/or deferred payment loans for the development of ADUs and (b) to lower-income homeowners in the form of grants and/or low-interest and/or deferred payment loans for the rehabilitation of owner-occupied housing. The loans shall be evidenced through a Promissory Note secured by a Deed of Trust, and both loans and grants shall include the recordation of Regulatory Agreements restricting occupancy and rents on the deeds of the subject properties.
The City will procure the services of a program operator (consultant) to prepare program guidelines for the ADU and Housing Rehabilitation Grant & Loan programs and to assist with the marketing and implementation of the programs. Program guidelines will be adopted by the City Council and will be designed to provide assistance to eligible homeowners for construction of ADUs and for housing rehabilitation in accordance with PLHA guidelines. Projects that meet the requirements set forth in this plan will be considered for PLHA assistance. Oversight of the program operator will be provided by a City employee on a part-time basis.
ACTIVITY 1 - ACCESSORY DWELLING UNIT (ADU) GRANT & LOAN PROGRAM:
Funding Allocation Year 2019 2020 2021 2022 2023
Type of Affordable Housing Activity ADU Grant &
Loan Program
ADU Grant &
Loan Program
ADU Grant &
Loan Program
ADU Grant &
Loan Program
ADU Grant &
Loan Program
SECTION 302(c)(4)(E)(i) Percentage
of Funds Allocated for Housing
Activity
50% 50% 50% 50% 50%
SECTION 302(c)(4)(E)(ii) Area
Median Income Served
50-120% AMI 50-120% AMI 50-120% AMI 50-120% AMI 50-120% AMI SECTION 302(c)(4)(E)(ii) Unmet
Share of RHNA at Area Median
Income Level
0 1- 120% AMI
RHNA=3
unmet share=2
1- 120% AMI
RHNA=3
unmet share=1
SECTION 302(c)(4)(E)(ii) Projected
Number of Households Served
0 1 1 1 1
SECTION 302(c)(4)(E)(iv) Period of
Affordability for the Proposed
Activity
5 years 5 years 5 years 5 years 5 years
ACTIVITY 2 - HOUSING REHABILITATION GRANT & LOAN PROGRAM:
Funding Allocation Year 2019 2020 2021 2022 2023
Type of Affordable Housing Activity Housing
Rehabilitation
Grant & Loan
Program
Housing
Rehabilitation
Grant & Loan
Program
Housing
Rehabilitation
Grant & Loan
Program
Housing
Rehabilitation
Grant & Loan
Program
Housing
Rehabilitation
Grant & Loan
Program
SECTION 302(c)(4)(E)(i) Percentage
of Funds Allocated for Housing
Activity
50% 50% 50% 50% 50%
City of Point Arena
PLHA 5-Year Plan (2019-2023)
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SECTION 302(c)(4)(E)(ii) Area
Median Income Served
50-120% AMI 50-120% AMI 50-120% AMI 50-120% AMI 50-120% AMI SECTION 302(c)(4)(E)(ii) Unmet
Share of RHNA at Area Median
Income Level
0 1- 80% AMI
RHNA=1
unmet share=0
1- 120% AMI
RHNA=3
unmet share=0
SECTION 302(c)(4)(E)(ii) Projected
Number of Households Served
0 1 1 1 1
SECTION 302(c)(4)(E)(iv) Period of
Affordability for the Proposed
Activity
5 years 5 years 5 years 5 years 5 years
SECTION 302(c)(4)(E)(iii): A description of major steps/actions and a proposed schedule for the implementation and completion of each housing project. 2019 PLHA funds would be utilized to procure the services of a program operator, to prepare and adopt Program Guidelines for the ADU and Housing Rehabilitation Grant & Loan programs, to develop outreach and education materials, and to identify qualified and eligible homeowners. 2020 - 2023 PLHA funds would be utilized to administer the ADU and Housing Rehabilitation Grant & Loan programs and to provide grants and loans to eligible homeowners for construction of ADUs and rehabilitation of housing.
Percentage of funds allocated for affordable owner-occupied workforce housing: 100%
CERTIFICATIONS
The City will record with a deed restriction all property for housing units that are constructed or rehabilitated using PLHA funds.
REPORTING
The City will provide an annual report of uses and expenditures of any allocated PLHA funds every July 31st to the California Department of Housing and Community Development’s grant management division according to their specifications.
City of Point Arena
PLHA 5-Year Plan (2019-2023)
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Exhibit 1
City of Point Arena Program Income Reuse Plan
The City of Point Arena (“City”) commits to maintaining policies and procedures that segregate Permanent Local Housing Allocation (PLHA) program income for future reuse in accordance with the following policies:
1. All repayments of PLHA loan principal and interest shall be received by City and deposited into a separate PLHA reuse account maintained by the City’s Finance Department. The City provides a detailed tracking system to document PLHA loans, including borrower name and address, loan/reference number, grant year, loan term, and principal and interest payments.
2. The PLHA reuse account shall be an interest-bearing account into which all earned interest shall be deposited. Interest earned shall be considered reuse funds and will be used in the same manner and with the same restrictions as principal and interest payments.
3. All funds deposited into the PLHA reuse account shall be the property of the City.
4. All PLHA reuse funds shall be expended in accordance with PLHA regulations.
5. Reuse funds may be used for PLHA eligible activities in the following categories but must be in alignment with the State-approved PLHA Plan.
(a) 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.
(b) 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.
(c) Matching portions of funds placed into Local or Regional Housing Trust Funds. (d) 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. (e) Accessibility modifications in lower-income owner-occupied housing. (f) Efforts to acquire and rehabilitate foreclosed or vacant homes and apartments. (g) Homeownership opportunities, including, but not limited to, down payment assistance.
City of Point Arena
PLHA 5-Year Plan (2019-2023)
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(h) Up to five percent (5%) for administration.
6. Reuse funds may be used within the boundaries of the City of Point Arena.
7. The City shall allow the Department of Housing & Community Development full access to the PLHA reuse account records for the purpose of determining compliance with PLHA regulations.
RESOLUTION NO. 2022-33
RESOLUTION OF THE CITY COUNCIL OF THE CITY OF POINT ARENA AUTHORIZING
THE APPLICATION FOR THE PERMANENT LOCAL HOUSING ALLOCATION PROGRAM [All, or A necessary quorum and majority] of the City Council members of the City of Point Arena, California, a general law city, (“Applicant”) hereby consents to, adopts and ratifies the following resolution:
A. WHEREAS, the Department 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)).
B. WHEREAS the State of California (the “State”), Department of Housing and Community Development (“Department”) issued a re-opening of Notice of Funding Availability (“NOFA”) dated 8/17/2022 under the Permanent Local Housing Allocation (PLHA) Program; C. WHEREAS the City of Point Arena 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.
D. 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 THAT:
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.
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 ($404,425.00) in accordance with all applicable rules and laws.
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.
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.
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
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.
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.
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).
9. 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.
10. The Point Arena City Manager 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.
PASSED AND ADOPTED The foregoing Resolution No. 2022-33 was passed and adopted at a Regular meeting of the Point Arena City Council on the 15th day of November, 2022 by the following vote. Motion by _______, Seconded by ________.
Ayes:
Noes:
Absent:
Abstain:
Signature of Approving Officer _______________________
SCOTT IGNACIO, MAYOR, CITY OF POINT ARENA
CERTIFICATE OF THE ATTESTING OFFICER
The undersigned, Officer of Vice Mayor Barbara Burkey does hereby attest and certify that the foregoing Resolution is a true, full and correct copy of a resolution duly adopted at a meeting of the Point Arena City Council which was duly convened and held on the date stated thereon, and
that said document has not been amended, modified, repealed or rescinded since its date of adoption and is in full force and effect as of the date hereof.
ATTEST:
Signature of Attesting Officer __________________________
BARBARA BURKEY, VICE MAYOR, CITY OF POINT ARENA