DISCUSSION ON THE
FORMATION OF A SOUTH BAY
REGIONAL HOUSING
TRUST FUND & SBCCOG JPA
5TH AMENDMENT
City Manager’s Office & City Attorney's Office
February 3, 2026
OUTLINE
1. Overview
2. South Bay Regional Housing Trust Fund (SBRHT)
a. Presenter: Jacki Bacharach
3. Legal Concerns
4. Fifth Amended & Restated
Joint Powers Agreement (JPA)
5. Recommendations
2 SOUTH BAY REGIONAL HOUSING TRUST FUND
Presenter: Jacki Bacharach, SBCCOG Executive Director
3 LEGAL CONCERNS
• Section 3: Powers & Duties
• Draft JPA allows SBRHT to acquire/sell property to enforce loans or recover collateral.
• Risk: Property could be transferred to entities misaligned with city housing goals.
• Section 3: Limitation on Powers
• Draft JPA requires City Council approval before any
housing project within the City receives funding.
• Risk: Significant predevelopment spending could create pressure to approve a project simply because funds have already been invested.
4 LEGAL CONCERNS
• Section 7: Financial Provisions
• Draft JPA allows the SBRHT budget to be approved by a majority vote of members.
• Risk: Administrative fees could increase without a cost basis, potentially resulting in uncapped financial exposure. • Section 9: Indemnification
• Draft JPA allows SBRHT to deny defense/indemnity if City was alleged to be negligent or engaged in misconduct.
• Risk: City could be responsible for paying defense costs based solely on allegations, even if claims are later
disproven.
5 LEGAL CONCERNS
• Section 9: Assignment of Recovery Rights
• Draft JPA requires the City to assign recovery rights to SBRHT.
• Risk: City may face limits in managing litigation, insurance claims, or settlements if interests diverge from SBRHT. 6 FIFTH AMENDED & RESTATED JPA
• Oct 23, 2025: SBCCOG Board recommended adoption of the Fifth Amended and Restated JPA.
• Background: LA City Councilmember (CD15) proposed
allowing a non-elected alternate for the City of Los Angeles. • Purpose: Ensures consistent and reliable representation for the City of Los Angeles on the SBCCOG Governing Board.
• Amended Language: Aligns with LA County’s provision
permitting a chief of staff or senior staff member to serve as an alternate.
• Next Steps: Requires approval by two-thirds of all SBCCOG member agencies.
7 RECOMMENDATIONS
Staff recommends that the City Council:
1. Provide direction to staff regarding the formation of a South Bay Regional Housing Trust Fund
2. Approve the Fifth Amended and Restated Joint Powers
Agreement to allow the City of Los Angeles to
designate a non-elected alternate representative to
the SBCCOG governing board
8 1
SOUTH BAY HOUSING TRUST
Why A South Bay Housing Trust?
• Voters approved Measure A in
2024; legislating ~$13 million
a year for Housing ($7+
million) and Prevention ($5+
million) funding for SBCCOG.
• This presentation will talk
about the funds that are
dedicated to Production and
Preservation, and Ownership
of housing as those are the
funds we would be
considering for the proposed
Housing Trust
2 LACAHSA PPO FUNDS
Production, Preservation, and Ownership (PPO)
• SBCCOG mandated to
program $7.3 million of
LACAHSA PPO funds.
• LACAHSA agency
funds can also match
our funding – so
potentially +/- $14
million of funding for
our cities.
(allocations determined by
low income RHNA numbers)
3 SGV AND GATEWAY
SGV and Gateway Housing Trust Before LACAHSA
SGV and
Gateway
COGS
Housing
Trust
Housing
Trust +
LACAHSA
LACAHSA
• SGV and Gateway formed their Housing Trust first, and then incorporated LACAHSA funds into their Trust
2020/2023 2025
4 SBCCOG
SBCCOG Received LACAHSA Funding First
SBCCOG LACAHSA
• SBCCOG has received LACAHSA funding and is
contemplating a Housing Trust
2025
5 SBCCOG LACAHSA
Housing Trust Structure
Dues • No dues first year.
=➔ Paid for by LACAHSA
• Future Housing trust to decide on dues • Trust Board made up of city representatives • LACAHSA provides $1.4 million for administrative funding
• Housing Trust administrative costs projected to be
$500k annually, so there is a cushion
6 PROBLEM
SBCCOG May Need a Trust to Fulfill LACAHSA Portfolio
LACAHSA Product Portfolio:
• Grants
• Soft Development Loans (revenue generating)
• Construction/Pre-Development Loans (revenue generating) • Preservation Acquisition/Equity stakes (revenue generating) • Master Leasing
• Rental or Operating Subsidies
• Direct Service - Homebuyer Assistance (revenue generating) Items in Blue are only possible if SBCCOG partners with a Non-Profit Activities in Red may not be possible under SBCCOG current authority – handicapping our ability to maximize our LACAHSA funding However, they would be possible under a Housing Trust
7 PROBLEM
No Housing Trust Scenario - Grants
1. Grants Create Tax Liability
• Treated as taxable income
• Increases developer's tax burden, reducing available equity for the project • Tax hit can outweigh the value of the grant itself
2. Grants Reduce Basis For Federal Tax Credits
• Low-Income Housing Tax Credit Applications (a common form of financing) rely on eligible basis to determine how many credits a project can receive • Grants are considered "basis reducers" and lower the project's eligible basis
• Lower Basis > fewer tax credits > less equity > weak financial package
3. Grants Can Make Capital Stack Less Competitive
• Developers often prefer financing tools that preserve or increase basis, not reduce it
8 SGV REVENUE EXAMPLE
SGV Housing Trust Generating Revenue
• SGV Housing Trust is generating
over $230,000 a year in Interest and
Loan Fee Revenue
• Their Revolving Loan Fund will
receive its first loan repayment,
allowing their Trust to recycle those
funds to another project
• We can achieve similar results
with our LACAHSA funds, but
need a Housing Trust in order
to do it
9 ALL CITIES CAN BENEFIT
What about cities with no development opportunities?
If cities have no development opportunities, there are other ways to participate in LACAHSA PPO Funds + Housing Trust
▪ Preservation of existing affordable housing
▪ Master Leasing
▪ Rent or Operating Subsidies
▪ First Time Homebuyer Assistance
▪ Income verification for existing low-income housing
o The Trust will have to find funding for this and/or can act as a central administrator for cities to achieve economies of scale o LACAHSA projects will have funding for income verification. 10 Naturally Occurring Affordable Housing (NOAH)
• There are naturally
occurring affordable
housing in every city that
need to be preserved
before investors buy
them and charge market
rate rent
11 Wall Street In Our Cities
Invitation Homes,
NYSE Ticker Symbol:
INVH
“We operate in
markets with strong
demand drivers, high
barriers to entry, and
high rent growth
potential, primarily in
the Western United
States, Florida, and
the Southeast United
States.”
12 EVICTIONS
Financial Hardships in the South Bay
• No city is immune to
financial stress that
constituents are facing
• Evictions are one pathway into
homelessness
13 Need For 100% Affordable
Constituents who would benefit from
100% affordable housing include –
• Seniors on fixed income (social
security)
• Essential workers (medical assistants,
city employees, restaurant/fast food
employees, teacher’s aids, child-care
workers, etc..)
• Developmentally/physically disabled
WITHOUT HOUSING TRUST
14 Affordable Housing Without a Housing Trust
Market Rate Housing (green) vs 100% Affordable (red)
• Unlike market rate housing, cities/developers need help building 100% affordable • 100% affordable projects are very difficult to pencil out. Many often fail to get off the ground (ie. United Methodist Church in San Pedro)
• San Gabriel Valley Housing Trust has a pipeline 875 units, and 927 units built to date on top of what is naturally occurring in their market 15 A REGIONAL APPROACH
A Regional Approach vs Cities Doing It Alone
Housing Trust Matters
Cities face increasing housing
responsibilities with limited staff and
resources.
A Regional Housing Trust creates shared
capacity, expertise, and funding leverage to
benefit cities.
Identifies and applies for multiple funding
opportunities for the benefit of the region
Organizes developments so that projects are
not competing with each other
Cities acting independently increases cost,
duplication, and administrative burden.
One set of housing program guidelines, loan
documents, legal and staff expertise, and
compliance instead of many.
Centralized income verification and compliance,
tracking system and process.
Shared legal, underwriting, and reporting
expertise specializing in affordable housing and
complex loan negotiations and closings.
16 NEXT STEPS
Information You Need to Know to Decide
Questions?
SOUTH BAY REGIONAL HOUSING TRUST
STRATEGIC PLAN OVERVIEW
&
JPA SUMMARY
EXECUTIVE SUMMARY
• Mission Statement
• To empower South Bay cities with flexible funding,
strategic guidance, and technical assistance that advance local housing priorities, expand housing opportunity, and support the development and preservation of affordable
and supportive housing across the region.
• Vision Statement
• A South Bay region collaborating to expand housing
opportunities through innovation, strategic partnerships, and coordinated Trust resources—supporting access to
diverse housing choices that strengthen community
stability and economic vitality.
• Governance Board
• One Trust Board Director from each
member city + Two Trust Board
Directors representing housing experts.
• Trust Staff
• Option 1: SBCCOG Employees
• Option 2: Contracted Consulting Firm
• Organization Chart
• Advisory Committee Framework
• Purpose and Role
• Membership Composition
• Meeting frequency and output
• Benefits to the Trust
GOVERNANCE, TRUST STAFF, AND
ADVISORY COMMITTEE
TRUST FORMATION & IMPLEMENTATION
GOALS
1. Secure initial capital funding commitments.
2. Establish transparent, accountable, and sustainable governance.
3. Promote regional collaborative and shared solutions.
4. Strengthen local capacity through technical assistance.
5. Establish performance metrics and evaluation tools.
6. Building the Trust’s brand and demonstrating early impact.
7. Design and launch housing funding programs
SOUTH BAY REGIONAL HOUSING TRUST
DRAFT JOINT EXERCISE OF POWERS
AGREEMENT
INTRODUCTION
• 2022 Legislation added to the CA Government Code section 6539.9 authorizing the creation of the South Bay Regional Housing Trust.
• Purpose: Receive and leverage public and private funding for planning and construction of housing of all types and tenures for persons and families of Extremely-Low, Very-Low, and Low-Income.
• Term – The Effective Date of the JPA will be the date of approval by the fourth city to join the Trust.
LIMITATION ON POWERS
• Regulate land use within the jurisdiction of any of the Parties; • Levy, or advocate or incentivize the levying of, an exaction, including an impact fee, charge, dedication, reservation or tax assessment, as a condition of approving the funding for or approval of a development project;
• Require or incentivize inclusionary zoning requirements; • Require the Parties to dedicate or assign funding for any SBRHT obligations or programs; • Fund or approve a housing project or program that is not supported by the governing body of the jurisdiction (a city or the county) in which the proposed project is sited; • Require the Parties to accept or provide any number of housing units as a prerequisite to joining or remaining a member of SBRHT; and
• Affect the individual power of each Party separately to implement affordable housing projects and programs generated within its jurisdictional boundaries.
TERMS OF THE JPA
• One elected official from each Trust member City, appointed by that City Council + Two Housing Experts appointed by the City Managers Committee. • Withdrawal – anytime with written notice and executed copy of city resolution subject to notice received at least 90 days prior to start of fiscal year and payment of any administrative fees.