City Council Memorandum
TO: HONORABLE MAYOR AND CITY COUNCIL DATE: OCTOBER 18, 2022 FROM: OFFICE OF HOMELESS SOLUTIONS WARDS: ALL
SUBJECT: APPROVAL OF A RESOLUTION ALLOWING THE CITY OF RIVERSIDE TO APPLY FOR AND RECEIVE FUNDING FROM THE STATE OF CALIFORNIA’S SENATE BILL 2 PERMANENT LOCAL HOUSING ALLOCATION PROGRAM FOR CALENDAR YEAR 2020 AND 2021 TOTALING $5,295,881; AND APPROVAL OF THE AMENDED FIVE-YEAR FUNDING PLAN FOR 2019-2023 – SUPPLEMENTAL APPROPRIATION ISSUE:
Approval of a Resolution allowing the City of Riverside to apply for and receive funding from the State of California’s Senate Bill 2 Permanent Local Housing Allocation Program for calendar year 2020 and 2021 totaling $5,295,881; and approving the amended five-year funding plan for 2019-2023.
RECOMMENDATIONS:
That the City Council:
Adopt a Resolution allowing the City of Riverside to apply for and receive funding from the State of California’s Senate Bill 2 Permanent Local Housing Allocation Program for calendar year 2020 and 2021 totaling $5,295,881 and approving the amended five-year funding plan for 2019-2023; Approve the amended Permanent Local Housing Allocation Program 2019-2023 five-year funding plan; Authorize the City Manager, or his designee, to sign applicable standard agreements and other grant-related documents required to secure and administer the Permanent Local Housing Allocation funds; With at least five affirmative votes, authorize an increase in revenues and appropriate expenditures in an amount equal to $2,521,285, or in the amount of the grant award, in the Development Grants Fund, Permanent Local Housing Allocation Program (PLHA) 2020 Program; With at least five affirmative votes, authorize an increase in revenues and appropriate expenditures in an amount equal to $2,774,596, or in the amount of the grant award, in the Development Grant Funds, PLHA 2021 Program.
BACKGROUND:
On February 26, 2020, the State of California Department of Housing and Community Development (HCD) released a Notice of Funding Availability (NOFA) for the first round of Permanent Local Housing Allocation (PLHA) Program Funding. The PLHA Program is funded pursuant to Senate Bill 2 (SB 2) (Chapter 364, Statues of 2017). SB 2 creates a surcharge on land transfer documents of $75 per document, per parcel of land, with a cap of $225 per transaction.
SB2 established a PLHA Program Fund and authorized HCD to allocate 70 percent of funds collected and deposited in the PLHA Program Fund, beginning in calendar year 2019, to local governments for eligible housing and homelessness activities. The intent of the bill is to provide a permanent, ongoing source of funding to local governments for housing-related projects and programs that assist in addressing the unmet housing needs of their local communities.
The PLHA Program allocates funding to localities like Riverside that are federal entitlement cities based on their Community Development Block Grant (CDBG) allocation formula. There is a capped 5% set-aside for administration based on annual allocations. As PLHA Program funding is based on land transfer fees which are sensitive to the economy and other considerations, and the CDBG allocation formula, the State can estimate revenues annually, but actual appropriations may vary.
The first year of PHLA Program funding was provided to the City as a one-time planning grant and on September 17, 2019, the City Council authorized approximately $660,000 in City housing-related planning initiatives and project activities related to this set-aside. Subsequent years of PLHA funding are designated for eligible housing and homelessness activities.
On July 7, 2020, the City Council approved a five-year funding strategy and an application for, and receipt of, the first PLHA funding round of $1,622,125, which was allocated to the following activities:
PROJECT
DEVELOPER
NO. OF UNITS
PROPOSED PLHA PROGRAM FUNDING
Pierce Street and
Golden Avenue
Affordable Housing
Project (Ward 7)
National Community
Renaissance
80 units of very
low-income
affordable
housing
$1 million
The Aspire
(Third Street and Fairmount Boulevard -Ward 1)
Innovative Housing Opportunities
32 units of permanent supportive housing for youth
$54,019
Administration
(5% of grant)
City of Riverside
$81,106
DISCUSSION:
On August 17, 2022, the State of California Department of Housing and Community Development (HCD) released an annual Notice of Funding Availability (NOFA) for the 2021 round of PLHA funding. According to the NOFA, the City is estimated to receive $2,521,285 of 2020 funding and $2,774,596 of 2021 funding, and an estimated total of $9,732,750 over the first five years of PLHA program funding. It is expected that award appropriations will vary year-to-year depending on the number of local real estate transaction fees, which is the basis of PLHA funding as a portion of these transaction fees are returned to the City.
Staff is requesting to amend the PLHA five-year funding plan to allocate the PLHA unds as follows:
ACTIVITY
FY
AMOUNT
Bride Housing Operations
2022/23
2023/24
$1,200,000
$1,200,000
Affordable Housing Projects
$2,631,087
Administration (5% of grant)
2022/23
2023/24
$ 132,397
$ 132,397
TOTAL
$5,295,881
If funding should become available from other grant resources to cover the bridge housing operations, then staff is requesting the authority to reallocate $1.2 million towards the development of affordable housing.
STRATEGIC PLAN ALIGNMENT:
Ongoing funding for the SB2 PLHA supports Strategic Priority 2 – Community Well-Being, specifically, Goal 2.1 - to facilitate the development of a quality and diverse housing supply that is available and affordable to a wide range of income levels; and Goal 2.3 – to strengthen neighborhood identities and improve community health and the physical environment through amenities and programs that foster an increased sense of community and enhanced feelings of pride and belonging citywide.
The Project aligns with each of the five Cross-Cutting Threads as follows:
Community Trust – The Housing Authority identifies priority development areas to meet the greatest needs of residents in the City. Priorities are based on the City’s HUD Annual Action Plan for federal entitlement grants, the 5-year HUD Consolidated Plan for federal entitlement grants, and the Housing Element; plans that are vetted in the City through Community Ward Meetings, Post Card Surveys, and online. The information gathered in specific focus groups and interviews with various organizations and service providers in the housing and community development field. PLHA funding allows for funding projects that are deemed to be priority in the City’s planning documents.
Equity – Pursuant to State Law, the Housing Authority provides critical funding to build projects that ensure all eligible persons receive equitable access to housing with dignity, respect, and compassion regardless of their circumstances, ability, or identity.
Fiscal Responsibility – This item allows the City to utilize State housing funds to create low-income housing to provide economic stability for low-income residents. The Authority’s investments typically enjoy a 10:1 to 20:1 return with funded projects.
Innovation – Projects funded with PLHA program funds allow the City to capitalize on new and changing funding sources in partnership with federal, state, and private partners to meet the ongoing and changing needs of low- to moderate-income members of the community.
Sustainability & Resiliency – Projects funded with PLHA program funds will promote sustainable community and economic development growth and encourage community engagement and resiliency.
FISCAL IMPACT:
The total fiscal impact of the action is $5,295,881 ($2,521,285 in 2020 PHLA funds and $2,774,596 in 2021 PLHA funds). Upon Council approval and receipt of the grant award, an increase of $2,521,825, or in the amount of the grant award, will be recorded in the revenue account and an equal amount appropriated to expenditure account in the Development Grants Fund, PLHA 2020 Program, account numbers 9344800-334100 and 9344800-440210, and $2,774,596, or in the amount of the grant award, will be recorded in the revenue account and an equal amount appropriated to expenditure account in the Development Grants Fund, PLHA 2021 Program, account numbers 9347100-334100 and 9347100-440210.
Prepared by: Michelle Davis, Housing Authority Manager
Certified as to
availability of funds: Edward Enriquez, Interim Assistant City Manager/Chief Financial Officer/City Treasurer
Approved by: Edward Enriquez, Interim Assistant City Manager/Chief Financial Officer/City Treasurer
Approved as to form: Phaedra A. Norton, City Attorney
Attachments:
Resolution
Updated Five-Year PLHA Funding Plan
Permanent Local Housing Allocation Program Application for 2020 and 2021 ● Page 2