City Council Memorandum
TO: HONORABLE MAYOR AND CITY COUNCIL DATE: JUNE 27, 2023 FROM: HOUSING AUTHORITY WARDS: ALL
SUBJECT: RESOLUTION AUTHORIZING THE SUBMISSION OF A JOINT APPLICATION BETWEEN THE CITY OF RIVERSIDE AND WALDEN FAMILY SERVICES TO THE STATE OF CALIFORNIA DEPARTMENT OF HOUSING AND COMMUNITY DEVELOPMENT FOR $4,375,000 OF HOMEKEY PROGRAM ROUND 3 FUNDS FOR THE ACQUISITION AND REHABILITATION OF SCATTERED SITES FOR TRANSITIONAL HOUSING SERVING FOSTER YOUTH – SUPPLEMENTAL APPROPRIATION ISSUE:
Adopt a Resolution authorizing the submission of a joint application between the City of Riverside and Walden Family Services to the State of California Department of Housing and Community Development for $4,375,000 of Homekey Program Round 3 funds for the acquisition and rehabilitation of scattered sites for transitional housing serving foster youth.
RECOMMENDATIONS:
That the City Council:
Adopt a Resolution authorizing the submission of a joint application between the City of Riverside and Walden Family Services to the State of California Department of Housing and Community Development for the Homekey Program Round 3 grant for the acquisition and rehabilitation of scattered sites for transitional housing serving foster youth; Authorize the City Manager, or designee, to sign any documents that may be required to apply for and receive Homekey Program Round 3 funds, including making minor and non-substantive changes; With at least five affirmative votes, authorize the Chief Financial Officer, or designee, to record an increase in revenue in the amount of $4,375,000, or in the amount of the grant award, and appropriate expenditures in the same amount in the Grants and Restricted Programs, Homekey Round 3 Project accounts; and Authorize the City Manager, or designee, to execute a Homekey Program Round 3 Subrecipient Agreement with Walden Family Services, including making minor and non-substantive changes.
BACKGROUND:
Walden Family Services (Walden) has provided direct services to foster youth throughout Southern California since 1976. Walden provides housing for transitional age youth 18-21 years old, including pregnant and parenting youth, and foster and former foster youth. Youth in Walden’s housing program receive supportive case management services to assist them in achieving self-sufficiency.
Currently Walden leases multiple apartments throughout the City of Riverside as the City provides easy access to schools, employment opportunities, and public transport where program participants can thrive.
On March 29, 2023, the State of California Department of Housing and Community Development (HCD) released a NOFA for the Homekey Program Round 3 (Homekey 3) to provide funding to sustain and rapidly expand housing for persons experiencing homelessness or at-risk of homelessness. The Homekey Program Round 3 has set aside $75,759,808, approximately 10% of its total funding allocation, to fund projects benefitting homeless youth.
The program’s maximum allocation for assisted units reserved for homeless youth or youth at-risk of homelessness is $175,000 per door for units. Additionally, the Homekey 3 will only fund a maximum of four single-family home scattered site projects.
DISCUSSION:
In May 2023, the City’s Housing Authority received an over-the-counter funding proposal from Walden Family Services for a scattered site transitional housing project for youth at-risk of homelessness and aged out foster youth. Walden Family Services proposes to purchase up to five single-family homes throughout the City of Riverside and convert them to Single Room Occupancy (SRO) units where multiple transitional aged clients (18-21 years old) can be housed together while receiving support services (Project). The SRO units will have their own locks for privacy, and bathrooms, kitchens, laundry, and common areas of the house will be shared. Walden will place one youth per SRO unit except for parenting youth, who will have the infant child share their unit for a maximum occupancy of six residents per house.
The locations of these scattered site homes have not yet been identified as residential properties cannot be guaranteed to remain on the market until Homekey 3 funding is awarded and disbursed.
Below is a breakdown of the Project cost.
Activity
Cost
Acquisition
$3,371,834
Construction
$ 853,166
Furnishings
$ 150,000
Developer fee
$ 652,834
Total Project Cost
$5,027,834
City staff and Walden are recommending applying for $4,375,000 in Homekey 3 funding to carry out the project and Walden will defer their developer fee totaling $652,834.
HCD will require a 30-year affordability covenant to be recorded in first position against the properties acquired with Homekey 3 to restrict the use, operation, occupancy, and affordability of these properties.
The State requires that applications must be submitted by qualifying cities, counties, or other public government or planning organizations. The City will act as a joint applicant with Walden for the Homekey 3 funds. The Homekey Program guidelines state that a joint applicant will be “jointly and severally liable” for the completion of the project. However, the program guidelines allow the joint applicants to execute indemnification agreements to apportion and minimize the risk to the public agency, which the City Attorney’s Office will prepare if Homekey 3 funds are awarded.
STRATEGIC PLAN ALIGNMENT:
The Project supports Strategic Priority 2 – Community Well-Being and 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.
This item aligns with each of the five Cross-Cutting Threads as follows:
Community Trust – The City of Riverside has identified the need for affordable housing as a priority need in the City’s Housing Element. The Housing Element outreach process gathered information from specific focus groups and interviews with various organizations and service providers in the housing and community development field, as well as residents of the city.
Equity – The Project ensures that all eligible persons receive equitable access to housing and are served with dignity, respect, and compassion regardless of the circumstances, ability, or identity.
Fiscal Responsibility – There is no fiscal impact to the City General Fund associated with this project. This project allows the City to utilize a state budget appropriation to build low-income housing to create economic stability for extremely low-income City residents.
Innovation – The Project will allow the City to capitalize on new and changing funding sources in partnership with state programs to meet ongoing and changing needs of low-income members of the community.
Sustainability & Resiliency – The Project’s case managers will work closely with clients to achieve housing stability and self-sufficiency.
This item also contributes to the Homelessness Action Plan, Goal No. 3 to prevent homelessness.
FISCAL IMPACT:
The total fiscal impact of the action is $4,375,000 in FY 2023/24. Upon City Council approval, an increase in revenue in the amount of $4,375,000, or in the amount of the grant award, and an equal amount appropriated in the Grants and Restricted Programs Fund, Homekey Round 3 Project revenue account 9410400-334100 and expenditure account 9410400-440210.
Prepared by: Michelle Davis, Housing Authority Manager
Certified as to
availability of funds: Edward Enriquez, Assistant City Manager/Chief Financial Officer/City Treasurer
Approved by: Mike Futrell, City Manager
Approved as to form: Phaedra A. Norton, City Attorney
Attachment: Resolution
Resolution Authorizing Submission of Homekey Round 3 Application with Walden Family Services for Transitional Housing ● Page 2