City of Sacramento
City Council - 5PM Report
915 I Street Sacramento, CA 95814
www.cityofsacramento.org
File ID: 2022-02508 2/7/2023 Consent Item 16.
Homeless Housing, Assistance and Prevention Program Round 4 (HHAP-4) Funding Update, Authority, and Commitment of Permanent Supportive Housing Funds to the Roadway Inn Homekey Project in District 6
File ID: 2022-02508
Location: Citywide and District 6
Recommendation: Adopt a Resolution: a) authorizing the City Manager, or the City Manager’s designee to sign all necessary grant agreements and related documents to receive the HHAP-4 funding; b) authorizing the City Manager, or the City Manager’s designee, to accept the state allocation of $24,791,417 in grant funds and increase the HHAP-4 Grant Fund Project (G02000980) (the “Project”) and its corresponding revenue and expenditure budget in G02000980 (Operating Grant Fund, Fund 2702); c) authorizing the City Manager, or the City Manager’s designee, to perform all other actions related to receiving and fully utilizing HHAP-4 grant funds; and d) committing the City’s 13% Permanent Supportive Housing (PSH) set-aside of $3,222,884 in HHAP-4 grant funding to the Rodeway Inn Homekey Project being proposed by Hope Cooperative at 25 Howe Avenue, subject to final receipt of HHAP-4 grant funding and the necessary environmental review.
Contact: Michael Jasso, Assistant City Manager, [email protected], (916) 808-1380, Office of Innovation & Economic Development; Nicholas Golling, Homeless Services Program Manager, (916) 808-7816, [email protected], Department of Community Response Attachments:
1-Description/Analysis
2-Resolution
Description/Analysis
Issue Detail: The Homeless Housing, Assistance and Prevention Program Round 4 (HHAP-4) is a $1 billion block grant program authorized by budget appropriations for the current fiscal year 2022- 2023. Administered by the California Interagency Council on Homelessness (Cal ICH) this fourth round of funding has been made available to support building regional coordination and a unified
File ID: 2022-02508 2/7/2023 Consent Item 16.
response to reduce homelessness across California. As with the previous rounds of HHAP funding, eligible applicants include California’s 13 largest cities, 58 counties, and 44 Continuums of Care with allocations set by Cal ICH based on their proportionate share of the state’s homeless population as reported by the federal department of Housing and Urban Development (HUD) in the 2022 Point-In- Time (PIT) count. Like with HHAP-3, not all HHAP-4 funding is being allocated now; $180 million is bonus funding which will be available to grantees who meet funding obligations and achieve outcome goal requirements.
When the City was required to submit its HHAP-4 funding application at the end of November, the actual funding allocations under HHAP-4 were not available and the City was required to submit its application using percentage estimates for how the funding would be utilized. With the federal department of Housing and Urban Development (HUD)’s certification of the 2022 PIT information for all of California, allocations were released in early January. The City’s overall allocation is the highest it has received in the program so far, totaling $24,791,417.
HHAP-4 requires grantees to expend funds on evidence-based solutions that prevent, reduce and end homelessness. Grantees may not use HHAP grant funding to supplant existing local funds for homeless housing, assistance, or prevention, and funds must be expended in compliance with Housing First requirements per Health and Safety Code Section 50220.7(g). HHAP-4 funds must be expended on one or more of the following eligible uses:
1. Rapid rehousing, including rental subsidies and incentives to landlords, such as security deposits and holding fees.
2. Operating subsidies in new and existing affordable or supportive housing units, emergency shelters, and navigation centers. Operating subsidies may include operating reserves.
3. Street outreach to assist persons experiencing homelessness to access permanent housing and services.
4. Services coordination, which may include access to workforce, education, and training programs, or other services needed to promote housing stability in supportive housing.
5. Systems support for activities necessary to create regional partnerships and maintain a homeless services and housing delivery system, particularly for vulnerable populations, including families and homeless youth.
6. Delivery of permanent housing and innovative housing solutions, such as hotel and motel conversions.
7. Prevention and shelter diversion to permanent housing, including rental subsidies.
File ID: 2022-02508 2/7/2023 Consent Item 16.
8. Interim sheltering, limited to newly developed clinically enhanced congregate shelters, new or existing non-congregate shelters, and operations of existing navigation centers and shelters based on demonstrated need. Any new interim sheltering funded by HHAP funds must be low barrier, comply with Housing First, and prioritize interventions other than congregate shelters.
9. Improvements to existing emergency shelters to lower barriers and increase privacy.
HHAP-4 Funding Allocations
Building upon the direction provided with HHAP-1, HHAP-2, and HHAP-3 funding allocations, recent City Council discussions, and the gaps analysis and Sacramento Local Homeless Action Plan, the City Council previously adopted and submitted the following HHAP-4 funding percentage allocations.
Using the posted allocation information and the previously adopted funding allocations, here is the funding that will be utilized by category:
HHAP 4 % Funding
Allocations
7% Administration $1,735,399
10% Youth Shelter $2,479,142
70% Shelter $17,353,992
13% Permanent Supportive Housing$3,222,884
These allocations were consistent with how the funding has been split (on-average) over the past three cycles, with permanent housing or prevention utilizing 12-13% on average. Since the HHAP-3 cycle funded prevention, staff is recommended the HHAP-4 cycle provide funding for permanent housing, likely a Homekey project. These percentages can be further refined once the City further analyzes how this amount fits into local contract amounts for youth sheltering, and continued operations of North Fifth Street, X Street Navigation, Meadowview Navigation, Grove Bridge to Housing, city motel shelters, and other local sheltering spaces.
Rodeway Inn Homekey Project Permanent Supportive Housing Funding Hope Cooperative is proposing the acquisition and conversion of the 103-room Rodeway Inn motel on Howe Avenue near Folsom Boulevard. Utilizing HHAP-4 funding, Homekey funding and other leveraged resources, Hope Cooperative would purchase this site and modify the existing hotel rooms to create 70 affordable studio apartments for formerly homeless households. The applicant will work with SHRA on the application for Homekey and in leveraging other funding for completion of this project. The original three-story motel was built in 1990 and is relatively well-maintained. The site is located near important amenities, like transit. To serve residents well, Hope Cooperative plans to partner with the City, Sacramento County, Sacramento Steps Forward and other local partners to
File ID: 2022-02508 2/7/2023 Consent Item 16.
prioritize the formerly unhoused resident referrals from the area. Future residents of this development will benefit from intensive case management and other specialty support services. Eighteen of the existing rooms will have added kitchenettes for a simple conversion to a studio apartment. Fifty-two studio apartments will be larger by converting and combining 78 of the existing rooms. Seven of the rooms will be used to create offices and other meeting areas.
Planned site improvements will include enhanced perimeter fencing, converting parking areas to landscaping, pet areas, and gathering areas to create a sense of community at the site. The proposed acquisition is to be submitted in the state’s upcoming Homekey Round 3 Funding Cycle, expected to start in April 2023. After the Homekey award, the acquisition would take place in the fall and construction would take approximately 9 months before the first residents move in during Summer 2024. This project provides an opportunity to leverage additional sources of funding for affordable housing, yielding permanent supportive housing units necessary to assist individuals who are at-risk or coming out of homelessness and in an ideal location with access to local services. Staff supports making an initial funding commitment of the City’s HHAP-4 Permanent Supportive Housing funding, subject to final receipt of funding and completion of the necessary project applications, environmental review and entitlements.
Policy Considerations: The recommendations in this report further local coordination in response to homelessness and continue existing sheltering and navigation efforts, while beginning to move city contributions into the homeless response system towards an increased emphasis on prevention and permanent housing, consistent with the recommendations of the system Gaps Analysis, Cal ICH direction, and national best practices in reducing homelessness. Utilizing the permanent supportive housing funding to leverage other resources expands its impact in the community.
Economic Impacts: Efforts to reduce and minimize the occurrence of homelessness in our community improves the economic outlook of all community members, including those who are able to avoid homelessness through prevention and diversion, those who are reintegrated into the workforce through local shelter and training options, individuals and families who gain permanent affordable housing and have greater expendable income to take care of their needs and support the local economy, and local businesses with access to a larger job pool and decreased impacts.
Environmental Considerations:
California Environmental Quality Act (CEQA): The current action is the establishment of a funding mechanism to finance various activities, including any environmental review necessary for the development of the housing project. The establishment of a funding mechanism is not a project pursuant to CEQA Guidelines section 15378(b)(4).
Sustainability: Not applicable.
File ID: 2022-02508 2/7/2023 Consent Item 16.
Commission/Committee Action: Not applicable.
Rationale for Recommendation: The actions in this report are consistent with the City of Sacramento Comprehensive Siting Plan adopted by the City Council on August 10, 2021, the City of Sacramento Housing Element of the General Plan, specifically Policy H-7.2 that speaks to Regional Coordination in our response to homelessness, and the Local Homeless Action Plan adopted June 26, 2022.
The recommendation for this report fulfills two important steps related to the HHAP-4 funding: 1) increases the City Council’s grant receipt and budgeting approval from $20,000,000 previously approved to the $24,791,417 published as the City allocation; and 2) provides a commitment of the $3,222,884 of HHAP-4 funding to the Rodeway Inn Roomkey Project so that Hope Cooperative can leverage additional resources for development, including the upcoming Homekey funding cycle, subject to receipt of the HHAP-4 funding.
Financial Considerations: This report carries out the necessary steps to receive the increased amount of HHAP-4 funds, increasing the HHAP-4 Multi-Year Operating Project (G02000980) revenue and expenditure budgets (Operating Grant Fund, Fund 2702) to $24,791,417, once funds have been received. This report also commits the $3,222,884 of permanent supportive housing funding to the Rodeway Inn Roomkey Child Project, subject to receipt of the HHAP-4 funding.
Local Business Enterprise (LBE): These funding allocations will be used with all local organizations in the provision of shelter and the acquisition and conversion of motel rooms to permanent supportive housing.
RESOLUTION NO.
Adopted by the Sacramento City Council
Homeless Housing, Assistance and Prevention Program Round 4 (HHAP-4) Grant Funding Authorization and Commitment of HHAP-4 Permanent Supportive Housing Grant Funds to the Roadway Inn Homekey Project
BACKGROUND
A. Homelessness is an existential threat to the individuals living without quality housing and to the public health and safety of the residents and businesses in Sacramento. The right to an adequate standard of living for every resident of the City is one that must be protected and advanced by the actions and commitment of all levels of government, including the City of Sacramento. The interconnectedness of homelessness, housing and public health must inform the current and future policy, partnerships, prioritization of work programs, and budget allocations to prevent and reduce the number of people experiencing homelessness.
B. On January 5, 2021, the City Council unanimously approved the preparation of a Master Siting, Operations, Programmatic and Financing Plan (“Master Siting Plan”, later named the “Comprehensive Siting Plan”) and committed to a Council- led process to engage the community and identify public and private properties for a single up or down vote to approve the sites identified for shelter and housing, identify funding sources, and provide authority to the City Manager to implement the Comprehensive Siting Plan. This Plan was approved on August 10, 2021 and has been in implementation ever since.
C. According to the 2019 Point in Time Homeless County released by the Sacramento Steps Forward, Sacramento’s Continuum of Care, the County of Sacramento had a homeless population of 5,570 individuals, a majority of whom are unsheltered on any given night in the City of Sacramento. The 2019 Point-in- Time Count also estimates that in 2019 between 10,000 and 11,000 individuals would be unsheltered at some point in 2019. A disproportionate share of the homeless in the City of Sacramento are people of color. Recent numbers are indicating an increase in local homelessness as a result of the COVID-19 pandemic, inflation, and further housing market constraints, finding that approximately 16,500 to 20,000 experience homelessness over the course of a year in the County of Sacramento, with the majority occurring in the City of Sacramento.
D. Since 2019, housing affordability in the state has worsened with rising rents and great need for the construction of affordable and permanent supportive housing.
The City Council declared a Shelter Crisis annually since January 14, 2020 under chapter 7.8 of division 1 title 2 of the California Government Code and directed the City Manager to take action to streamline the provision of homeless shelters (Resolution 2020-0017).
E. Recent increases in households relocating from the Bay Area have placed further demand on the local housing market by households with higher incomes.
Regionally, over the last year, median household income increased by twelve percent, far outpacing the typical three percent average and it is estimated that these increases are primarily resulting from new residents, making the housing market more competitive than ever.
F. The City Council has also acknowledged that to reduce the number of first-time homelessness and persons who return to homelessness after experiencing homelessness, that homeless prevention, diversion, workforce training and job placement resources are necessary.
G. Since March 2020 when the COVID-19 pandemic was declared a public health emergency in California, the City Council has allocated significant one- time funding sources to provide shelter and emergency housing.
H. The Local Homeless Action Plan was adopted in June 2022 in an effort to provide a systematic and comprehensive approach to address the humanitarian crisis of homelessness and staff from the City, County, SHRA, and Sacramento Steps Forward have collaborated in the implementation of the plan.
I. The City and the County adopted a legally-binding partnership agreement on December 6, 2022 to formally express the roles of each party in collectively responding to local needs of people experiencing homelessness.
J. The HHAP-4 funding allocation is an opportunity to both continue existing sheltering programs and expand prevention programming and permanent supportive housing units, consistent with the local gaps analysis and state direction, to move towards adjusting our system focus onto prevention and permanent housing as a means for reducing experiences and duration of homelessness locally.
BASED ON THE FACTS SET FORTH IN THE BACKGROUND, THE CITY COUNCIL RESOLVES AS FOLLOWS:
Section 1. The City Council authorizes the City Manager, or the City Manager’s designee, to sign all necessary grant agreements and related documents to receive the HHAP-4 grant funding and enter into agreements based on the funding allocation approval and consistent with the authority provided under the City’s Comprehensive Siting Plan.
Section 2. The City Council authorizes the City Manager, or the City Manager’s designee, to accept the state allocation of $24,791,417 in grant funds and increase the HHAP-4 Grant Fund Project (G02000980) (the “Project”) and its corresponding revenue and expenditure budget in G02000980 (Operating Grant Fund, Fund 2702), once received.
Section 3. The City Council authorizes the City Manager, or the City Manager’s designee, to perform all other actions related to receiving and fully utilizing the HHAP-4 grant funds.
Section 4. The City Council commits the City’s 13% Permanent Supportive Housing (PSH) set-aside of $3,222,884 in HHAP-4 grant funding to the Rodeway Inn Homekey Project being proposed by Hope Cooperative at 25 Howe Avenue, subject to final receipt of the HHAP-4 grant funding, completion of the necessary environmental reviews, and subject to approval as to form by the City Attorney’s Office.