City of Sacramento
City Council - 2PM Report
915 I Street Sacramento, CA 95814
www.cityofsacramento.org
File ID: 2025-00875 5/13/2025 Item 20.
Authorization for Joint Application for State HomeKey+ Program Funding for Rio Linda Senior Housing Project
File ID: 2025-00875
Location: 2809 Rio Linda Boulevard, District 2
Recommendation: Adopt a Resolution authorizing the Interim City Manager or designee to: a) submit a joint application with Urban Capital LLC to the California Department of Housing and Community Development (“HCD”) for up to $28.4 million of State Homekey+ Program funding; and b) if awarded Homekey+ Program funds: 1) commit $1,500,000 of City Homeless Housing, Assistance and Prevention (“HHAP”) 4 and 5 funding; 2) bring back to City Council a Homekey+ Standard Agreement with the State of California for such funding and request City Council authorization to execute any documents necessary to participate in the Homekey+ Program, and any amendments thereto.
Contact: Ya-yin Isle, City Housing Manager, (916) 808-1869, [email protected], City Manager’s Office of Innovation and Economic Development; Brian Pedro, Director, (916) 808-7816, [email protected], Department of Community Response Presenter: Brian Pedro, Director, (916) 808-7816, [email protected], Department of Community Response
Attachments:
1-Description/Analysis
2-Conceptual Site Plan
3-Resolution
4-Presentation
Description/Analysis
Issue Detail: Proposition 1, passed by California voters in March 2024, is a critical step in advancing the State’s goals to reduce homelessness and protect our most vulnerable populations through important changes to the Mental Health Services Act (MHSA). Proposition 1 includes the Behavioral Health Services Act (BHSA) and the Behavioral Health Infrastructure Bond Act (BHIBA). On November 26, 2024, and subsequently amended on January 31, 2025, the California Department of
File ID: 2025-00875 5/13/2025 Item 20.
Housing and Community Development (HCD), in collaboration with the California Department of Veterans Affairs (CalVet), released a Notice of Funding Availability (NOFA) for approximately $2.145 billion of Homekey+ grant funding. Homekey+ is the Permanent Supportive Housing component of BHIBA and is largely derived from Proposition 1 bond funds established by BHIBA (AB 531, Chapter 789, Statutes of 2023).
The Homekey+ NOFA makes funding available for projects that will support the development of Permanent Supportive Housing for veterans and/or individuals with mental health or substance use disorder challenges who are at-risk of or experiencing homelessness. Building on the success of three prior rounds of the Homekey program, Homekey+ continues a statewide effort to sustain and rapidly expand Permanent Supportive Housing for people experiencing homelessness. The NOFA allocates the balance of the funds after specific set-asides, geographically based on each region’s proportionate share of veterans and other people experiencing homelessness, and each region’s share of severely rent-burdened households. The regional funding allocations also consist of a distribution for projects serving the general population and a distribution for Veterans.
The Sacramento Geographic Region includes the following counties: El Dorado, Placer, Sacramento, Sutter, Yolo and Yuba. The Sacramento regional allocation total is $101,220,070, with $49,438,314 veteran allocation, and $51,781,757 general population allocation. The Homekey+ applications are being accepted and evaluated on a first-come, first-served basis until the final application due date of May 30, 2025, or until the available funds are exhausted, whichever occurs first.
Homelessness is an issue that impacts communities without regard to geographic or political boundaries and for which there is no single answer or approach. The City of Sacramento plays a significant role in addressing homelessness and has been working in partnership with the County of Sacramento and the Sacramento Continuum of Care to create a systemic approach to addressing homelessness. The City has made significant investments of resources to increase the access and availability of shelter beds, services, outreach and permanent housing to those experiencing homelessness.
Despite those investments, permanent housing for seniors and senior veterans on a fixed income continues to be in short supply, leaving many of the City’s seniors experiencing homelessness in a position where they are unable to move on from encampments and shelter programs to permanent housing. To address this issue and looking at creative ways to bring forward cost effective permanent supportive housing, City staff have been working with Urban Capital LLC on developing a plan and Homekey+ proposal for a 100-unit permanent supportive housing project on a privately owned site at 2809, 2811, and 2821 Rio Linda Boulevard (called the “Rio Linda Senior Housing Project” or “Project”). The Project would look to serve homeless seniors and senior veterans with suspected behavioral health issues from District 2. The Project leverages HCD’s pre-approved manufactured homes and proposes to use 240 square foot Boss Homes that include living space, bathroom and kitchenette, as a cost-containment strategy and a way to quickly bring housing online. The proposed
File ID: 2025-00875 5/13/2025 Item 20.
Project would also include some parking, park space, community garden, community rooms, laundry facilities, storage and private office spaces.
The Rio Linda Senior Housing Project Homekey+ application requests $19,339,000 for capital costs which includes site acquisition, unit purchase and assembly, site work and infrastructure to build the Project at a per unit cost of $193,390/unit. HCD will contribute a baseline amount of up to $200,000 per unit without requiring a match for the capital costs from the Applicant. In addition, the Homekey+ NOFA allows for a maximum operating grant amount per unit not to exceed $1,400 per month for the duration of the operating award for projects that can demonstrate a commitment of three years of non -Homekey+ operating funds. For each year of demonstrated operating funds, Homekey+ will provide an operating award per year matched, up to 5 years. The operating grant from HCD leverages enforceable funding commitments and the City’s commitment of HHAP funds will serve as one of the enforceable funding commitments for operating funds. The proposed Project would seek the maximum $8,400,000 operating award for up to five years for a total request of $27,739,000, up to a maximum of $28,400,000. If HCD awards funding to the City and Urban Capital LLC (Developer), the co-applicant for the Homekey+ funding, the funding would be distributed to City, who would distribute funding at key milestones to Developer to ensure project integrity and key milestones are met.
Urban Capital LLC (Developer), the co-applicant for Homekey+ funding, would purchase the property and develop the Project for a developer fee. A property management company, who would be brought onboard by the Developer prior to construction completion, would operate the Project and oversee the leasing, maintenance, and operations of the Project. The Project budget includes two full -time property management staff, tenant and community functions and activities, and security. The Project would be rental units and tenants would enter into a lease and pay no more than 30% of their income, capped at 30% of the area median income (AMI) in rent. Utilities and internet access for tenants will be included and paid for by the Project. The Project would have a deed-restriction with a 55-year affordability covenant as required by the Homekey+ Program. A supportive services provider would provide four full-time case managers, at a caseload of 1:25, who would provide and coordinate services for tenants. Sacramento County Behavioral Health Services will provide behavioral health services to clients who need and request those services, and clients connected to CalAIM will continue to receive those enhanced care management supports as well. Veteran clients will also continue to receive veteran specific services.
Policy Considerations: The application for the State Homekey+ funding and provision of HHAP funding to the Project will aid in the development of additional housing in the City, which is supported by the City’s General Plan, specificallyPolicy H-36: Support Affordable Housing Development in the City of Sacramento Housing Element that speaks to providing support for funding applications and gap financing.
In addition, the financing of permanent supportive housing projects is consistent with the Sacramento Regionally Coordinated Homelessness Action Plan (RCHAP), adopted in March 2024. The Project
File ID: 2025-00875 5/13/2025 Item 20.
supports Solution 6 - Permanent Supportive Housing, which seeks to expand housing opportunities and capacity dedicated to meet the housing needs of people experiencing homelessness.
Economic Impacts: Not applicable.
Environmental Considerations: This report concerns actions supporting the submission of an application for HomeKey+ funds. The action is an administrative activity that would not result in direct or indirect physical changes in the environment and is not a project as defined in the California Environmental Quality Act (CEQA) Guidelines section 15378(b)(4) and is not subject to CEQA (CEQA Guidelines section 15060(c)(3)). In the event that the application for the State Homekey+ funding and commitment of City HHAP funding is approved, future activities and projects will be reviewed in accordance with CEQA Guidelines sections 15060 and 15061(a).
Sustainability: Not applicable.
Commission/Committee Action: Not applicable.
Rationale for Recommendation: The recommendation in this report furthers the City’s objective of providing a range of housing for community needs, including permanent supportive housing. Staff are supportive of the Project as it will assist in the timely development of housing for people experiencing homelessness.
Financial Considerations: This report carries out the necessary steps to apply for Homekey+ funding. This report also recommends commitment of City HHAP-4 and HHAP-5 permanent supportive housing (PSH) funding in the amount of $1.5 million to receive the maximum funding for operating costs available through the Homekey+ Program. A total of $1.5 million in HHAP PSH is recommended to be committed to the Project, with $1,049,254 coming from the HHAP-4 PSH Project (G02000984) and $450,746 coming from the HHAP-5 PSH Project (G02000995), and sufficient funding exists in both projects to support the Homekey+ project.
Local Business Enterprise (LBE): Not applicable.
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RIO LINDA BLVD. SITE PLAN CONCEPT
AUTHORIZING RESOLUTION
RESOLUTION NO. 2025-
Rio Linda Senior Housing Project
Adopted by the City Council of the City of Sacramento
May 13, 2025
A RESOLUTION OF THE CITY COUNCIL OF THE CITY OF SACRAMENTO AUTHORIZING JOINT APPLICATION TO AND PARTICIPATION IN THE STATE OF CALIFORNIA’S HOMEKEY+ PROGRAM FOR THE RIO LINDA SENIOR HOUSING PROJECT
BACKGROUND
A. The State of California’s Department of Housing and Community Development (“HCD”) has issued a Notice of Funding Availability, dated November 26, 2024 (“NOFA”), for the Homekey+ Program (“Homekey+” or “Program”). HCD has issued the NOFA for Homekey+ grant funds pursuant to Health and Safety Code Section 50675.1.3 (Assem.
Bill No. 140 (2021-2022 Reg. Sess.), § 20.); Health and Safety Code Section 50675.1.5 (Assem. Bill No. 531 (2023-2024 Reg. Sess.); Section 14184.402 of the Welfare and Institutions Code; Section 5891.5 of the Welfare and Institutions Code; and Round 5 and 6 of the Homeless Housing, Assistance and Prevention (“HHAP”) grant program. (Assem. Bill No. 129 (Chapter 40, Statutes 2023) and Assem. Bill No. 166 (Chapter 48, Statutes 2024), respectively.
B. The City of Sacramento (Applicant) desires to jointly apply for Homekey+ grant funds with Urban Capital LLC (Co-Applicant), who is the developer for the Rio Linda Senior Housing Project located at 2809, 2811, and 2821 Rio Linda Boulevard. Therefore, Applicant is joining Co-Applicant in the submittal of an application for Homekey+ funds (Application) to HCD for review and consideration.
C. HCD is authorized to administer Homekey+ pursuant to the Multifamily Housing Program (Chapter 6.7 (commencing with Section 50675) of Part 2 of Division 31 of the Health and Safety Code). Homekey+ funding allocations are subject to the terms and conditions of the NOFA, the Application, the HCD-approved STD 213, Homekey+ Standard Agreement (“Standard Agreement”), and all other legal requirements of the Homekey+ Program.
BASED ON THE FACTS SET FORTH IN THE BACKGROUND, THE CITY COUNCIL RESOLVES AS FOLLOWS:
Section 1. The City Council is hereby authorized and directed to submit a joint Application to HCD in response to the NOFA, and to jointly apply for Homekey+ grant funds in a total amount not to exceed $28,400,000.
Section 2. If the Application is approved, the Standard Agreement in a total amount not to exceed $28,400,000 will be brought back to the City Council for approval and Council authorization will be sought to enter into, execute, and deliver the Standard Agreement and any and all other documents required or deemed necessary or appropriate to secure the Homekey+ funds from HCD and to participate in the Homekey+ Program, and all amendments thereto (collectively, the “Homekey+ Documents”).
Section 3. Applicant acknowledges and agrees that it shall be subject to the terms and conditions specified in the Standard Agreement, and that the NOFA and Application will be incorporated in the Standard Agreement by reference and made a part thereof. Any and all activities, expenditures, information, and timelines represented in the Application are enforceable through the Standard Agreement. Funds are to be used for the allowable expenditures and activities identified in the Standard Agreement.
Section 4. The City Manager or the City Manager’s designee is authorized to execute the Application on behalf of the Applicant for participation in the Homekey+ Program.
Section 5. If the Application for funding is approved, the City Manager or the City Manager’s designee is authorized to commit $1,500,000 of City HHAP permanent supportive housing funding towards the Rio Linda Senior Housing Project, with $1,049,254 coming from HHAP-4 (G02000984) and $450,746 from HHAP-5 (G02000995). Agreements $250,000 or more involving expenditure of the $1,500,000 HHAP funding will be brought to City Council for approval.
PASSED AND ADOPTED by the City of Sacramento City Council on _______, 2025, by the following vote:
Ayes:
Noes:
Abstain:
Absent:
The undersigned, [NAME, TITLE of ATTESTOR] of the City of Sacramento does hereby attest and certify that the foregoing is a true and full copy of a resolution of the governing body adopted at a duly convened meeting on the date above-mentioned, and that the resolution has not been altered, amended, or repealed.
Signature:_________________________ Date:___________________________
Name:____________________________ Title:____________________________
Rio Linda Senior Housing Project
Authorization to Apply for Homekey+
City Council Meeting
May 13, 2025
Homekey+ Background
● Three prior rounds of Homekey have been awarded by the State Department of Housing and Community Development (HCD) to sustain and rapidly expand housing for people experiencing homelessness.
● SHRA has secured Homekey funding for four motel conversion to permanent supportive housing projects in the City (La Mancha, Vista Nueva, Central Sacramento Studios and the Rodeway Inn).
● The City has secured Homekey funding for two transitional housing projects (Saint John’s Program for Real Change and WEAVE).
2 Homekey+ Background
● Proposition 1, passed by California voters in March 2024, includes the Behavioral Health Infrastructure Bond Act (BHIBA), the main funding source for Homekey+. ● At the end of November 2024 (amended in January 2025), HCD and CalVet, released a Notice of Funding Availability (NOFA) for $2.145 billion of Homekey+ grant funding for permanent supportive housing statewide. o Includes regional funding allocations, with Sacramento Geographic Region allocated $101 million
o Applications first-come, first-served until deadline of May 30, 2025 3 4
Proposed Project Details
• Location: 2809-2821 Rio
Linda Blvd.
• 100 units on 2.41 acres
(42 du/ac), all ADA
• Population: Seniors and
senior veterans
• Geographic Target:
District 2
• 240 sf studio units with
kitchenettes and
bathroom/showers
• 38 parking stalls,
community garden, park
space, shared laundry,
separate storage areas,
gated entry, community
gathering space
Conceptual Site Plan
5 • BOSS Homes - HCD approved
housing units, Chapter 11B
compliant
• Building Code & Title 24
compliant
• Luxury vinyl flooring, aluminum
windows
• Steel entry door with electronic
door lock
• Smoke detector
• Electrical panel and outlets
• In-wall AC/Heater
• Sink, toilet, shower
• Refrigerator, 2 burner
cooktop/hood, microwave
Proposed Project Details
For illustrative purposes only. Design will be enhanced during the entitlement / Planning process
6 Proposed Project Details
Project Funding Details
7 • Requesting up to $20 million from Homekey+ for the capital costs (site acquisition, unit purchase and assembly, site work and infrastructure) which does not require a match ($200,000/unit cost).
• Commits $1.5 million City HHAP funds and with other enforceable funding commitments, requests the maximum $8.4 million Homekey+ operating award for up to 5 years.
• Permanent supportive housing – clients will be tenants with leases and paying rent up to 30% of their income up to 30% AMI.
• Project will be deed restricted for 55 years at 30% AMI.
Project Staffing and Supportive Services
8 • Staffing and Supportive Services include:
o Two full-time property managers and on-site security for after hours o Four full-time on-site case managers providing and coordinating supportive services
o County Behavioral Health Services will provider services to clients who need and request those services
o Clients connected to CalAIM will continue to receive those services o Veteran clients will receive veteran specific services from veteran providers • City will act as lead service provider and RFP and contract out for on-site case management.
Project Impacts
9 Project is a part of the
City’s focused effort on
addressing
unsheltered
homelessness in the
area.
Expansion of Roseville
Road Campus, street to
housing program and this
project, is an opportunity
to make a significant
impact on homelessness in
this area by bringing at
least 300 households
inside.
Adding 100 rental
housing units for people
experiencing
homelessness supports
the economic vitality
and growth in the area.
10 Contacts
Brian Pedro, Director of Community
Response
[email protected]
(916) 808-7816
Ya-yin Isle, City Housing Manager
[email protected]
(916) 808-1869