DATE: MARCH 21, 2023
FROM: MEGAN HUNTER, DIRECTOR
DEPARTMENT: COMMUNITY DEVELOPMENT DEPARTMENT
THROUGH ROD POWELL, PLANNING MANAGER
LUIS OCHOA, SR. COMMUNITY DEVELOPMENT ANALYST
PREPARED BY: HILDA PERALTA, COMMUNITY DEVELOPMENT ANALYST TITLE: UNITED STATES DEPARTMENT OF HOUSING AND URBAN DEVELOPMENT HOME INVESTMENT PARTNERSHIP PROGRAM AMERICAN RESCUE PLAN ALLOCATION PLAN RECOMMENDED MOTION:
A motion to approve a Resolution authorizing:
the submission of an updated HOME Investment Partnership Program American Rescue Plan (HOME-ARP) Allocation Plan (AP) to the United States Department of Housing and Urban Development; and the City Manager or designee to execute any required Agreements necessary to support the acceptance of funds and implementation of its HOME-ARP AP; and an increase of up to $2,772,835 to the HOME-ARP fund appropriation and corresponding revenue budget.
EXECUTIVE SUMMARY:
In Fiscal Year 2021, the City of Salinas (City), as a United States Department of Housing and Urban Development (HUD) entitlement jurisdiction, was allocated $2,918,774 of a one-time HOME American Recovery Plan (HOME-ARP) funding from HUD. HOME-ARP funds must be used to primarily benefit individuals or families who meet established qualifying population criteria.
As described in HUD Notice CPD-21-10: Requirements of the Use of Funds in the HOME-American Rescue Plan Program, the four qualifying populations include: 1) families or individuals who are homeless; 2) currently housed and at risk of homelessness; 3) those fleeing or attempting to flee domestic violence, sexual assault victims, stalking or human trafficking populations; and 4) those at greatest risk of housing instability where providing support services or assistance would prevent homelessness. HOME-ARP funds may be used to fund four key activities: 1) production and preservation of affordable housing; 2) tenant-based rental assistance; 3) provision of supportive services such as homeless prevention and housing counseling; 4) and the acquisition and development of non-congregate shelter.
BACKGROUND:
In order to receive a HOME-ARP allocation, the City is required to develop an Allocation Plan (AP) derived from solicited community engagement with and input from community service providers, stakeholders, non-profit and for-profit developers, the general public and other organizations serving the four main qualifying populations. In accordance with the HOME-ARP requirements, development of the AP must include a consultation process, a needs assessment, and a gap analysis which is then used to develop a qualified summary of the City’s planned use of funds and an estimate of housing units to be produced and/or created.
On October 4, 2022, the Salinas City Council approved the submission of an initial HOME-ARP AP to HUD. Following this submission, on December 5, 2022, HUD staff requested that the City provide additional perspective and information prior to granting final AP approval. More specifically, HUD staff recommended that the City consider the stipulation of allowable preferences and conduct additional consultation with community stakeholders in order to fully demonstrate its efforts to obtain input and perspective in support of the proposed AP, incorporate any applicable revisions, and resubmit its plan for final review by the stipulated March 31, 2023 deadline. In consideration of HUD’s recommendations, the City’s updated AP includes an expanded consultation with stakeholders, a complete gap analysis of all qualifying populations, and sets preferences among the qualifying populations to prioritize applicants for HOME-ARP projects or activities. Based upon HUD’s recommendation and the City’s newly incorporated revisions, a second public hearing and accompanying City Councils approval is now required prior to resubmittal.
DISCUSSION:
Consultation, Assessment, and Gap Analysis
As part of its lengthy, required HOME-ARP AP consultation process, City staff diligently connected, engaged, and consulted with the local CA-506 Continuum of Care (CoC); homeless social services, and domestic violence service providers; veterans’ groups; public housing agencies; individuals defined as members of each qualifying population; agencies that address fair housing, civil rights, and the needs of persons with disabilities; other community stakeholders; and members of the general public. To achieve the robust response necessary to formulate a compliant and considerate HOME-ARP AP, staff utilized various methods to gather information and targeted engagement opportunities to inform the community and request input. This included targeted participation in community and regional partnership meetings, one-on-one consultations, email blasts, social media announcements, online surveys, and website postings. These consultations revealed strong support for permanent supportive housing and supportive service activities such as case management, housing counseling, substance abuse treatment, and financial assistance for housing related costs.
Opportunities for public participation and comment on the planning, development, and review of the proposed AP were publicized and disseminated in accordance with the City’s Citizen Participation Plan (CPP). Public participation during the development of the AP included a 30-day public comment period, community meetings, an electronic survey, newspaper ads, social media announcements, and two public hearings. Upon completion of the consultation process and evaluation of community input, it was determined that permanent supportive housing through the rehabilitation of motels or hotels was scored as the highest priority followed by a secondary priority for supportive service activities supporting mental health and substance abuse treatment, transportation, and financial assistance for housing related costs.
In accordance with HOME-ARP guidance, the City’s AP needs assessment and gap analysis also included an evaluation of the size and demographic composition of each HOME-ARP qualifying population. Data from the 2022 Monterey County Homeless Count, 2020 American Community Survey, 2021 Continuum of Care Housing Inventory Count, and the 2014-2018 Comprehensive Housing Affordability report were each used to analyze and determine the unmet needs of each qualifying populations. This resulted in a determination that the City currently has fourteen (14) projects with bed inventory (8 emergency shelter, 2 rapid rehousing, 3 transitional housing, and 1 permanent supportive housing) and a resulting total capacity of 501 beds. Based on this analysis, the City has a significant need gap in beds needed for adult households without children.
Determination of Community Need
Locally, the Continuum of Care (CoC) is coordinated by the Coalition of Homeless Services Providers (CHSP) in partnership with the City of Salinas. In 2009, the CoC developed an initial Lead Me Home Plan (LMHP), to serve as a framework to guide local jurisdictions (counties and cities), service providers, and other key stakeholders in maximizing available resources in an effort to strategically impact and reduce homelessness. The most recent update to the LMHP includes a data-focused, milestone-based action plan which establishes measurable goals and targets focused on reducing local homelessness by 50% over the next five years (July 2021 through June 2026).
This plan sets out to align available funding to support the activities identified in each year of the action plan and includes an essential year-one activity of continued investment in acquisition and conversion of motels to affordable, permanent supportive housing units available through the State of California’s Homekey Program. Additional LMHP goals include the need for increased investment in housing navigation services and housing focused case management. These collaborative efforts are highlighted in the City’s HOME-ARP AP as it serves an important regional framework with specific target goals. Additionally, input obtained from local service providers during the City’s HOME-ARP AP consultation process also revealed a strong need and preference to support outreach, mental health services, case management, housing and financial counseling, and financial assistance. Each of which is addressed within the permanent supportive nature of the Homekey model.
The City of Salinas, in partnership with Shangri-La Construction, LP. and Step Up on Second Street, Inc., facilitated the acquisition of three Homekey sites to provide a total of 204 new permanent supportive housing units. Each site will offer residents permanent, affordable housing coupled with supportive services including case management, employment assistance, referrals to mental health services, peer support training, and transportation services. Annual costs to provide this necessary supportive housing environment is just under $6,000 per unit per year.
Recommended Plan Allocation
One-time HOME-ARP funding must be spent by 2030. In consideration of the information and data gathered and assessed during the HOME-ARP AP development process staff are recommending that 15% of the City’s HOME-ARP allocation ($437,816.10) be used for allowable program administration and planning activities and that the allocation’s remaining 85% ($2,480,957.90) be directed toward much needed supportive service funding associated with two of three Homekey permanent supportive housing sites (Step Up on Sanborn and Step Up on Fairview) as well as other “bed generating” projects. It is estimated that up to ninety-nine (99) Homekey units for qualifying populations could be supported with the recommended HOME-ARP Allocation Plan. This recommendation is strongly supported by the robust input provided by local service providers, stakeholders, and other community organizations during the consultation process.
Based on the need and gap analysis and the recommendation of HUD staff, the City also proposes to exercise the allowable identification of preferences among the qualifying populations to prioritize applicants for HOME-ARP projects or activities. More specifically, the City’s AP will prioritize single adults who meet the definition of homeless (as defined in 24 CFR 91.5) for having the greatest need for housing and supportive services. All potential interested and eligible Homekey residents benefitting from this proposed HOME-ARP fund use would be referred through the local CARS and HMIS entry systems administered by the CHSP. Veterans and those fleeing, or attempting to flee domestic violence, or human trafficking are considered to be the second highest priority qualifying population and are also eligible to receive direct referrals to housing partners.
CEQA CONSIDERATION:
The City of Salinas has determined that authorizing the submittal of the HOME-ARP AP to HUD is not a project as defined by the California Environmental Quality Act (CEQA) Guidelines section 15378 as this matter does not cause a direct or indirect physical change on the environment. Subsequent discretionary projects resulting from this action will be assessed for CEQA applicability. Activities utilizing federal funds are also subject to the National Environmental Policy Act (NEPA) and will be evaluated prior to expending any funds.
STRATEGIC PLAN INITIATIVE:
The HOME-ARP Program is intended to assist qualifying populations with permanent housing options and supportive services. Submission of the City’s HOME-ARP AP supports the City of Salinas 2022-2025 Strategic Plan Strategies and Goals of Housing/Affordable Housing and Effective.
DEPARTMENTAL COORDINATION:
The HOME-ARP AP is administered by the City’s Community Development Department Housing and Community Development Division with coordination and support from the Finance Department and City Attorney.
FISCAL AND SUSTAINABILITY IMPACT:
It is estimated that the City is eligible to receive a total HOME-ARP allocation of $2,918,774 upon approval of its Allocation Plan is approved. Of this amount, the City has previously received and initial, partial amount of $145,938.70 to support development and initial administrative costs associated with the AP. The City’s remaining HOME-ARP allocation balance of $2,772,835 will be appropriated as an increase to the existing HOME-ARP Program fund.
ATTACHMENTS:
Resolution
HOME-ARP Allocation Plan – revised
PPT HOME-ARP Allocation Plan
CITY OF SALINASSTAFF REPORTCITY OF SALINASSTAFF REPORT
CITY OF SALINAS
STAFF REPORT
CITY OF SALINAS
STAFF REPORT