DATE: MARCH 5, 2024
DEPARTMENT: COMMUNITY DEVELOPMENT
FROM: LISA BRINTON, DIRECTOR
THROUGH: ROD POWELL, ASSISTANT DIRECTOR
FRANCISCO BRAMBILA, ACTING PLANNING MANAGER
LUIS OCHOA, SR. COMMUNITY DEVELOPMENT ANALYST
BY: DAVID VIGIL, ADMINISTRATIVE ANALYST
TITLE: APPLICATION TO THE CALIFORNIA DEPARTMENT OF
HOUSING AND COMMUNITY DEVELOPMENT FOR THE PROHOUSING INCENTIVE PROGRAM ROUND 2 RECOMMENDED MOTION:
A motion to approve a Resolution authorizing:
the submission of a Prohousing Incentive Program Round 2 application to the California Department of Housing and Community Development (HCD), and if awarded; the City Manager or designee to accept Prohousing Incentive Program Round 2 Program funds and execute all required Agreements and related documents necessary to implement the program; and the establishment of an HCD PIP Round 2 appropriation of up to $1,250,000 for allowable predevelopment, development, acquisition, rehabilitation, and preservation of affordable multifamily, residential live-work, and rental housing as well as assistance to persons who are experiencing or at risk of homelessness.
EXECUTIVE SUMMARY:
On January 23, 2024, the California Department of Housing and Community Development (HCD) released a Notice of Funding Availability (NOFA) and application for its Prohousing Incentive Program (PIP) Round 2 to support the creation and preservation of affordable housing. The PIP intends to increase participation in HCD’s Prohousing Designation Program (PDP) by offering designated jurisdictions with opportunities to apply for significant incentive awards based upon a regional geographic categorization and the jurisdiction’s PDP application score. Eligible applicants who have not received PIP funding in Round 1 will be given funding priority in PIP Round 2 with any remaining amounts then becoming available to previously awarded jurisdictions. Under PIP Round 1, the City was awarded $1,650,000. Based upon a PIP Round 2 base amount of $750,000 for the Central Coast area and the City’s prior high PDP score of 58, Salinas could receive an award of up to $1,250,000.
BACKGROUND:
HCD’s PDP originates from the 2019-2020 Budget Act under Assembly Bill 101 Housing Development and Financing. In response to calls for immediate action to address the State’s housing crisis, the legislature tasked HCD with establishing and administering a PDP to enable jurisdictions that have adopted local measures, programs and incentives that go beyond existing state law to encourage and facilitate the development of housing within its jurisdiction. The City applied to the PDP on March 8, 2023, and received its designation on April 5, 2023, with a score of 58 point. A minimum score of 50 points was required to receive designation.
HCD’s PIP is a complementary initiative to its PDP. Under the PIP, grants are offered for a range of housing and community development-related planning, or implementation activities as described in Health and Safety Code Section 50470(b)(2)(D). Under PIP Round 1, the City was granted $1,650,000 allocated to two activities: Affordable Housing Program (AHP) and First Time Homebuyer Down Payment Assistance Program (FTHDAP).
In January 2024, HCD released its second PIP NOFA making an additional $9.5 million in funds available to cities and jurisdictions that have received a Prohousing Designation. HCD has set a deadline of March 15, 2024, for submission of PIP Round 2 applications. Based upon its regional geographic categorization and population, the City is eligible to receive a baseline PIP Round 2 award of $750,000 plus a bonus award of $10,000 for each point granted under its PDP application. Although the City scored 58 points on the PDP, HCD has capped the Round 2 bonus award amount at $500,000, resulting in a potential total award of $1,250,000. If awarded PIP Round 2 funds, the City’s intended application would allocate an additional $750,000 towards the AHP and the remaining $500,000 towards programs and services assisting persons who are experiencing or at risk of homelessness, including providing rapid rehousing, rental assistance, navigation centers, emergency shelters, and the new construction, rehabilitation, and preservation of permanent and transitional housing. The attached draft PIP Round 2 application provides a summary of proposed activities. PIP Round 2 funds are to be spent by May 2027.
HCD Prohousing Incentive Program Round 2
Affordable Housing Program (AHP)
$750,000
Assisting persons who are experiencing or at risk of homelessness $500,000
Total
$1,250,000
CEQA CONSIDERATION:
Not a Project. The City of Salinas has determined that the proposed action is not a project as defined by the California Environmental Quality Act (CEQA) (CEQA Guidelines Section 15378). Page | 3 In addition, CEQA Guidelines Section 15061 includes the general rule that CEQA applies only to activities which have the potential for causing a significant effect on the environment. Where it can be seen with certainty that there is no possibility that the activity in question may have a significant effect on the environment, the activity is not subject to CEQA. Because the proposed action and this matter have no potential to cause any effect on the environment, or because it falls within a category of activities excluded as projects pursuant to CEQA Guidelines section 15378, this matter is not a project. Because the matter does not cause a direct or foreseeable indirect physical change on or in the environment, this matter is not a project. Any subsequent discretionary projects resulting from this action will be assessed for CEQA application.
STRATEGIC PLAN INITIATIVE:
Submission of a PIP Program Round 2 application to HCD supports City of Salinas Strategic Plan 2022-2025 Goals and Strategies of Housing/Affordable Housing by providing critical funding to increase affordable housing production and supporting those at risk of losing housing.
DEPARTMENTAL COORDINATION:
The HCD PIP Round 2 application has been developed by the Community Development Department (CDD) staff in consultation with the City Attorney.
FISCAL AND SUSTAINABILITY IMPACT:
Acceptance of HCD PIP Round 2 funds, if awarded, will result in the establishment of a HCD PIP Round 2 program fund appropriation and corresponding allocation of up to $1,250,000. There is no required local match.
ATTACHMENTS:
Resolution – City
Resolution – State
City of Salinas PIP Program Application – Draft
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