COUNCIL AGENDA REPORT
TO: Mayor and City Council
FROM: Chenin Dow, Director of Community Development
DATE: March 18, 2025
SUBJECT: Adoption of a Resolution Approving Fiscal Year 2024 -25 HOME Consortium Allocation Recommendation
Description:
The City Council will consider adopting a Resolution to approve the use of Fiscal Year 2024-2025 HOME Investment Partnerships funding to be allocated to assist the City of Santa Maria’s Tenant -Based Rental Assistance program and an affordable housing project in Santa Barbara County.
Environmental Notice: The Project qualifies for an Exemption pursuant to Section 15061(b)(3) (common sense exemption) of the California Environmental Quality Act State Guidelines.
RECOMMENDATIONS:
Adopt a Resolution approving the use of Fiscal Year 2024 -2025 HOME Investment Partnerships funding to be allocated to assist the City of Santa Maria’s Tenant -Based Rental Assistance program and an affordable housing project in Santa Barbara County.
BACKGROUND:
HOME Investment Partnerships (HOME) is a Federal program that funds affordable housing programs and projects that benefit low-to moderate-income households. HOME funding comes from the U.S. Department of Housing and Urban Development (HUD).
The City has participated in the HOME program for decades, with a brief intermission during the Fiscal Year (FY) 2016-17 when the City voted to apply for HOME funding. The City was unsuccessful and returned to the County’s Consortium a year later. Currently, the City is under contract with the Santa Barbara County Consortium as both a participating jurisdiction and a sub -recipient. As a sub-recipient, the City uses part of its funds to administer the Tenant -Based Rental Assistance (TBRA) program. The TBRA program provides one -time security deposit assistance of up to $2,500 to income - qualifying households renting a place in Santa Maria. The program began in 2010 and has assisted more than 1,250 local households. There is no other program of its kind currently operating in the City.
The remaining amount of the City’s HOME funding has historically gone to an affordable housing development project in Santa Maria. Examples of recent affordable housing 2 development projects in Santa Maria include Sierra Madre Cottages ($1,114,988 HOME funds and $285,012 in Santa Barbara County Inclusionary Housing In -Lieu funds for 40 senior units), Residences at Depot Street ($1,994,459 HOME funds and $1,178,978 in Santa Barbara County Inclusionary Housing In -Lieu funds for 80 units), W est Cox Cottages ($1,350,000 Homeless Emergency Aid Program, $1,500,000 No Place Like Home and $450,000 in County In -Lieu Fees, for 30 units), and Good Samaritan Shelter for its Pine Street Bungalows II project ($291,137 HOME funds for the new construction of 4-bedroom, 3-bath house, serving a former homeless household).
DISCUSSION:
The City of Santa Maria will receive $299,499 in HOME funding from the County’s Consortium for FY 2024 -25. It is proposed that the City use part of the funding for its TBRA program and the remaining balance to assist a project within the County of Santa Barbara. On November 15, 2023, the County of Santa Barbara, the lead agency and fiscal agent for the HOME Consortium, issued a Notice of Funding Availability (NOFA) in anticipation of 2024-25 HOME funds. The County of Santa Barbara has a list of potential local projects that can utilize HOME funding. For this reason, the staff recommends that $149,499 of the overall FY 2024-25 HOME funding be used at the discretion of the County HOME Consortium unless a viable affordable housing project within the City of Santa Maria (that qualifies for HOME funding) expresses interest. Allowing the County of Santa Barbara’s HOME Consortium to fund an area project with the City’s allocation is d one from time to time when the City does not have a viable project eligible for the funds, or an affordable housing developer wants to use the funds, or the HOME commitment deadline of funds is fast approaching. In turn, the City of Santa Maria has benefit ed from the County’s portion of HOME funds in recent years.
As for the City’s TBRA program, the staff recommends that $150,000 of FY 2024 -25 HOME funding be allocated to this program. By approving this proposed allocation, the City can continue offering the TBRA program seamlessly from one fiscal year to another.
The recommended amount should be sufficient to cover the average number of TBRA applications that come into the City, as the additional TBRAs that will come forward with the construction of new housing units.
Alternative(s)
An alternative would be to use the entire $299,499 for TBRA; however, even with the increased security deposits the City is now offering, the City has historically never spent more than $150,000 in one year. Another option is t o allocate the City’s full amount to a housing project in the county.
Fiscal Considerations
The proposed action will provide $150,000 to the City’s successful TBRA program, which continues to serve dozens of residents in the community every year. Due to a lack of HOME-eligible housing projects proposed in Santa Maria, the remaining amount will be retained by the HOME Consortium to be used in a future affordable housing project within the county. The City’s general fund will not be affected by this action.
3 Impact on the Community
The proposed action will benefit the community by continuing to provid e affordable housing to Santa M aria residents with TBRA and help create additional affordable housing in the County of Santa Barbara.
ATTACHMENTS:
A. Resolution – FY 2024-25 HOME Funding