City Council
Report
City Council Meeting: February 28, 2023
Agenda Item: 5.F
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To: Mayor and City Council
From: David Martin, Director, City Planning
Subject: Adoption of Resolutions Authorizing the City Manager to Submit Applications to Participate in the California Department of Housing and Community Development's Prohousing Designation Program and a Prohousing Incencentive Program (PIP) Grant in the Amount of $500,000 Recommended Action
Staff recommends that the City Council:
1. Adopt a finding of no possibility of significant effect pursuant to Section 15061(b)(3) (Common Sense Exemption) of the California Environmental Quality Act (CEQA) Guidelines and find that uses of grant funding for affordable housing are consistent with the certified 6th Cycle Housing Element Environmental Impact Report.
2. Adopt the attached resolution authorizing the City Manager to submit an application to participate in the California Department of Housing and Community Development’s Prohousing Designation Program;
3. Adopt the attached resolution authorizing the City manager to submit an application for grant funds in the amount of $500,000 from the California Department of Housing and Community Development’s Prohousing Incentive Program (PIP) for planning and implementation activities related to housing and community development, to support implementation of the certified Housing Element;
4. Authorize the City Manager to execute all necessary documents to apply for the grant, accept the grant, if awarded, and accept all grant renewals and modifications, if awarded; and
5. Authorize budget changes as outlined in the Financial Impacts and Budget Actions section of this report, in the event the grant is awarded.
Summary
Staff seeks authorization to apply for and participate in the State of California’s Housing and Community Development (HCD) Prohousing Designation Program and to apply for grant funding through HCD’s Prohousing Incentive Pilot (PIP) Program. The Prohousing 2 of 4
Designation program creates incentives for jurisdictions that are compliant with Housing Element requirements and that have enacted Prohousing Policies. These incentives include additional points or other preference in the scoring of applications for competitive housing and infrastructure programs.
Discussion
On October 14, 2022, HCD certified the City’s 6th Cycle 2021-2029 Housing Element. A key focus of the certified Housing Element is housing production, with substantial emphasis on affordable housing production, to meet Santa Monica’s Regional Housing Needs Allocation (RHNA) as mandated by Government Code Section 65584.05.
The City’s 6th Cycle RHNA for the next 8 years is 8,895 units, of which 69% are to be affordable units.
Income
Category
RHNA Target
(# units)
% of
RHNA
Very Low 2,794 31%
Low 1,672 19%
Moderate 1,702 19%
Above Moderate 2,727 31%
Total 8,895 100%
The certified 6th Cycle Housing Element is a State-mandated plan for meeting the City’s share of regional housing needs. State law requires that the Housing Element include an inventory of land that demonstrates the City’s capacity to realistically accommodate its RHNA of 8,895 units, of which 69% must be affordable to lower income households.
Government Code section 65589.9 established HCD’s Prohousing Designation Program, which provides incentives to cities and counties in the form of additional points or other preference in the scoring of competitive housing, community development, and infrastructure programs. The Prohousing Incentive Pilot (PIP) Program is a state investment from the Building Homes and Jobs Trust Fund, established by Chapter 364, Statutes of 2017 (SB 2, Atkins) to create and conserve affordable housing. The PIP program provides awards for eligible jurisdictions to use towards planning and implementation activities related to housing and community development. Award 3 of 4
amounts are based on population estimates. With a population of approximately 93,000, the City is eligible for $500,000 in award funding.
The PIP program awards funds to encourage cities and counties to obtain Prohousing Designation. This round of program funding provides awards for eligible jurisdictions to use towards planning and implementation activities related to housing and community development. To support implementation of the certified Housing Element, grant funds would be used in the category of predevelopment, development, acquisition, rehabilitation, and preservation of 100% affordable housing on City-owned sites.
With a limited amount of vacant land in Santa Monica, and amid rising construction costs, the City in recent years has explored the potential for City-owned sites to help meet its affordable housing needs. Program 2.E of the certified Housing Element commits City-owned sites for the production of 100% affordable housing, with consideration of other community-serving purposes, including, but not limited, to green space, place making, and/ or community-serving commercial and revenue generating uses. Under Program 2.E, the City has committed to plan for a minimum of 1,880 affordable housing units across available City-owned sites located throughout the city.
Application of this one-time PIP program grant would occur concurrently with application of the Prohousing Designation program for the City. Grant funding would be used towards predevelopment, development, acquisition, rehabilitation, and preservation of 100% affordable housing on City-owned sites, in support of the Program 2.E and other related programs in the Housing Element.
Environmental Review
Application to and participation in the Prohousing Designation Program, and application and acceptance of the Prohousing Implementation Program grant is exempt from the California Environmental Quality Act (CEQA) pursuant to Section 15061(b)(3) (Common Sense Exemption) in that participation in the programs and acceptance the grant would have no possibility of significant effects. Furthermore, the proposed uses of grant funding for affordable housing are consistent with the goals, programs and policies set 4 of 4
forth in the adopted and certified 6th Cycle Housing Element EIR, including Program
2.E which commits the City to the production of affordable housing on publicly owned land.
Past Council Actions
Meeting Date Description
10/14/22 City Council adopts the 6th Cycle 2021-2029 Housing Element
Financial Impacts and Budget Actions
Staff seeks authority to apply for a grant from the Department of Housing and Community Development’s Prohousing Incentive Program (PIP). If awarded, staff recommends the following budget changes. If renewals are awarded, budget changes will be included in subsequent year budgets, contingent on Council budget approval.
FY 2022-23 Grant Budget Changes
Establish Revenue Budget Appropriate Funds
Account Number(s) Amount Account Number(s) Amount
20700002.4XXXXX 500,000 20700002.5XXXXX 500,000
Total 500,000 Total 500,000
Prepared By: Rachel Kwok, Environmental Planner
Approved Forwarded to Council
Attachments:
A. Council Resolution Prohousing Designation
B. CCD - Reso - Application for Prohousing Incentive Pilot - 021423