PLHAccmtg2-12-24(klk)
CITY OF SIMI VALLEY
MEMORANDUM
F
ebruary 12, 2024
TO
: City Council
F
ROM: Department of Environmental Services
S
UBJECT: ADOPTION OF A RESOLU TION AUTHORIZING THE CITY MANAGER
TO EXECUTE ASSOCIATED DOCUMENTS FOR PERM ANENT LOCAL
HOUSING ALLOCATION FOR NOTICE OF FUNDING AVAILABILITY
(NOFA) YEARS 2021, 2022, AND 2023 GRANT FUNDS, AND APPROVAL
OF A SUPPLEMENTAL BU DGET REQUEST TO ESTA BLISH BUDGET
AUTHORITY FOR NOFA YEAR 2023 GRANT FUNDS
STAFF RECOMMENDATION
I
t is recommended that the City Council:
1. Adop
t Resolution No. 2024-04 (page 6) authorizing the City Manager to execute associated documents related to the streamlined application for PLHA NOFA Years 2021, 2022, and 2023;
2. Approve a Supplemental Budget Request to establish budget authority for NOFA Year 2023.
BACKGROUND AND OVERVIEW
T
he State o f California’s Senate Bill 2 ( SB2) passed in 2017 , is part of a housing package aimed at addressing the state’s housing shortage and high housing costs.
Specifically, SB2 established a permanent funding source intended to increase the affordable housing stock in California. Permanent Local Housing Allocation (PLHA) entitlements are specifically funded through the Building Homes and Jobs Act of SB2, which established a $75 recording fee on real estate documents.
Revenues are expected to fluctuate annuall y based on the real estate market’s activity.
P
LHA provides financial assistance to local governments to help implement plans to facilitate housing affordability , particularly for lower -income households , assisting persons experiencing or at risk of home lessness, and increase assistance to affordable owner -occupied workforce housing. The City’s PLHA funds may be used through the City’s established Homebuyer’s Assistance Program to provide households, earning up to 150% of the Area Median Income, with equity share loans up to 20% of the purchase price for a home of their choosing.
AGENDA ITEM NO.
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PLHAccmtg2-12-24(klk)
FINDINGS AND ALTERNATIVES
In October 2022, the City Council adopted Resolution No. 2022-56 approving a five-year PLHA plan (Plan) amendment and authorized the application for grant funds for NOFA Years 2021 and 2022. At the same time, the City Council also adopted Resolution No. 2022-57 approving the City’s Homebuyer Assistance Program. Due to delays in receiving State approval of the City’s Housing Element, the prior application for NOFA Years 2021 and 2022 were deemed ineligible for consideration at the time of submission and were required to be resubmitted during the 2023 NOFA application period, after the City’s Housing Element was approved. The 2023 NOFA was released in late December 2023 and requires applications for NOFA Year 2021 funds no later than February 29, 2024, to maintain the City’s eligibility to receive the funding.
The Homebuyers Assistance Program, while approved in October 2022, required additional approvals and disbursement of funds by the State’s Housing and Community Development (HCD) Department resulting in significant delays to launching the program.
However, staff has begun community outreach on the program and anticipates funding the initial loans in the coming months. Program activity will be subject to availability of funding, which will be impacted on how quickly HCD approves the streamlined application and executes an amended standard agreement, which then allows staff to request the disbursement of the City’s remaining allocation as detailed in the 2023 NOFA Streamlined Application (Attachment A, page 5). HCD has acknowledged the delays in disbursing funds and has eliminated prior requirements related to commitment of prior year’s funds before disbursing new allocations. This will allow for an infusion of financial assistance to homebuyers and is anticipated to result in more frequent and timely disbursement of funds going forward.
The approved Program supports homeownership opportunities in the following ways:
• Serves income levels up to 150% Area Median Income ( AMI) with preference provided to households up to 60% AMI for household size and qualifying income levels);
• Allows households to select housing from the open market to best meet their needs in terms of size, location, and amenities;
• Allows households who face housing instability due to changes in household composition, economic downturns, relocation needs, or downsizing to receive assistance without requiring them to meet the definition of a first-time homebuyer; • Incentivizes households to hold homes for more than ten years, creating stronger community connection and investment in neighborhoods;
• Establishes equity share based on the tenure of ownership and City contribution to allow households to improve their overall financial position and exit the affordable housing market, which allows future support for additional households; 2 PLHAccmtg2-12-24(klk)
• Allows for cash- out refinancing for home improvement credits for capital improvements upon sale to encourage and support investment in the maintenance of the City’s housing stock;
• Allows households to maintain housing cost ratios between 25% and 35% to provide long-term affordability; and
• Provides up to 20% down payment assistance based on a max debt-to-income ratio of 45% and a max housing cost ratio of 35%, which accommodates for fluctuations in real estate values and cost of financing.
The funding allocated during each NOFA is determined by the prior calendar year’s real estate transactions by county. The City has allocated all of its funding to support the Homebuyers Assistance Program including the maximum of five (5%) percent of the annual grant amount to offset the City’s administrative costs.
Table 1 – Summary of PLHA Plan for the 2019-2023 Allocations by NOFA Year
NOFA Year Allocation Amount Status Budget Authority
2020 $290,357 Received Yes
2021 $451,305 Application Pending Yes
2022 $496,647 Application Pending Yes
2023 $254,876 Application Pending Requested
2024 N/A N/A N/A
The City ’s anticipated allocation over the Plan’s five-year period (NOFA Years 2020- 2024) was initially estimated to total $1,742,142; however, the most recent allocation for NOFA Year 2023 reflects a decrease in real estate activity related to the current market conditions of high prices and high interest rates. While this Plan period may reach the initial allocation estimate, it is important to note that future year allocations will be contingent upon the volume of real estate transactions and may limit the loan assistance the City is able to offer.
The Supplemental Budget Request establishing budget authority in Fund 208 for the receipt of the NOFA Year 2023 revenues and expenditures (including City’s administrative costs) is detailed in the table below:
Table 2 – Supplemental Budget Request
The following alternatives are available to the City Council:
Account Amount
2089306-36002 $254,876
2089306-44120 $242,133
2089306-46100 $12,743
1008010-45208 $12,743
3 PLHAccmtg2-12-24(klk)
1. Adopt Resolution No. 2024-04 authorizing the City Manager to execute documents associated with the 2023 NOFA streamlined application;
2. Approve a Supplemental Budget Request in Fund 208 to establish budget authority for NOFA Year 2023 allocation;
3. Provide alternate direction.
St
aff recommends Alternative Nos. 1, and 2.
SUGGESTED CITY COUNCIL MOTION
I move t
o adopt Resolution No. 2024-04 and approve a Supplemental Budget Request in the amount of $254,876 in Fund 208 (PLHA Fund) to establish budget authority for the NOFA Year 2023 allocation.
SUMMARY
Th
e State’s SB2 provides funding for the Permanent Local Housing Allocation ( PLHA), which is an annual allocation intended to provide financial assistance to local governments to help implement plans to facilitate housing affordability, particularly for low-income to moderate- income households. It is recommended that the City Council adopt a resolution authorizing the City Manager to execute associated documents for the 2023 NOFA streamlined application and approve a Supplemental Budget Request to establish budget authority for the NOFA Year 2023 allocation. ______
_________________for
St ratis Perros
Environmental Services Director
Prepared by: Mara Malch, Deputy Environmental Services Director INDEX Page
Attachment A – 20 23 NOFA Streamlined Application..............................................5 Resolution No. 2024-04............................................................................................6 4 PLHA Page 1 Formula Allocation Application
Yes
Yes
Yes
§302(c)(8) If a program income reuse plan was not submitted with the 2020 application, has Applicant attached a program income reuse plan describing how repaid loans and/or accrued interest will be reused for eligible activities specified in Section 301? File Name: Application and Plan Adoption
Reso
Simi Valley
[email protected] Rep. Email: Phone:
File Name: Reuse Plan Program Income Reuse Plan describing how repaid loans or accrued interest will be used for eligible activities in Section 301. Uploaded to HCD? Auth Rep Name:
Yes
Yes
§302(c)(4)(D) Evidence that the Plan was authorized and adopted by resolution by the Local jurisdiction and that the public had an adequate opportunity to review and comment on its content.
PLHA webpage for Application and Plan Adoption Resolution Document Uploaded to HCD?
Contact Phone:
Simi ValleyCity:
Yes
Zip Code:
805-583-6701
State:
Date
Certifications
Brian Paul Gabler
Authorized Representative Printed Name
City Manager
Title
On behalf of the entity identified below, I certify that: The information, statements and attachments included in this application are, to the best of my knowledge and belief, true and correct and I possess the legal authority to submit this application on behalf of the entity identified in the signature block.
Signature
Local Government Formula Allocation Rev. 01/23/24
This streamlined application form is limited to Applicants who applied for and received an award from the 2020, 2021, and/or 2022 Formula Allocation NOFA.
Yes
CA Zip: 93063 VenturaState:
§302(c)(2) Applicant certifies that submission of the application was authorized by the governing board of the Applicant.
Threshold Requirements
Title:
93063
§302(b) Applicant and Delegating Local Government have submitted the current or prior year's Annual Progress Report to the Department of Housing and Community Development pursuant to Government Code Section 65400. Yes Did Applicant receive an award from the 2020, 2021, and/or 2022 NOFA Formula Allocation? Title: Deputy ES Director
State:
Contact Email:
City Manager
2929 Tapo Canyon Road
805-583-6758
CA
[email protected]
§300(e) Applicant does not have uncommitted PLHA funds greater than permitted by Section 300(e). Yes §503(b) Applicant has submitted the PLHA Annual Report by July 31 (if applying before July 31), or has submitted the PLHA Annual Report due by July 31 (if applying on or after July 31). Yes
Zip Code:
2929 Tapo Canyon RoadAddress:
Mara Malch
CA
City: 93063
Yes
§302(a) Housing Element compliance: Applicant and Delegating Local Government's if applicable Housing Element was adopted by the Local Government’s governing body by the application submittal date and subsequently determined to be in substantial compliance with state Housing Element Law pursuant to Government Code Section 65585.
Simi Valley
Yes
Contact Name:
Address:
Which NOFA year(s) are you applying for with this application? 2021 - 2023 2020 PLHA NOFA Formula Allocation Amount: $0.00$0
$451,305
$496,647
$254,876
Allowable Local Admin (5%):
Allowable Local Admin (5%):
Allowable Local Admin (5%):
Allowable Local Admin (5%):
Admin requested?
Admin requested?
Eligible Applicant Type: Entitlement
Local Government Recipient of PLHA Formula Allocation:
Admin requested?
Admin requested?2023 PLHA NOFA Formula Allocation Amount: $12,743.00 2022 PLHA NOFA Formula Allocation Amount:
Has Applicant received their 2022 NOFA funds?
$24,832.00
Simi Valley
2021 PLHA NOFA Formula Allocation Amount: $22,565.00
§300(a) and (b) Eligible Applicants for the Entitlement and Non-Entitlement formula component described in Section §100(b)(1) and (2) are limited to the metropolitan cities and urban counties allocated a grant for the federal fiscal year 2017 pursuant to the federal CDBG formula specified in 42 USC, Section §5306 and Non-entitlement local governments.
Applicant: City of Simi Valley
Brian P. Gabler
City:
Address:
County:
Instructions: If the Local Government Recipient of the PLHA Formula Allocation delegated its PLHA formula allocation to another Local Government in its 2020 application, the Applicant (for which information is required below) continues to be the administering Local Government, which received the award. The PLHA award will be made to the Applicant (upon meeting threshold requirements) and the Applicant is responsible for meeting all program requirements throughout the term of the Standard Agreement.
Eligible Applicants §300
No Based on the requirements in guideline section 300(e), how much has the applicant committed? $0
2929 Tapo Canyon Road
ATTACHMENT A
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PLHAccmtg2-12-24(klk)
RESOLUTION NO. 2024-04
A RESOLUTION OF THE CITY COUNCIL OF THE CITY OF
SIMI VALLEY APPROVING THE 2023 NOTICE OF
FUNDING AVAILABILITY STREAMLINED APPLICATION
AND AUTHORIZING THE CITY MANAGER TO EXECUTE
ASSOCIATED DOCUMENTS
WHEREAS, the State of California Department of Housing and Community Development (Department) is authorized to provide up to $296 million under the SB2 Permanent Local Housing Allocation Program Formula Component from the Building Homes and Jobs Trust Fund for assistance to Cities and Counties (as described in Health and Safety Code section 50470 et seq.(Chapter 364, Statutes of 2017 (SB 2)); and
WHEREAS the Department issued a Notice of Funding Availability (NOFA) dated December 29, 2023, under the Permanent Local Housing Allocation (PLHA) Program; and
WHEREAS, the City of Simi Valley (Applican t) is either an eligible Local government which has applied for program funds to administer one or more eligible activities or a Local or Regional Housing Trust Fund to whom an eligible Local government delegated its PLHA formula allocation; and
WHEREAS, the Department may approve funding allocations for the PLHA Program, subject to the terms and conditions of the Guidelines, NOFA, Program requirements, the Standard Agreement and other contracts between the Department and PLHA grant recipients; and
WHEREAS, pursuant to Section 302(c)(4) of the Guidelines, Applicant’s PLHA Plan for the 2019- 2023 Allocations was adopted on October 24, 2022, by Resolution 2022- 56 and complied with all public notice, public comment, and public hearing requirements in accordance with the Guidelines.
NOW, THEREFORE, THE CITY COUNCIL OF THE CITY OF SIMI VALLEY DOES HEREBY RESOLVE AS FOLLOWS:
SECTION 1
. If Applicant receives a grant of PLHA funds from the
Department, pursuant to the above referenced PLHA NOFA, it represents and certifies that it will use all such funds in a manner consistent and in compliance with all applicable state and federal statutes, rules, regulations, and laws, including without limitation all rules and laws regarding the PLHA Program, as well as any and all contracts Applicant may have with the Department.
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PLHAccmtg2-12-24(klk)
SECTION 2. Applicant is hereby authorized and directed to receive a PLHA grant, in an amount not to exceed the five-year estimate of the PLHA formula allocations, as stated in Appendix B of the current NOFA in the amount of $1,742,142 in accordance with all applicable rules and laws.
SECTION 3. Applicant hereby agrees to use the PLHA funds for eligible activities as approved by the Department and in accordance with all Program requirements, Guidelines, other rules and laws, as well as in a manner consistent and in compliance with the Standard Agreement and other contracts between the Applicant and the Department.
SECTION 4. Pursuant to Applicant’s certification in this resolution, the PLHA funds will be expended only for eligible a ctivities and consistent with all program requirements.
SECTION 5. Applicant shall be subject to the terms and conditions as specified in the Standard Agreement, the PLHA Program Guidelines and any other applicable SB 2 Guidelines published by the Department.
SECTION 6. The City Manager and/or his/her designees are authorized to execute the PLHA Program Application, the PLHA Standard Agreement and any subsequent amendments or modifications thereto, as well as any other documents which are related to the Program or the PLHA grant awarded to Applicant, as the Department may deem appropriate.
PASSED and ADOPTED this 12th day of February 2024.
Attest:
Lucy Blanco, City Clerk Fred D. Thomas, Mayor of the City of Simi Valley, California
Approved as to Form: Approved as to Content:
Algeria R. Ford, City Attorney Brian Paul Gabler, City Manager
Stratis Perros
Environmental Services Director
7 RES. NO. 2024-04
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