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RESOLUTION AUTHORIZING THE CITY TO APPLY FOR, RECEIVE AND APPROPRIATE PERMANENT LOCAL HOUSING ALLOCATION PROGRAM (PLHA) FUNDS FROM THE CALIFORNIA DEPARTMENT OF HOUSING AND COMMUNITY DEVELOPMENT PURSUANT TO SENATE BILL 2 (SB2)
recommended action
RECOMMENDATION
It is recommended that City Council adopt a resolution to:
1. Authorize the City Manager, or designee, to apply for, accept and appropriate Permanent Local Housing Allocation (PHLA) grant funds in the amount up to $2,053,716 per year for the next five (5) years for a total allocation of $10,268,580 from the California Department of Housing and Community Development;
2. Approve the PLHA Plan of implementation of eligible housing activities as identified in Exhibit 1 to the resolution;
3. Authorize the City Manager, or designee, to administer the City’s entitlement of Permanent Local Housing Allocation (PLHA) funds, to enter into all required agreements to receive the PLHA funds, and amend the City’s budget accordingly; and
4. Authorize the City Manager, or designee, to take appropriate and necessary actions to carry out the purpose and intent of the resolution and motion.
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Summary
Staff is requesting authorization to apply for Permanent Local Housing Allocation Program (PLHA) grant funding from the California Department of Housing and Community Development (HCD), and if awarded, approval for the City Manager to accept and administer the PLHA grant funds. The Building Homes and Jobs Trust Fund and the PLHA program were created to implement Senate Bill 2 (SB 2) signed into law that allocates 70% of funds collected from recording fees of various real estate transactions for eligible housing and homelessness activities.
DISCUSSION
Background
HCD is currently accepting applications for the PLHA Grant Program. The PLHA Grant Program set aside approximately $195 million to provide funding to local jurisdictions for the expansion of affordable housing units to help meet the City’s future Regional Housing Needs Allocation (RHNA). This is a non-competitive grant opportunity that does not require a local match in order to receive the funds. The grant application filing due date is July 27, 2020.
In 2013, the San Joaquin Council of Governments (SJCOG) adopted the RHNA for the 5th Cycle Housing Element Projection Period (2015-2023) mandating the City of Stockton provide sufficient zoned land for 11,824 residential units, consisting of 4,560 above moderate, 2,103 moderate, 2,004 low, 1,482 very low, and 1,675 extremely low income units. RHNA allocations are intended to be used by jurisdictions when updating their housing elements as the basis for assuring that adequate sites with appropriate zoning are available to accommodate, at a minimum, the number of units required based on the City’s current and projected population. California is in the midst of a housing crisis and RHNA numbers will likely increase. There is an insufficient supply of affordable housing in the City of Stockton and low-income residents are increasingly cost burdened expending more than 30% of their income on housing.
Based on the City’s Housing Element Annual Progress Reports, the City of Stockton, on average, increased its housing stock by approximately 500 units per year. This increase, in part, is due to the City’s Development Code and General Plan amendments that have incorporated pro housing policies for multi-family and infill development, including expedited permitting, revised fee structure, prioritizing infrastructure improvements and property owner and/or landlord incentives to maintain properties and reduce blight.
The PLHA funding will further assist in preserving and increasing the current housing stock of a variety of housing types in Stockton.
Present Situation
The City is committed to increasing the availability of affordable housing for its most vulnerable residents, those with incomes at or below 60% of the area median income. The PLHA Notice of Funding Availability was released on February 26, 2020 and grant applications are due to the State by July 27, 2020. Staff recommends using these grant funds to expand the City’s affordable housing stock, support homeownership, and to potentially seed an Affordable Housing Trust Fund.
Eligible PLHA activities include:
• The predevelopment, development, acquisition, rehabilitation, and preservation of multi-family, residential live-work, rental housing that is affordable to extremely low to moderate-income households (ranging from 30% to 120% of Area Median Income), and ownership housing for low to moderate income households.
• Funds may be used as the matching portion required by the State to apply for the Local Housing Trust Fund Program grant.
• Assisting homeless or those at risk of homelessness, including rapid rehousing, rental assistance, supportive services, operating and capital costs for navigation centers and emergency shelters, and construction, rehabilitation, and preservation of permanent and transitional housing.
A Notice of Funding Availability (NOFA) will be issued this summer that will align with City needs and eligible activities, including increasing homeownership and creating new affordable housing units. It is anticipated that funding recommendations will be presented to the City Council for approval in the fall.
Further, PLHA funds will be used in future years to explore the creation of an Affordable Housing Trust Fund and to use as seed money to apply for State Local Housing Trust Fund grant dollars.
FINANCIAL SUMMARY
There is no impact to the General Fund, or any other restricted fund, from this action. The PLHA Grants Program will allow the City to receive and appropriate up to $10.2 million of affordable housing funds over a five-year period, with no match requirement.