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APPROVAL OF POLICY DIRECTION FOR THE REALLOCATION OF PERMANENT LOCAL HOUSING ALLOCATION FUNDING
recommended action
RECOMMENDATION
Staff recommends that the Legislative Committee approve the policy direction of moving Permanent Local Housing Allocation (PLHA) funding previously designated in 2022 and 2023 as matching funds in a Local Housing Trust Fund for rental and owner-occupied housing, to a homebuyer assistance category, use developed and administered by the City. This shift in category spending will allow the City to develop and implement a down-payment assistance program for the City.
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Summary
Staff are requesting that the Legislative Committee hear and discuss the policy direction for moving funding from a previously anticipated Local Housing Trust Fund to a City-based Downpayment Assistance program. Absent an ongoing revenue source for the creation of a Local Housing Trust Fund, staff have determined that the highest and best use for the reallocation of PLHA funding is the creation of a Downpayment Assistance program and to augment the rental housing development program.
In reviewing needs within the it has been determined that creating a program to help residents move from renters to homeowners is an ambitious but needed endeavor within the source funding allowable uses. As the City continues to support the stability and addition of housing at many levels, including homeless shelters, transitional housing, supported rental (voucher-assisted), and self-sufficient rental; it is believed that a missing link to improving generational wealth and stability lies with helping working individuals and families make the leap to home ownership.
The Downpayment Assistance program will be drafted, pending Council’s approval of the amendment to the PLHA use of funds plan, and brought back to the Legislative Committee for review and approval, prior to full Council approval.
DISCUSSION
Background
Through its current PLHA funding application, EDD is requesting authorization to amend the 2019-2023 PLHA Plan, moving remaining funds from a match-funds use with a Local Housing Trust Fund for rental and owner-occupied housing, to the PLHA homebuyer assistance category. This would allow the City to bring back a homebuyer assistance program. As directed by HCD’s PLHA program guidelines, the five-year plan amendment will be submitted by the City and reviewed by HCD, prior to state approval of the plan modification.
Present Situation
The final approval of the amendment of funding use requires a 10-day public comment period which will begin on May 1, 2026 and end on May 12, 2026 with a public hearing to be held at the May 12, 2026 City Council meeting. Bringing the policy discussion of desire/need for a downpayment assistance program before the Legislation Committee will provide public discussion beyond the required 10-day public comment period, ensuring that Committee members are informed and supportive of such future actions.
FINANCIAL SUMMARY
There is no impact to the General Fund as the funding involved in the attached actions is supported through and governed by state grant funding (PLHA) with oversight from HCD.