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RESOLUTION AUTHORIZING THE CITY TO APPLY FOR AND RECEIVE PERMANENT LOCAL HOUSING ALLOCATION PROGRAM (PLHA) FUNDS FROM THE CALIFORNIA DEPARTMENT OF HOUSING AND COMMUNITY DEVELOPMENT AND TO AMEND THE PLHA PLAN
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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 for years 2022 and 2023 in the amount up to $2,591,751 for both years for a total allocation of up to $10,268,580 for the five-year program period from the California Department of Housing and Community Development;
2. Approve the Amendment to the 2019-2023 PLHA Plan to reallocate funds between program categories;
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
The Economic Development Department (EDD) is requesting authorization to apply for and receive Permanent Local Housing Allocation Program (PLHA) funds for program years 2022 and 2023 and to amend the 2019-2023 PLHA Plan to reallocate funds between program categories.
DISCUSSION
Background
The California Department of Housing and Community and Development (HCD) was created under the SB 2 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)). The PLHA program was created as a state policy response to address housing shortage challenges, designed to create a permanent, locally controlled funding stream for affordable housing and homelessness interventions. The City of Stockton is an eligible local government that has applied for PLHA program funds to administer one or more eligible activities.
Pursuant to Resolution 2021-05-25-1204 (Attachment A), the City’s Economic Development Department (EDD) applied for and was allocated an estimated amount of $10,268,580 in PLHA funds over a five-year span beginning in 2019. The City’s 2019-2023 PLHA Plan was designed to allocate PLHA funds for the development of multifamily rental housing, fund owner-occupied rehabilitation, use as match funds to a local housing trust fund for rental and owner housing, programs that provide homeownership opportunities, and for program administration costs.
HCD requires a participating jurisdiction (PJ) (in this case, the City) to apply each year to receive its annual award. To date, the City has applied for and secured PLHA funding allocations for years 2019, 2020, and 2021 and has allocated and/or disbursed those funds to support several affordable housing projects including Grand View Village Apartments, Sonora Square Apartments, and Fairview Terrace Apartments, in addition to funding owner-occupied rehab projects for local residents.
The PLHA NOFA guidelines for program years 2022 and 2023 were released by HCD in October 2022 and December 2023, respectively, allowing PJ’s up to 48 months to apply. In alignment with PLHA program guidelines, HCD has directed City staff to submit one application for both years’ allocations.
In addition to the application for program years 2022 and 2023 funds, EDD staff recommends the following:
• Reallocating funds between several eligible activities. The original five-year PLHA plan contemplated the use of PLHA funds as match funds, from program years 2022 and 2023, to a Local Housing Trust Fund for rental and owner housing development. However, the Local Housing Trust Fund was not created, as a dedicated ongoing revenue source was not established to keep the fund ongoing. Therefore, staff recommend that the highest and best use for the reallocation of PLHA funding is the creation of a first-time homebuyer assistance program as well as to augment the City’s rental housing development. This reallocation would make available approximately $2.9 million for a first-time homebuyer assistance program.
• Besides the reallocation of funds from the local housing trust fund activity to the homebuyer activity and rental housing development, funds will also be reallocated from the owner-occupied housing rehabilitation category to the homebuyer assistance category for years 2019 to 2021 and to the affordable rental housing category for years 2022 and 2023.
The above-described reallocation of funds is depicted in Attachment B.
If approved, PLHA guidelines require an amendment to the City’s five-year PLHA plan. Pursuant to PLHA program guidelines, the proposed five-year plan amendment triggers a requirement that 40% of the City’s 2022 and 2023 program year allocations be dedicated to homeownership housing activities. The five-year plan amendment, as recommended, will satisfy this requirement. Attachment B reflects this requirement.
Present Situation
The PLHA allocations for years 2022 and 2023 are $1,467,196 and $1,124,555, respectively, for a total of $2,591,751. The application deadline was February 28, 2026 and EDD submitted a preliminary application to HCD on February 23, 2026. However, to formally secure the 2022 and 2023 PLHA allocations, the City must submit an authorizing resolution along with a Council approved PLHA Streamlined + Amendment application (Exhibit 1 to the Resolution) for HCD approval consideration.
On April 20, 2026, staff presented this item to the Legislation/Environmental Committee and received approval by Motion 2026-04-20-0304 (Attachment C) of policy direction for the reallocation of PLHA program funds and direct this item to City Council. The Committee also supported the policy direction of creating and establishing a Homebuyer Assistance Program for Stockton residents. Due to the reallocation of program funds, the PLHA program requires a 10-day public comment period, which started on May 1, 2026, and concludes at the public hearing to be held during the May 12, 2026 City Council meeting.
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 $10,268,580 million of affordable housing funds over a five-year period, with no match requirement.
Attachment A - Resolution 2021-05-25-1204
Attachment B - PLHA Resolution Amendment
Attachment C - Approved Motion 2026-04-20-0304