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Report regarding a Resolution authorizing application for, and receipt of, State Prohousing Incentive Program funds. (Nell Selander, Economic & Community Development Director)
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RECOMMENDATION
Recommendation
Staff recommends City Council adopt a Resolution authorizing application for, and receipt of, Prohousing Incentive Program funds from the State of California Housing and Community Development Department (HCD).
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BACKGROUND/DISCUSSION
In summer 2023, the City received a Prohousing designation from HCD. This designation followed an application made by the City to HCD, demonstrating that it had sufficient policies and programs in place to merit the designation. The City pursued the designation because it results in priority points for various State grant applications that many of our affordable housing developers pursue, such as the Affordable Housing and Sustainable Communities (AHSC) Grant and the Infill Infrastructure Grant (IIG).
Another benefit of the Prohousing designation is that the City has access to a special allocation of State funding only available to Prohousing-designated jurisdictions. This program is called the Prohousing Incentive Program (PIP). To date, just two rounds of PIP funding have been made available and the City is eligible for this year’s Notice of Funding Availability (NOFA), which includes $9.5 million in funding. Each Prohousing jurisdiction has a maximum formula award. Based on the City’s designation and Prohousing score, the City is eligible for a maximum award of $890,000. Designated jurisdictions with an eligible application that do not receive an award in this NOFA round are put at the top of the priority list in the next NOFA round, so the City’s likelihood of getting an award increases over time.
Proposed Project
Staff submitted the attached PIP application on March 15, 2024, proposing to use the prospective $890,000 award to acquire a single room occupancy (SRO) building within the next two years. The purpose of this acquisition would be to create or preserve affordable housing in the community. The proposal is aligned with recent Council actions, including approval of the acquisition of several buildings containing SRO units on Grand Avenue. Additionally, one other SRO owner has reached out to City staff about selling, so there would be a backup project, should the City need one. Staff has also found that once awarded funds, HCD is often quite accommodating regarding shifting project scope to achieve the same outcome - creation or preservation of affordable housing. A two-year time horizon to spend the funds would provide the City some flexibility in deploying the funds.
The purpose of this staff report and associated resolution is to authorize the application and the potential receipt of funds.
FISCAL IMPACT
There is no impact to the General Fund associated with adopting this resolution. Should the grant be awarded, it would likely be used to replace dollars that the City would otherwise spend from its Commercial Linkage Fee Fund (Fund 823). If awarded, staff would return to Council to accept and appropriate the funding and for further guidance on the project on which to spend the funds.
CONCLUSION
Staff recommends Council adopt a Resolution authorizing application for, and receipt of, PIP funds from HCD.
Attachments:
1. SSF PIP Round 2 Application