REPORT TO THE HOUSING AND COMMUNITY DEVELOPMENT COMMISSION July 15, 2020 FROM: JENNIFER CLARK, Director Planning and Development Department THROUGH: THOMAS MORGAN, Housing Manager Housing and Community Development Division KAREN JENKS, Administrative Manager Housing and Community Development Division BY: EDWARD CHINEVERE, Senior Management Analyst Housing and Community Development Division SUBJECT ..Title Actions pertaining to the Permanent Local Housing Allocation 5-Year Plan: 1. HEARING to obtain public comments regarding the Draft Permanent Local Housing Allocation 5-Year Plan; and 2. Recommendation to the City Council to authorize submission of a five-year Plan to the California Housing and Community Development Department in application for funding from the Permanent Local Housing Allocation (PLHA) for the development of affordable multifamily and single family housing, owner occupied home rehabilitation, and down payment assistance to benefit low- and moderate- income persons. ..Body RECOMMENDATION Staff recommends the Housing and Community Development Commission conduct a public hearing to obtain citizen comments regarding the PLHA 5-year plan, then recommend the City Council authorize submission of the PLHA five-year Plan to the California Housing and Community Development Department (California HCD). EXECUTIVE SUMMARY The PLHA provides a source of annual funding for housing activities that address the needs identified in the City's Housing Element which primarily benefit low- and moderate-income persons. California HCD requires the City to submit a 5-year Plan outlining how funding will be allocated to the activities eligible for funding, which is required for the City to receive its first-year allocation of $3,407,603. If adopted, first-year funds will be used for the development of 11 affordable rental units and four single-family homes; the rehabilitation of four homes; and down payment assistance for 20 first-time homebuyers. BACKGROUND California Senate Bill 2 was signed by the Governor on September 29, 2017, creating a source of funding for the PLHA from a recording fee imposed on real estate documents, and providing the framework for allocating and administering the funds. California HCD announced the availability of $195 million of the 2019 funds deposited into the account for local governments to administer eligible activities. California HCD uses the formula developed to allocate the Community Development Block Grant (CDBG) funds administered by the U.S. Department of Housing and Urban Development (HUD) to allocate the PLHA funds to Local Entitlement Governments, including the City of Fresno (City). The City's first-year allocation is $3,407,603. Annual allocations will fluctuate based on variability in the collection of the recording fee that funds the program, and changes in the CDBG allocation formula, which are driven primarily by demographic changes. California HCD requires the City to prepare a five-year Plan describing how the program funds will be allocated over the Plan timeframe. The Plan identifies which of the nine eligible activities the City will fund with the program. For each activity, the Plan outlines the median income of beneficiaries, the projected number of beneficiaries, and the period of affordability for the activity if applicable. The Plan is due July 27, 2020 in order for the City to receive funding in 2020. Changes of +/- 10% to activity allocations in subsequent years require a Plan amendment to include a public hearing. A major goal of the PLHA is to provide affordable owner-occupied workforce housing (AOWH) defined as housing that is affordable to persons and families of low or moderate income, and requires that at least 20% of the Plan be allocated for this purpose. The City's Plan allocates 40% to AOWH. . All activities are also required to be consistent with the City's adopted Housing Element. The City's Plan addresses eligible activities that are included among the Housing Element programs, with special focus on activities for which alternative funding sources are not available. The activities included in the City's five year Plan are: * 28.5% of annual allocation for the development of multifamily rental housing affordable for very low-income persons through low-interest deferred loans to project sponsors with a period of affordability of 55 years, with development focused in areas of opportunity. o First-year funding: $971,100 * 28.5% of annual allocation for the construction of single-family homes affordable to low-income persons, also focusing development in areas of opportunity. o First-year funding: $971,100 * 28.5% of annual allocation for a down payment assistance program for low- and moderate-income first-time home buyers. o First-year funding: $971,100 * 9.5% of annual allocation for owner-occupied home rehabilitation, focusing on low-income persons not eligible for funding through other programs, such as mobile home residents. o First-year funding: $323,923 * Additional funds will be used by the City to administer the program, limited to 5% of the total award. o First-year funding: $170,380 Following adoption of the Plan, City staff will prepare one or more Notices of Funding Availability (NOFA) to identify eligible organizations with the capacity and expertise to provide the activities described in the Plan, and will return to the City Council with recommended subrecipients following a competitive selection process to be outlined in a NOFA. If an eligible and qualified organization is not available, the City may consider providing the services directly. Citizen Participation * June 26, 2020: Public Notice distributed via Fresno Bee * June 26, 2020: English and Spanish language public notice distributed on social media, through HCDD email distribution list, and City Clerk website * Week of June 26, 2020: Public notice read in Hmong on KBIF radio * July 1, 2020: Spanish Language Notice distributed via Vida en el Valle * July 3, 2020: Webinar outlining plan details published to City website * July 3, 2020: Draft documents published to HCDD website and City Clerk website for 10-day public comment period * July 3, 2020: Availability of draft documents and webinar communicated to HCDD email distribution list and on social media * July 15, 2020: Public Hearing at a meeting of the Housing and Community Development Commission * July 15, 2020: End of 10-day public comment period Public comments received and corresponding City responses will be presented to the City Council prior to Council consideration. ENVIRONMENTAL FINDINGS This is not a project for purposes of CEQA pursuant to CEQA guidelines Section 15378. Furthermore, these Plans, strategies and studies are an exempt activity under HUD NEPA Requirements (24 CFR 58.34 (1)). LOCAL PREFERENCE Local preference is not applicable because of state funding. FISCAL IMPACT Adoption of the Plan will allow the City to receive grant funds of $3,407,603 for eligible housing activities. Attachments: Summary Public Draft of Permanent Local Housing Allocation 5-Year Plan