REPORT TO THE CITY COUNCIL FROM: JENNIFER CLARK, Director Planning and Development Department PHIL SKEI, Assistant Director Planning and Development Department BY: ERIKA LOPEZ, Senior Management Analyst Housing and Community Development Division SUBJECT ..Title Approve an American Rescue Plan Act (ARPA) funding agreement with the Fresno Housing Authority City of Fresno in the amount of $1,000,000 for a Voucher Incentive Program. ..Body RECOMMENDATION Staff recommends the City Council approve the agreement between the City of Fresno and the Fresno Housing Authority City of Fresno (FHA) allocating $1,000,000 in ARPA funding to provide a Voucher Incentive Program and authorize the City Manager or designee to sign all necessary implementing agreements as approved to form by the City Attorney. EXECUTIVE SUMMARY Through its pilot incentive program, FHA has successfully added 130 additional homes available to low-income families. Staff is proposing to use $1 million in ARPA funds to build on upon that success and fund a Voucher Incentive Program (VIP) that will benefit up to 600 low-income families. If approved, the VIP will provide $350,000 in landlord signing incentives, $200,000 to a damage repair fund for landlords, $100,000 for vacancy loss payments, $250,000 for security deposit and credit check assistance, and $100,000 for FHA's administration of the program. BACKGROUND On April 27, 2022, the Dyer Administration unveiled its One Fresno Housing Strategy which outlined 47 priorities to address Fresno's three-year housing needs. One of the 47 recommendations contained within the One Fresno Housing Strategy placed priority on establishing a landlord Voucher Incentive Program (VIP) by way of a one-time allocation from the City's American Rescue Plan Act funding. FHA launched a six-month incentive pilot program, which resulted in approximately 130 additional homes made available for low-income families (92 new to the program, 38 reinstated after year(s) of not renting to voucher holders). Staff is proposing to use $1 million in ARPA funds for the VIP to build upon the success of FHA's incentive pilot program. The VIP is intended to expand the services and success of the pilot program and ultimately improve the leasing success for the existing voucher holders. The VIP will recruit new landlords and reinstate landlords who have been absent from participation for more than 12 months. The VIP will provide assistance for up to 600 low-income families through the additional affordable housing units added from the incentives provided to landlords. To be eligible for incentives, landlords must sign and execute a twelve-month lease. The incentives available for landlords through the VIP will include: * Signing incentives in the form of a one-time payment to landlords who rent a unit to a voucher household. * Damage repair fund that will assist landlords with excessive tenant-caused damages of units upon move out. * Vacancy loss payments to provide a monetary incentive to new landlords to compensate for missed days of rental income. * Security deposits and credit check assistance for expenses associated with security deposits, application fees, first and last month rent deposits, utility deposits, and credit check fees. Units owned by new and reinstated landlords will be matched to VIP participants in the order of prioritization. A prioritization will be placed on both the voucher holders and the landlords, with the most vulnerable populations being matched with housing units first and private landlords with no more than ten units and no code violations in the last 12 months being the priority to receive assistance. The proposed ARPA agreement would provide FHA $1,000,000 in ARPA funds from January 01, 2023 - October 31, 2024, with authority for the City Manager's Office to extend the program through December 31, 2025 for the VIP to include: $350,000 in landlord signing incentives, $200,000 to a damage repair fund for landlords, $100,000 for vacancy loss payments, $250,000 for security deposit and credit check assistance, and $100,000 for the administration of the program. ENVIRONMENTAL FINDINGS By the definition provided in the California Environmental Quality Act (CEQA) Guidelines Section 15378, these recommendations do not qualify as a "project" as defined by CEQA. LOCAL PREFERENCE Local preference is not applicable because of the use of federal funding. FISCAL IMPACT The agreement will be funded through the American Rescue Plan Act funding and will not impact the general fund. ATTACHMENTS: ARPA Agreement with Fresno Housing authority City if Fresno.