SUBJECT
Title
RECEIVE AN UPDATE ON AFFORDABLE HOUSING ACCOMPLISHMENTS, AUTHORIZE THE ALLOCATION OF AMERICAN RESCUE PLAN ACT FUNDS FOR AFFORDABLE HOUSING, AND ADOPT A RESOLUTION OF THE SAN DIEGO COUNTY BOARD OF SUPERVISORS PROVIDING AUTHORIZATION TO PARTICIPATE IN THE FOURTH ROUND NOTICE OF FUNDING AVAILABILITY FOR THE NO PLACE LIKE HOME PROGRAM ALTERNATIVE PROCESS ALLOCATION FUNDS (DISTRICTS: ALL)
Body
OVERVIEW
The County of San Diego (County) Health and Human Services Agency (HHSA), Housing and Community Development Services (HCDS), administers a variety of housing programs to increase access to affordable and decent housing options for San Diego County residents. HHSA continues to make progress increasing affordable housing opportunities region wide through the issuance of loans for affordable housing development. HHSA utilizes local, state, and federal resources to provide funding for affordable housing development opportunities. Resources include the local Innovative Housing Trust Fund (IHTF), state Special Needs Housing Program (SNHP), state No Place Like Home (NPLH) program funds, state Permanent Local Housing Allocation (PLHA) program funds, federal HOME Investment Partnership (HOME) program and HOME Investment Partnership - American Rescue Plan (HOME-ARP) funds, federal Community Development Block Grant (CDBG) program funds, Excess County land, and federal Project Based Housing Vouchers (PBV’s). This combination of resources provided funding for 44 developments with 3,390 affordable housing unit estimated to serve 6,780 individuals at initial occupancy. Affordable housing units include 291 NPLH designated, and 264 units supported with PBV’s. Starting with the implementation of the IHTF and integrating other state and federal resources available, HHSA has awarded $175,750,777 in loan funding for the construction and rehabilitation of affordable housing. Funding includes $69,725,812 IHTF, $1,100,000 SNHP, $79,506,758 NPLH, $1,504,774 PLHA, $21,613,433 HOME/HOME ARP, and $2,300,000 CDBG. Additionally, 8 County sites have been set aside for affordable housing throughout the region. All units will remain affordable for 55 to 99 years.
These items support the County’s Framework for Ending Homelessness, specifically Permanent Housing and Support strategic domain. Permanent affordable housing coupled with supportive services is a crucial component of the Framework and the allocation of $12 million of American Rescue Plan Act (ARPA) funding for the creation of permanent supportive housing for extremely low-income households aligns with serving residents at greatest risk of experiencing homelessness.
Today’s actions request the Board receive an update on affordable housing funding efforts including all efforts related to the Innovative Housing Trust Fund, authorize the allocation of $12 million in American Rescue Plan Act (ARPA) funding, and adopt a Resolution to authorize the County to apply for and accept the Competitive Alternative Process County allocation, under the NPLH Fourth Round Notice of Funding Availability (NOFA), a minimum of $29,874,192. The Resolution also states that the County will make mental health supportive services available to support the NPLH units for a minimum of 20 years. Supportive services will be provided by HHSA, Behavioral Health Services. The Resolution is included at Attachment A.
Today’s actions support the County’s vision of a just, sustainable, and resilient future for all San Diego County residents, particularly for historically underserved communities. Additionally, today’s actions renew the County’s support of the regional Live Well San Diego vision by ensuring low-income residents have access to suitable living environments, as well as enhancing the quality of life for residents by encouraging decent and affordable housing, which promotes a healthy, safe, and thriving region.
RECOMMENDATION(S)
CHIEF ADMINISTRATIVE OFFICER
1. Find that the proposed action is not subject to the California Environmental Quality Act (CEQA) as specified under Section 15060 (c)(3) of the state CEQA Guidelines because the activity in question is administrative in nature and is not a project as defined in CEQA Guidelines Section 15378.
2. Receive an update on affordable housing accomplishments.
3. Adopt a Resolution entitled:
A RESOLUTION OF THE SAN DIEGO COUNTY BOARD OF SUPERVISORS PROVIDING AUTHORIZATION TO PARTICIPATE IN THE FOURTH ROUND NOTICE OF FUNDING AVAILABILITY FOR THE NO PLACE LIKE HOME PROGRAM COMPETITIVE ALTERNATIVE PROCESS ALLOCATION FUNDS.
4. Approve the use of $12 million of American Rescue Plan Act (ARPA) funding allocated for Homeless Services under the County of San Diego’s ARPA Framework for the creation of permanent supportive housing for extremely low-income households.
5. Authorize the Agency Director, Health and Human Services Agency, or designee, to issue Notices of Funding Availability, publish notices, award contracts and execute agreements, amend existing contracts as needed to reflect changes to services and funding, execute certification forms, prepare and execute all necessary documents for the submittal, regulatory processing and implementation, and take any other actions necessary to allocate No Place Like Home funding related to Recommendation 3, and American Rescue Plan Act funding related to Recommendation 4, as applicable.
6. In accordance with Section 401, Article XXIII of the County Administrative Code, authorize the Director, Department of Purchasing and Contracting, to issue Competitive Solicitation(s) for the No Place Like Home Program funds and American Rescue Plan Act funding; and upon successful negotiations and determination of a fair and reasonable price, award one or more contracts; award contracts for an Initial Term of up to one (1) year, with four (4) one-year Option Periods, and up to an additional six months, if needed; and to amend the contracts to reflect changes in program, funding, or service requirements, subject to the availability of funds and the approval of the Agency Director, Health and Human Services Agency.
EQUITY IMPACT STATEMENT
The success of affordable housing programs reported to the San Diego County Board of Supervisors (Board) today, contribute to the County of San Diego’s efforts in addressing local housing shortages and increase access to quality affordable housing. Additionally, these efforts result in the creation of private sector jobs and economic opportunities in San Diego County. It is anticipated that County residents in need will benefit from the developments assisted by local, State, and federal affordable housing funding resources. Units created provide housing for low-income families, seniors, veterans, developmentally disabled individuals, homeless individuals, and other special needs groups through-out affordability period.
The limited supply of affordable housing places a financial burden upon many County residents. According to the Center on Budget and Policy Priorities, 4 in 10 low-income people in the United States are either homeless or paying more than half of their income on housing. In San Diego County, 81% of extremely low-income households pay more than half of their income on housing costs as reported by the California Housing Partnership.
The County’s affordable housing efforts make units available to extremely low- (30% AMI), very low- (50% AMI), and low-income (80% AMI) individuals and households. Below for reference are the maximum income limits at each income level. Further, units funded with NPLH funds provide housing for extremely low-income homeless or chronically homeless individuals with a serious mental illness. The NPLH funds along with the $12 million ARPA funding for permanent supportive housing for extremely low-income individuals and households provide resources for the most vulnerable members in the region.
|
Area Median Income |
1 - Person Household |
4 - Person Household |
|
30% (extremely low income) |
$25,450 |
$36,350 |
|
50% (very low income) |
$42,450 |
$60,600 |
|
80% (low income) |
$67,900 |
$97,000 |
County affordable housing efforts span the region. Below is a summary of recent investments in affordable housing. This includes 10 developments that have completed construction providing 835 units of affordable housing serving low-income individuals and households that will remain affordable for 55 to 99 years.
|
Status |
# of Developments |
# of Units |
Communities Served |
Funding Invested |
|
Upcoming |
21 |
1,601 |
City of San Diego, Carlsbad, Escondido, Oceanside, Ramona, Vista, unincorporated Vista, Santee, National City, |
$63,088,323 179 PBV’s |
|
Under Construction |
13 |
954 |
San Marcos, Alpine, Chula Vista, City of San Diego, Vista, Escondido, Carlsbad |
$85,057,182 |
|
Completed |
10 |
835 |
Poway, El Cajon, City of San Diego, Spring Valley, Vista, Carlsbad |
$27,605,272 85 PBV’s |
Funding was made available in a Notice of Funding Availability (NOFA). The IHTF and HOME/PLHA/PBV NOFAs were competitive NOFA’s and applications must meet minimum requirements to be considered for funding. Funding awards are made to the top scoring developments until all funds are exhausted. The NPLH NOFA is currently open and available for over-the-counter applications. Most recent stakeholder outreach and information regarding IHTF and NPLH funding was presented at the San Diego Housing Federation Roundtable meeting in September 2021. Staff provide technical assistance as needed in response to questions regarding the NOFA and application process. NOFAs are available on the County Housing and Community Development Services webpage and shared via a GovDelivery announcement.
FISCAL IMPACT
Recommendations #1 and #2 - CEQA Guidelines and Receive an update on affordable housing accomplishments.
These recommendations have no fiscal impact. There will be no change in net General Fund cost and no additional staff years.
Recommendations #3, #5 and #6 - Apply for and accept the Competitive Alternative Process County allocation, under the NPLH Fourth Round Notice of Funding Availability (NOFA).
Funds for this request are partially included in the Fiscal Year (FY) 2021-23 Operational Plan in the Health and Human Services Agency (HHSA). If approved, today’s recommendation to apply for the No Place Like Home (NPLH) Program Alternative Process County allocation will result in no change in costs and revenue in FY 2021-22 and anticipated costs and revenue of $29.9 million in FY 2022-23. Upon award of the allocation, full appropriations for Fiscal Year 2022-23 will be requested as part of the Fiscal Year 2022-23 CAO Recommended Operational Plan Change Letter. The funding source is the State of California, Department of Housing and Community Development NPLH Program funds. There will be no change in net General Fund cost and no additional staff years.
Recommendations #4, #5, and #6 - Authorize the allocation of ARPA funding for the creation of permanent supportive housing for extremely low-income households.
Funds for this request are included in the FY 2021-23 Operational Plan in HHSA. If approved, this request will result in no change in costs and revenue FY 2021-22 and costs and revenue of $12 million in FY 2022-23 for permanent supportive housing. The funding source is American Rescue Plan Act (ARPA). There will be no change in net General Fund cost and no additional staff years.
BUSINESS IMPACT STATEMENT
This proposal will have a positive impact on the business community since the recommended actions will result in construction work to be performed at properties that are awarded funding. Contracts resulting from these recommendations may be executed with private sector firms and will involve a competitive bid process. Developments with funding awards are estimated to be completed within the next two to five years.
Details
ADVISORY BOARD STATEMENT
N/A
BACKGROUND
The County of San Diego (County) Health and Human Services Agency (HHSA), Housing and Community Development Services (HCDS), administers a variety of housing programs to increase access to affordable and decent housing options for San Diego County residents. HHSA continues to make progress increasing affordable housing opportunities region wide through the issuance of loans for affordable housing development. HHSA utilizes local, state, and federal resources to provide funding for affordable housing development opportunities. Resources include the local Innovative Housing Trust Fund (IHTF), state Special Needs Housing Program (SNHP), state No Place Like Home (NPLH) program funds, state Permanent Local Housing Allocation (PLHA) program funds, federal Home Investment Partnership (HOME) program and HOME Investment Partnership - American Rescue Plan (HOME ARP) funds, federal Community Development Block Grant (CDBG) program funds, and federal Project Based Housing Vouchers (PBV’s). Below is an update on accomplishments resulting from funding for affordable housing.
State Funding Resources
No Place Like Home Program
On July 1, 2016, Governor Brown signed legislation creating the No Place Like Home (NPLH) program, dedicating $2 billion in State bond proceeds for the development of permanent supportive housing for adults with serious mental illness (SMI) and/or seriously emotionally disturbed (SED) children and adolescents and their families, who are experiencing homelessness, chronic homelessness, or are at-risk of chronic homelessness. Eligible NPLH program activities include financing capital costs of assisted units in rental housing developments, such as costs associated with the acquisition, design, construction, rehabilitation, or preservation of assisted units. NPLH funds may also be used to fund Capitalized Operating Subsidy Reserves (COSR) to address project operating deficits attributable to assisted units.
On July 17, 2017, the State of California, Department of Housing and Community Development (State HCD) issued the final program guidelines for the first-round of funding under the NPLH program. The County is eligible to receive approximately $122.9 million from two separate funding allocation categories. The first category is the Noncompetitive Program Allocation. The allocation available under this category is based on the proportionate number of homeless persons residing in San Diego County compared to the State’s total homeless population. The County was allocated a total of $12.7 million under the Noncompetitive Allocation. On November 13, 2018 (9), the San Diego County Board of Supervisors (Board) authorized the acceptance of Noncompetitive Allocation funds.
The second category is the Competitive Alternative Process County allocation, which is available to counties with at least five percent of the State’s homeless population that can demonstrate capacity to directly administer NPLH program funds. The County is eligible to receive approximately $110.2 million as an Alternative Process County in NPLH program grant funds over the course of four funding rounds. State HCD is making these funds available to counties through multiple Notices of Funding Availability (NOFA). On February 12, 2019 (01), October 15, 2019 (5), and January 12, 2021 (5), the Board authorized the acceptance of Competitive Alternative Process allocations from Rounds one - three. The focus of today’s action is on the Fourth Round Competitive Alternative Process County allocation.
To date 11 developments integrating 291 NPLH assisted units within 1,041 total units have an award of NPLH funding. All NPLH assisted units are designated for adults with serious mental illness (SMI) and/or seriously emotionally disturbed (SED) children and adolescents and their families, who are experiencing or are at-risk of homelessness. One development has completed construction, five developments are under construction, and five developments are securing remaining financing in preparation to start construction.
Permanent Local Housing Allocation Program Grant
In 2017, Governor Brown signed a 15-bill housing package implementing a range of solutions
for California’s high housing costs and shortage of affordable homes. Since then, funding from
the State has become available to local governments through a variety of programs, one of which is the Permanent Local Housing Allocation (PLHA). The PLHA Program is an ongoing source of funding for local governments for programs and projects that address unmet housing needs. The County is eligible to receive a formula PLHA allocation each year within an initial five-year funding cycle. The PLHA program prioritizes investments that increase the supply of housing to households that are at or below 60 percent of the Area Median Income (AMI). The program jurisdiction includes the unincorporated area and cities of Coronado, Del Mar, Imperial Beach, Lemon Grove, Poway, and Solana Beach. This aligns with the Urban County jurisdiction used for the Community Development Block Grant (CDBG) program. On July 7, 2020 (6), the Board authorized application to and acceptance of the Permanent Local Housing Allocation program grant. The first award of PLHA funding for affordable housing production was issued February 25, 2022, to Wakeland Housing and Development Corporation for a development in the unincorporated area of Vista. This 85-unit development will provide housing for homeless and at-risk of homeless seniors with a serious mental illness and low-income seniors. The development also received additional state and federal resources from the County to support the construction and long-term operation of the development. Construction is estimated to start in 2024.
Local Funding Resources
Innovative Housing Trust Fund
With affordable housing options in the region becoming increasingly scarce, the Board responded on June 20, 2017 (21), by creating the Innovative Housing Initiative (Initiative) to increase the regional supply of affordable housing. The Initiative launched with an initial investment of $25 million of local funding sources into the Innovative Housing Trust Fund (Trust Fund) and on April 30, 2019 (7) and August 31, 2021 (6), an additional $25 million and $20 million respectively increased the total Trust Fund to $70 million. The Trust Fund is structured to address housing needs by facilitating the construction, acquisition, and/or rehabilitation of housing for low-income households and vulnerable populations.
The impact of the initial $50 million investment in the Trust Fund is significant and will lead to the creation or preservation of 1,397 affordable units for low-income families, seniors, veterans, and persons with disabilities in 20 developments throughout the region leveraging a combined $567 million dollars. At this time, 421 units have completed construction, 830 units are under construction, and 146 units will be constructed and/or rehabilitated within the next one to four years.
The Board’s allocation of $20 million was made available in a Notice of Funding Availability that closed on November 19, 2021. These funds will assist four additional developments with 391 affordable housing units leveraging $185 million dollars. It is anticipated that developments awarded under the NOFA will begin construction within the next two years making units available to low-income individuals and households within three to five years.
Today’s action meets the five-year reporting requirement under San Diego County Administrative Code Section 232.5 related to the Trust Fund.
Additionally, the County has been steadfast in its commitment to free up unused County land for the purpose of creating affordable housing developments throughout the entire region. To date, the Board has authorized 8 excess County sites for this purpose. Five of these sites have been awarded to affordable housing developers via development agreements and ground leases, with 3 more on the way.
Authorization to Allocate Affordable Housing Funding for Permanent Supportive Housing for Extremely Low-Income Households
On March 11, 2021, the American Rescue Plan Act of 2021 (ARPA) was signed into law. Subsequently, on June 8, 2021 (3) the Board adopted the ARPA Framework as part of the COVID-19 pandemic response. As part of the County’s ARPA Framework, the Board allocated $85 million to Homeless Services. Today’s action requests the Board to authorize $12 million in ARPA dollars allocated for Homeless Services for the funding and creation of permanent supportive housing for extremely low-income households defined as households earning 30% or below the Area Median Income. This focus is important because this is the population at greatest risk of experiencing homelessness.
Summary of Affordable Housing Funding Efforts
Other affordable housing resources include federal CDBG, Home Investment Partnership (HOME) program, and Project Based Housing Vouchers (PBV’s). Through recent NOFA’s one development completed an acquisition to extend the affordability term with CDBG funding, one development with HOME funds is under construction and two developments are in upcoming. The Housing Authority of the County of San Diego (HACSD) also made two new awards of PBV’s for a total of 102 affordable housing units.
|
Funding Source |
IHTF |
SNHP |
NPLH |
PLHA |
CDBG |
HOME / HOME ARP |
PBV’s |
|
Amount Awarded |
$69,725,812 |
$1,100,000 |
$79,506,758 |
$1,504,774 |
$2,300,000 |
$21,613,433 |
264 |
|
TOTAL Funding Awarded |
$175,750,777 |
Total Affordable Housing Units |
3,390 |
The combination of local (IHTF & excess land), state (SNHP, NPLH & PLHA), and federal (CDBG, HOME, HOME-ARP, & PBV’s) funding for affordable housing production allows the San Diego County region to make strides in providing housing for all residents. For additional information regarding the developments completed, under construction, and upcoming, see Attachment B, Development Details.
Today’s action requests the Board to determine the proposed action is not subject to the California Environmental Quality Act; to receive an update on affordable housing accomplishments; to adopt a resolution authorizing participation in the fourth round of Notice of Funding Availability for the No Place Like Home Program Competitive Alternative Process Allocation funds; to approve the use of $12 million of American Rescue Plan Act (ARPA) funding allocated for Homeless Services under the County of San Diego’s ARPA Framework for the creation of permanent supportive housing for extremely low-income households; authorize the Agency Director, HHSA, or designee, in consultation with the Department of Purchasing and Contracting, to issue Notices of Funding Availability and take any other actions necessary to allocate No Place Like Home funding; and authorize the Director, Department of Purchasing and Contracting, to issue competitive solicitations for the No Place Like Home program funds and American Rescue Plan Act funding.
These items support the County’s Framework for Ending Homelessness, specifically Permanent Housing and Support strategic domain. Permanent affordable housing coupled with supportive services is a crucial component of the Framework and the allocation of $12 million of American Rescue Plan Act (ARPA) funding for the creation of permanent supportive housing for extremely low-income households aligns with serving residents at greatest risk of experiencing homelessness.
ENVIRONMENTAL STATEMENT
Section 15061(b)(3) of the California Environmental Quality Act (CEQA) Guidelines provides that activities identified in Section 15378 of the CEQA Guidelines are not subject to CEQA review. Section 15378 provides that administrative activities of governments that will not result in a direct or indirect physical change in the environment are exempt from CEQA review. The proposed action is administrative in nature as it involves the receipt of the report on the status of the Innovative Housing Trust Fund. Therefore, the proposed action is not subject to CEQA review pursuant to Section 15061(b)(3) of the CEQA Guidelines.
LINKAGE TO THE COUNTY OF SAN DIEGO STRATEGIC PLAN
Today’s actions support the County of San Diego’s 2022-2027 Strategic Plan Initiatives of Sustainability, Equity, Empower, Community, and Justice by providing funding for the development of safe, decent, and affordable housing for families in the region. Specifically, today’s actions reaffirm the County’s commit towards equity and community by investing housing resources in historically disadvantaged populations. The No Place Like Home program will further the County’s efforts to provide affordable and supportive housing to individuals with a serious mental illness who are experiencing homelessness.
Respectfully submitted,
HELEN N. ROBBINS-MEYER
Chief Administrative Officer
ATTACHMENT(S)
Attachment A - A RESOLUTION OF THE SAN DIEGO COUNTY BOARD OF SUPERVISORS PROVIDING AUTHORIZATION TO PARTICIPATE IN THE THIRD ROUND NOTICE OF FUNDING AVAILABILITY FOR THE NO PLACE LIKE HOME PROGRAM COMPETITIVE ALTERNATIVE PROCESS ALLOCATION FUNDS
Attachment B - Development Details