To: Sonoma County Board of Supervisors and Board of Commissioners of the Sonoma County Community Development Commission
Department or Agency Name(s): Sonoma County Community Development Commission
Staff Name and Phone Number: Rhonda Coffman, (707) 565-7542
Vote Requirement: 4/5th
Supervisorial District(s): Countywide
Title:
Title
Substantial Amendments to the Fiscal Year (FY) 2021-2022 Annual Action Plan; County Fund for Housing (CFH) and Permanent Local Housing Allocation (PLHA) allocations; by Resolution, authorize the Sonoma Community Development Commission (CDC) to apply for California Department of Housing and Community Development (HCD) Prohousing Incentive Program, Round 3 (PIP-R3); authorization to execute documents related to Tierra de Rosas development; and adopt a Resolution declaring CDC owned land to be transferred for the development of Casa Roseland affordable housing to be exempt surplus land.
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Recommended Action:
Recommended action
A) Approve the fifth Substantial Amendment to the Sonoma County FY 2021-22 Annual Action Plan for the proposed use of $784,482 of HOME American Rescue Plan Act (HOME-ARP) funds.
B) Adopt the required certifications and authorize the Executive Director of the CDC, or designee, to execute the required forms and certifications to submit the Substantial Amendment of the FY 2021-22 Annual Action Plan to the U.S. Department of Housing and Urban Development (HUD).
C) Approve CFH awards to three affordable housing projects in the aggregate amount of $1,000,000.
D) Approve PLHA awards to two affordable housing projects in the aggregate amount of $1,042,001.
E) Authorize the Executive Director of the CDC, or designee, to execute loan agreements and grant documents with housing developers on behalf of the County in accordance with the funding programs and to execute amendments, subordinations, and modifications to said agreements consistent with the terms set forth in CDC Federal Funding Policies, County Fund for Housing Policies, Loan Policies, and/or other Board-adopted policies.
F) Adopt the Resolution directing staff to apply for the PIP-R3 offered by HCD.
G) Authorize the Executive Director of CDC to execute documents related to the Tierra de Rosas development including easement modification agreements, permits, licenses, easements, and leases as necessary affecting the property identified by parcel number 125-111-037 and 125-101-031.
H) Adopt the Resolution determining and declaring CDC owned land that will be transferred for the development of affordable housing to be exempt surplus land pursuant to the California Surplus Land Act.
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Executive Summary:
This agenda item seeks Board approval of various funding recommendations made by the Community Development Committee (CD Committee) and Cities and Towns Advisory Committee (CTAC) on September 18, 2024 and subsequent recommendation to approve the fifth Substantial Amendment to the FY 2021-2020 Annual Action Plan on October 23, 2024 for affordable housing projects located in Sonoma County. The funding recommendations are comprised of federal, state, and local fund sources.
The HOME-ARP is a federal program administered by HUD requiring approval of a Substantial Amendment to the FY 2021-22 Action Plan for allocation of these funds. An award of $784,482 will be made to Redwood Glen Apartments, an affordable multifamily project (42 units) proposed in the Town of Windsor.
The CFH program was established in 2003 by your Board and focuses on the development and preservation of affordable housing countywide. A combined total of $1,000,000 in CFH funds will be awarded to three affordable housing projects: Cooper Road ADU Project (3 units) proposed in the unincorporated area, Saggio Hills Phase 1 (47 units) in the City of Healdsburg, and Caritas Homes Phase II (63 units) in the City of Santa Rosa.
PLHA is a state funding program with the goal to make funding available to local governments in California to create affordable rental and ownership housing. A combined total of $1,042,001 of PLHA funds will be made to two affordable housing projects: The Laurels at Perrenial Park Phase III (30 units) and Caritas Homes Phase II (63 units) both located in the City of Santa Rosa.
The PIP Program awards funds based on jurisdiction size and Prohousing Designation Program score. The County was accepted into the Prohousing Designation Program in July 2023, and proposes to submit the PIP-R3 application, for an amount not to exceed $1,070,000, to further supplement and support the implementation of Housing Element programs.
The CDC is requesting authority to execute documents related to the development of Tierra De Rosas, including but not limited to easement modification agreements, permits, licenses, easements, and leases. The CDC as property owner, by executing the easement modification agreement will allow for a portion of the utility easement to be abandoned and allowing a future utility easement to be in place.
The CDC is required to submit an adopted resolution determining and declaring CDC owned land that will be transferred for the development of the Casa Roseland affordable housing project to be exempt surplus land pursuant to the California Surplus Land Act (SLA). The SLA requires the adopted resolution be submitted to the California Department of Housing and Community Development at least thirty days prior to the disposition of the land.
Discussion:
HUD, the Consolidated Plan, and Urban County Entitlement Background
The Board of Supervisors approved the Sonoma County 2020 Consolidated Plan on June 2, 2020, which is a strategic policy document that spans a five-year period. The Consolidated Plan is required by HUD for jurisdictions that receive annual allocations of federal grants, including one-time grants such as HOME-ARP.
The Consolidated Plan identifies local rationales and priorities for the use of federal grant funds that benefit lower-income residents. For Sonoma County, the entitlement jurisdiction eligible to receive both the annual and supplemental grant allocations is the “Urban County”, which was established through a Joint Powers Agreement (JPA) between the County of Sonoma and the cities/town of Cloverdale, Cotati, Healdsburg, Rohnert Park, Sebastopol, Sonoma, and Windsor. The CDC is the designated fiscal agent under the JPA and administers all aspects of the Urban County program using these funds from HUD.
FY 2021-22 Annual Action Plan Substantial Amendment - HOME-ARP Allocation
In FY 2021-2022, the Urban County received HOME-ARP funding of $2,991,512. HUD released this one-time funding during the pandemic to address the impact of coronavirus on the most vulnerable populations. The HOME -ARP Allocation Plan (Plan) was approved by the Board on March 14, 2023 and identified the following priority needs of the qualifying populations: supportive services; development and preservation of non-congregate housing, and development and preservation of affordable housing. On June 4, 2024 your Board approved funding for two projects which consisted of supportive services in the City of Rohnert Park in the amount of $160,000 and an affordable housing project in the Town of Windsor in the amount of $598,302. A separate contingency affordable housing project in the Town of Windsor was identified for a tentative allocation of $1,000,000. Contingency projects are identified as eligible for a funding award in case a project awarded funds cannot proceed and or additional funds become available.
The HOME-ARP Plan was subsequently amended on July 9, 2024 to identity development and preservation of affordable housing projects as the sole eligible use of these remaining funds. This amendment allowed funds to be available for shovel ready housing projects. Once the amendment to the Plan was approved, the contingency project was awarded their allocation of $1,000,000. HUD requires that a substantial amendment to the FY 2021-22 Action Plan be completed for the use of the remaining funds consisting of $784,482. These funds will be awarded to Spectrum Affordable Housing Corporation, Redwood Glen Apartments in the Town of Windsor.
CFH Program
The County of Sonoma established the CFH program in 2003 to provide financial assistance for the development and preservation of affordable housing countywide. The purpose of the CFH program is to develop, preserve, and accelerate the pace of development for low-, very low-, and extremely low-income households. The program is funded from local sources including, but not limited to county general fund, county reinvestment and revitalization funds, developer-in-lieu fees, countywide transient occupancy tax, CFH loan processing fees, loan interest, and loan repayments. Eligible activities include development and preservation of affordable rental housing, below market rate homeownership projects, emergency shelters, group homes, and other types of congregate facilities servings households with special needs.
PLHA Program
PLHA is a state housing fund source that was created through California Health and Safety Code Section 50470. The program’s goal is to make funding available for affordable housing projects to local jurisdictions. These funds can be used for the development and preservation of affordable rental and development of affordable homeownership projects. The state required Sonoma County to prepare a five-year PLHA Plan specifying how funds will be used. The Board of Commissioners approved the PLHA Plan on August 14, 2020 and it was subsequently approved by the HCD. The CDC was allocated up to $5,396,358 for use from FY 2019-20 through FY 2023-24. PLHA funds are awarded by HCD each year drawing from the remaining allocated amount. To date a total of $4,384,050 has been awarded to housing projects by Sonoma County.
Notice of Funding Availability (NOFA)
CDC published a NOFA on July 10, 2024, requesting eligible affordable housing proposals located in the County. The NOFA consisted of the three funding sources described above. Staff conducted two technical assistance sessions with prospective applicants and proposals were due on August 15, 2024. The following amounts are available for each funding source:
|
Funding Source |
Amount Available |
|
HOME-ARP |
$784,482 |
|
CFH |
$1,000,000 |
|
PLHA |
$1,042,001 |
Proposals were reviewed by CDC for eligibility and consistency with applicable program requirements, including funding and loan policies. CDC prepared a staff report for each funding recommendation and all recommendations were presented to the CD Committee and CTAC on September 18, 2024 in a concurrent public meeting. A copy of the agenda for that meeting can be found on CDC’s website here:
<https://sonomacounty.ca.gov/community-development-committee-meeting-2024-09-18>
A detailed summary of the funding recommendations by fund source can be found in Attachment 1. The recommendations to the committees were as follows:
• $784,482 loan of HOME-ARP to Spectrum Affordable Housing for Redwood Glen;
• $350,000 loan of CFH to Burbank Housing Corporation for Caritas HOME Phase II;
• $600,000 loan of CFH to Jamboree Housing Corporation for Saggio Hills Phase I;
• $50,000 grant of CFH to CommonSpace Land Trust for Cooper Road ADU Project;
• $422,010 loan of PLHA to The Laurels at Perrenial Park Phase III; and
• $619,991 loan of PLHA to Caritas Homes Phase II.
The committees voted to recommend funding to the Board in accordance with CDC’s recommendations as shown above. Following the public meeting, the FY 2021-22 Action Plan Substantial Amendment was published for a 30-day comment period and a public hearing was held on October 23, 2024. At the hearing the committees finalized their funding recommendation of the HOME-ARP allocation to your Board. A copy of the Substantial Amendment is included in Attachment 2. No public comments were received by CDC during the comment period nor at the public hearing.
For the HOME-ARP allocation, HUD requires the Annual Action Plan submission to include SF424 application forms and signed certifications that the Urban County entitlement will comply with all applicable federal regulations pertaining to HOME-ARP funds. Approval of this agenda item will authorize the CDC Executive Director or designee to sign and submit the forms on behalf of the County.
PIP - Round 3 (PIP-R3)
The Prohousing Designation Program was enacted by legislation in 2019, allowing local Prohousing Designated government organizations to apply for and benefit from enhanced grant opportunities. The PIP-R3 is the most recent funding opportunity for local governments that have received the Prohousing Designation. The County received its Prohousing Designation in July 2023. With approval of the Resolution, staff will prepare the application for PIP-R3, not to exceed $1,070,000, to support Housing Element implementation.
Tierra de Rosas
The Board of Supervisors established the Roseland Redevelopment Project Area in 1984. In 2005, the CDC and the City of Santa Rosa (City) joined together to sponsor a community visioning process to create a consensus among the local community about what future development of the Sebastopol Road corridor should look like, and what types of uses should be located there. This process resulted in County of Sonoma and the City adopting the Sebastopol Road Urban Vision Plan (UVP).
The UVP envisioned a mixed-use project on what was formerly known as the Roseland Village property, including several elements the community identified as priorities: affordable housing, one-acre public plaza, commercial spaces, and an indoor community activity space that could accommodate public uses. The intent of UVP has and will continue to inform planning processes and Project design.
On July 19, 2016, the Board authorized the CDC’s Executive Director to execute a Professional Services Agreement with MidPen Housing (MidPen) for third-party predevelopment services associated with obtaining required approvals for the Project. In 2017 Roseland was annexed into the City. In February 2018, the CDC and MidPen applied for a tentative map, subdivision map, and density bonus concessions to the City. On July 25, 2019, the Santa Rosa City Council affirmed the Planning Commission’s approval of the Project and environmental analysis, including the following components:
• “Casa Roseland” Affordable Housing Development with:
• 75 multi-family rental units for households at 30 - 60% of the Area Median Income (AMI).
• “Tierra de Rosas” Mixed-Use Development with:
• 1-acre Public Plaza
• Market Rate Housing: 100 multi-family rental units
• Mercado Food Hall
• Space for 24,000 square foot civic building
The Final Map was approved on November 12, 2024, by City Council. The Final Map subdivided the parcels for all the components for the Tierra de Rosas mixed-use development project. Tierra de Rosas will have new relocated utility lines and easements to serve the property. The previous utility lines and easements will not be active and will need to be vacated under an easement modification agreement.
Authorization of this request will provide authority to the Executive Director of the CDC, in consultation with County Counsel, to execute documents related to the approved Tierra de Rosas development, including but not limited to utility documents, easement modification agreements, City of Santa Rosa agreements, permits, licenses, easements, and leases agreements related to the Plaza, Mercado, and Civic building. The intent of this request is to make the project progress as efficiently as possible for the CDC.
Surplus Land Act Resolution
The California Surplus Land Act (SLA) guidelines require local agencies such as the CDC to implement specific steps for the disposition of agency owned land. The CDC owned land (a portion of Assessor Parcel Number 125-111-037/125-101-031) that will be transferred to MP Roseland Village Associates L.P., a California Limited Partnership (“MidPen”) for the development of Casa Roseland affordable housing meets the requirements and definitions under the SLA to be declared exempt surplus land. The SLA requires the CDC to submit a resolution adopted by the Board of Commissioners to the California Department of Housing and Community Development at least thirty days prior to the disposition of the land. The CDC intends to transfer the land to MidPen in January 2025 for the development of the affordable housing project. Approval and adoption of the attached resolution is needed to meet the SLR notice requirements to proceed with the transfer.
Strategic Plan:
This item directly supports the County’s Five-year Strategic Plan and is aligned with the following pillar, goal, and objective.
Pillar: Healthy and Safe Communities
Goal: Goal 3: In collaboration with cities, increase affordable housing development near public transportation and easy access to services.
Objective: Objective 2: Identify and leverage grant funding sources for permanent supportive and affordable housing development.
Racial Equity:
Was this item identified as an opportunity to apply the Racial Equity Toolkit?
No
Prior Board Actions:
10/08/2024: Approved Update to CDC’s Loan Policies
07/09/2024: Approved the fourth FY 2021-22 Action Plan Substantial Amendment to Amend the HOME-ARP Allocation Plan.
06/04/2024: Approved the third FY 2021-22 Action Plan Substantial Amendment to allocate funding to two affordable housing projects.
05/14/2024: Tierra de Rosas and Recognition of Affordable Housing Month
03/14/2024: HCD Prohousing Incentive Program Grant application
11/07/2023: Approved CFH Funding Policies; Roseland Village Demolition & Remediation Contract Award
09/12/2023: Received Update, Casa Roseland, and Tierra de Rosas.
06/15/2023: Authorized $7,678,011 from one-time General Fund monies, and $2,000,000 from Third District infrastructure funds.
05/16/2023: Authorized Executive Director Michelle Whitman to execute IIG Grant documents.
02/07/2023: Authorized $1,374,000 in Strategic Plan Funds.
01/31/2023: Authorized the switch of up to $2,079,477 CFH funds from the construction of the Casa Roseland project to pay for a portion of the construction costs of Tierra de Rosas infrastructure. Approved $3,750,000 LMIHAF loan for the construction of the Casa Roseland and $960,000 seller-carry back financing for the acquisition of the Affordable Housing Parcel.
Authorized amendment to PSA with MidPen increasing the budget to $5.42 million.
Authorized waiving the annual monitoring fees for the affordable units. Made findings that the use of LMIHAF fuds will be a benefit to the Project Areas.
Authorized Interim Executive Director Rhonda Coffman to execute IIG grant documents.
Authorized Interim Executive Director Rhonda Coffman to apply for Ag + Open Space District Matching Grant funding.
10/25/2022: Provided an update to Board on the status and financing gap for the Tierra de Rosas and Casa Roseland mixed-use project. 03/14/2023: Approved the second FY 2021-22 Action Plan Substantial Amendment to incorporate HOME-ARP - Allocation Plan
03/15/2022: Approved the first FY 2021-22 Action Plan Substantial Amendment
08/31/2021: Authorized CDC Interim Executive Director Dave Kiff to execute IIG grant documents. 07/27/2021: Approved FY 2021-22 Action Plan
03/16/2021: Authorized amendment to PSA with MidPen increasing the budget to $3,303,667.
06/02/2020: Approved Sonoma County 2020-2025 Consolidated Plan
02/04/2020: Authorized CDC Interim Executive Director Barbie Robinson to execute IIG grant documents.
08/20/2019: Authorized amendment to PSA with MidPen increasing the budget to $2.4 million.
03/12/2019: Authorized CDC to execute the DDFA with MidPen and Urban Mix Development. 12/11/2018: Approved $2,000,000 CFH loan for Casa Roseland.
11/15/2016: Approved $537,500 CFH loan for Casa Roseland.
07/19/2016: Approved PSA between CDC and MidPen for an amount up to $1.55 million. 01/26/2016: Authorized the CDC to negotiate a DDFA with MidPen.
04/08/2014: Authorized CDC to apply for Open Space District Matching Grant Program funds
Fiscal Summary
Narrative Explanation of Fiscal Impacts:
Expenditure and Revenue appropriations were included in the FY2024/25 Budget Development process. No impacts to the approved budget are anticipated.
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Staffing Impacts: None |
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Narrative Explanation of Staffing Impacts (If Required):
N/A
Attachments:
1. Funding Recommendations by Funding Source and Project
2. FY 2021-22 Annual Action Plan Substantial Amendment
3. PIP, Round 3 Authorizing Resolution
4. Tierra de Rosas Resolution Easement Modification
5. PG&E Easement
6. Exempt Surplus Land Resolution - Casa Roseland
Related Items “On File” with the Clerk of the Board:
1. The fourth FY 2021-22 Substantial Amendment - Amended HOME-ARP Allocation Plan
2. CDC FY 2021-22 Federal Funding Policies
3. County Fund for Housing Funding Policies
4. CDC Loan Policies
5. Sonoma County Permanent Local Housing Allocation Plan