To: Board of Supervisors of Sonoma County and Board of Commissioners of the Community Development Commission
Department or Agency Name(s): Community Development Commission
Staff Name and Phone Number: Dave Kiff, (707) 565-7504
Vote Requirement: Majority
Supervisorial District(s): Countywide
Title:
Title
County Fund for Housing and Permanent Local Housing Allocation Loan Awards
End
Recommended Action:
Recommended action
A) Approve County Fund for Housing (CFH) and Permanent Local Housing Allocation (PLHA) awards in the aggregate amount of $2,050,000.
B) Authorize the Executive Director of the Sonoma County Community Development Commission, or designee, to execute funding agreements and related documents including promissory notes, deeds of trust, and other related loan documents, and subsequent amendments, subordinations, and other modifications to said agreements and loan documents in connection to the CFH and PLHA awards, consistent with Community Development Commission Loan Policies.
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Executive Summary:
This agenda item will provide $2,050,000 in loans from the County Fund for Housing (CFH) and the Permanent Local Housing Allocation (PLHA). Approval of the loans will assist the development of 23 affordable housing units in Cloverdale that will provide permanent supportive housing focusing on special needs populations, 134 affordable housing units in Windsor for low-income individuals and families, and 60 affordable housing units in Windsor for homeless veterans.
Every year, the Community Development Commission releases a Notice of Funding Availability (NOFA) to solicit housing development proposals to increase the development of affordable housing. The purpose of the CFH is to develop, preserve, and accelerate the pace of development of below market-rate housing for low-, very low-, and extremely-low-income households. CFH resources provide loans and grants to qualified developers, public entities, groups, and individuals to undertake activities that create, maintain, or expand the County’s affordable housing stock. As was done for FY 2020-21, the FY 2021-22 NOFA also included PLHA funds from the state, 20% of which must be used for owner-occupied or workforce housing.
Discussion:
On September 20, 2021, the Community Development Commission (CDC) issued a NOFA for $2,156,568 available in FY 2021-22 from the County Fund for Housing, including $1,044,423 of PLHA funds from the State. Eight applications were received in response to the NOFA. One developer withdrew their application when the project received all required funding from other sources, and three projects were not eligible for funding as two projects lost site control and one did not meet income targeting requirements. The total funding requested in the four remaining applications exceeded $4.1 million, creating an oversubscription of funding requests.
The four projects were reviewed and evaluated by staff to determine if they met the CFH Guiding Principles and Funding Priorities. Staff’s analysis was based on a comprehensive assessment of all of the Evaluation, Funding and NOFA criteria that are part of the CFH Funding Policies that govern the review of proposals.
Funding criteria include the following:
A. Proposals must address the following CFH Policy Priorities:
• Creation or preservation of the greatest number of affordable housing units, affordable to the lowest-income populations;
• Creation of housing opportunities throughout the County;
• Utilization of Housing Opportunity Sites identified by the County and sites identified by the incorporated cities and towns in Sonoma County
• Integration with health and human services systems and programs designed to aid those people experiencing poverty to live independently or to achieve economic self-sufficiency; and
• Collaboration with local jurisdictions and other funders of affordable housing.
B. Project Sponsors must be eligible - eligible sponsors are “qualified” meaning that the sponsor has prior relevant experience and organizational capacity and is financially stable.
C. Projects must be eligible - eligible projects include the following:
• Projects that create units for households with incomes up to 50% of area median income (AMI);
• Projects that preserve existing affordable housing units through acquisition or rehabilitation;
• Rental housing projects;
• Properties providing Permanent Supportive Housing;
• Below-market-rate homeownership projects;
• Housing for special needs populations;
• Group homes; and
• Properties that will house residents receiving services from another County department - (Department of Health Services, Human Services, and/or the Probation Department).
D. Projects must meet Threshold Criteria:
• Consistency with the jurisdiction’s General Plan; and
• Applicant must possess site control.
E. Housing Element Goals and County Strategic Priorities:
• Minimum leveraging score of 7:1;
• Readiness to proceed;
• Success obtaining federal tax credits and/or state funding to develop housing in last 7 years;
• Cost effectiveness and feasibility of the project;
• Projects taking advantage of maximum density permitted; and
• Projects demonstrating existing support from other jurisdictions.
F. Extent to which CDC funds have been invested in prior years and need additional funding to move forward to completion.
A summary and staff analysis of each project is shown in the FY 2021-22 CFH Project Summary and Staff Analysis Reports (Attachment 1).
The Community Development (CD) Committee (comprised of 5 appointed representatives of the supervisorial districts, 2 tenant representatives of the Sonoma County Housing Authority, and 1 staff appointee from the Department of Human Services) review and make recommendations on matters concerning housing development and affordable housing programs, including CFH funding allocations. These recommendations then come before your Board for review and approval.
The CD Committee held a public hearing on November 17, 2021, to review the funding requests and staff’s analysis of each project’s adherence to the funding criteria listed above. At the conclusion of the hearing, the CD Committee recommended approval of the CFH and PLHA awards in the aggregate amount of $2,050,000 to fully fund 3 of the projects as follows:
|
Project Name / Developer |
Project Location |
CD Committee Funding Recommendations |
Number of Units / Targeting |
|
Cherry Creek Village Kingdom Development |
Cloverdale |
$600,000 CFH & PLHA |
• 23 units • Permanent supportive housing • Special needs households • 30 - 60% AMI |
|
Shiloh Terrace CRP Affordable |
Windsor |
$600,000 CFH |
• 134 units • Individuals and families • 30 - 70% AMI |
|
Veterans Village Windsor LP & Urban Housing Communities |
Windsor |
$850,000 CFH & PLHA |
• 60 units • Homeless veterans • Workforce housing • 30 - 50% AMI |
|
|
TOTAL |
$2,050,000 |
|
In regards to how these projects affect the County’s or the siting cities’ Regional Housing Needs Assessment (RHNA) numbers where the County Fund for Housing funds a project, CFH Policy #6.1 states:
“For projects located in an incorporated city or town, the Commission and the Sonoma County Permit and Resource Management Department shall work cooperatively with the incorporated city or town to share RHNA credit.”
CDC and PRMD staff will follow up with Windsor and Cloverdale on this matter.
The CD Committee did not recommend funding for the fourth proposal, from Danco Communities for their Meridian at Corona Station project in Petaluma, primarily because the project did not rank as high on the CFH funding criterion of readiness to proceed. Danco had requested $2,100,000 for this project.
A remaining balance of $106,568 in PLHA funds will be carried over to the FY 2022-23 CFH NOFA.
Upon your Board’s approval of the CFH and PLHA loan awards, CDC staff will work with the borrowers to comply with all applicable requirements of the CFH and CDC Loan Policies prior to executing funding agreements and related loan documents. Your Board’s approval will permit the Executive Director of the Sonoma County Community Development Commission, or designee, to execute funding agreements and related documents including promissory notes, deeds of trust, and other related loan documents, and subsequent amendments, subordinations, and other modifications to said agreements and loan documents in connection to the CFH and PLHA awards in the aggregate amount of $2,050,000.
Strategic Plan:
Within the Healthy and Safe Communities pillar, Goal 3 speaks to collaborating with cities to increase affordable housing development near public transportation and with easy access to services. An objective within that goal notes the identification and leveraging of grant funding sources for permanent supportive and affordable housing development. This item uses State and local funds to assist new affordable housing developments in Cloverdale and Windsor. Specifically, the item 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.
Prior Board Actions:
On February 2, 2021, the Board approved FY 20-21 CFH and PLHA loan awards.
Fiscal Summary
|
Expenditures |
FY 21-22 Adopted |
FY22-23 Projected |
FY 23-24 Projected |
|
Budgeted Expenses |
$2,050,000 |
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Additional Appropriation Requested |
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Total Expenditures |
$2,050,000 |
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Funding Sources |
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General Fund/WA GF |
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State/Federal: CA HCD Permanent Local Housing Allocation (PLHA) |
$937,855 |
|
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Fees/Other: County Fund for Housing (CFH) |
$1,112,145 |
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Use of Fund Balance |
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Contingencies |
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Total Sources |
$2,050,000 |
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Narrative Explanation of Fiscal Impacts:
Funding and expenditures are included in CDC’s FY 21-22 budget
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Staffing Impacts: |
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Position Title (Payroll Classification) |
Monthly Salary Range (A-I Step) |
Additions (Number) |
Deletions (Number) |
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Narrative Explanation of Staffing Impacts (If Required):
N/A
Attachments:
Attachment 1 - FY 2021-22 CFH Project Summary and Staff Analysis Reports
Related Items “On File” with the Clerk of the Board:
None