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: Martha Cheever, (707) 565-7521
Vote Requirement: Majority
Supervisorial District(s): Countywide
Title:
Title
Award of Project-Based Vouchers and Approval of Amended FY 2021-22 Action Plan
End
Recommended Action:
Recommended action
A) Approve Sonoma County Housing Authority (SCHA) recommendations to award Project-Based Vouchers and authorize the Community Development Commission Executive Director, or designee, to enter into all necessary agreements required to implement the awards.
B) Authorize the Community Development Commission Executive Director, or designee, to amend the resulting Project-Based Voucher Housing Assistance Payments contracts during the term of the agreement to add or substitute units as needed.
C) Adopt a Resolution Approving a Substantial Amendment to the FY 2020 Sonoma County Consolidated Plan FY 2021-22 One-Year Action Plan to provide $444,500 in HOME funds for the SCHA Tenant-Based Rental Assistance Program. (4/5ths vote required)
D) Authorize the Community Development Commission Executive Director, or designee, to execute all required documents for submission to the U.S. Department of Housing and Urban Development, and to execute the HOME Tenant-Based Rental Assistance (TBRA) Funding Agreement with the SCHA.
end
Executive Summary:
The Board of Supervisors has prioritized the need to expand opportunities for affordable housing in Sonoma County and to reduce the County’s overall homeless population by 10% each year. To that end, the Housing Authority is seeking authorization to award 145 Project- Based Vouchers (PBV) to five projects. Two of the recommended projects will result in the creation of 129 units of Permanent Supportive Housing in the County, and three of the projects will ensure that all units in the project will remain affordable. Project-Based Vouchers are an important resource providing predictable operating revenue to new and existing affordable multi-family rental housing ensuring the most vulnerable members of our community have stable, affordable housing.
For Housing Authority program participants who do not occupy PBV subsidized units, the agency makes payments for a portion of the tenant’s rent directly to the property owner each month. Most of the Housing Authority’s programs, including the “Section 8” Housing Choice Voucher program and several smaller programs that assist specific special needs populations, operate in this manner. With few exceptions, funds from these programs may not be used to pay security deposits. Very low-income households can lose the opportunity to receive rental assistance when they lack the personal funds required to pay this up-front cost, which can be up to twice the monthly rent amount. The proposed Substantial Amendment to the FY 2021-22 One-Year Action Plan would make $444,500 in reprogrammed HOME funds available to the Tenant-Based Rental Assistance program to provide security deposit grants for up to 140 households who face this situation.
Discussion:
PROJECT-BASED VOUCHERS
The U.S. Department of Housing and Urban Development (HUD) allows Housing Authorities to attach up to 20% of its Section 8 Housing Choice Voucher program funding to specific housing units by project-basing vouchers, and an additional 10% of its program can be project-based for certain HUD authorized exception categories, which includes permanent supportive housing units. With this award, the Housing Authority will convert 20.39% of its Housing Choice Voucher program (16% of the standard project-based category and 45% of allowable exception units) to project-based vouchers. In contrast to the tenant-based voucher program, project-based housing subsidy remains with the unit after a tenant moves out. The owner must agree to rent the unit to eligible tenants for the duration of the Housing Assistance Payments (HAP) contract, which is often 20 to 40 years. After residing in a project-based unit for one year, a tenant may request to transfer to the Housing Choice Voucher program. If a voucher is available, the Housing Authority will allow the tenant to transfer programs and move with continued assistance.
On January 4, 2022, the Sonoma County Community Development Commission (Commission) released a Request for Proposals (RFP) for up to 200 Project-Based Vouchers available to property owners and developers. The RFP prioritized projects that would provide homeless-dedicated permanent supportive housing units and units that would be ready for occupancy within 12 months of award. In response to the Request for Proposals (RFP), 17 responsive applications were received requesting a total of 372 project-based vouchers. One additional application was deemed non-responsive and not ranked.
Applications were reviewed and ranked by a panel consisting of the Sonoma County Housing Authority Manager, the Sonoma County Community Development Commission’s Community Development Assistant Manager and the Housing Authority Manager from the City of Santa Rosa. Each application was scored and ranked in accordance to the criteria outlined in the RFP.
Following careful review of the 17 responsive applications received, 8 projects are recommended for award of Project-Based Vouchers. Two of these projects, George’s Hideaway and Redwood Inn, are owned by the Commission and require additional steps before they can be awarded Project-Based Vouchers. Therefore, they are not included for recommendation of award in this item.
Two of the projects being recommended today, The Studios at Montero and Providence Rohnert Park, will create 129 units of Permanent Supportive Housing in the County and four of the projects being recommended will ensure that existing affordable housing will remain affordable for at least the next 20 years. The two Commission owned projects, when ready for award, will create an additional 61 units of Permanent Supportive Housing in the County.
Staff recommend that the Board of Commissioners authorize the Executive Director of the Sonoma County Community Development Commission, or designee, to enter into an Agreement to enter into a Housing Authority Payment contract (AHAP), and a Project-Based Voucher Housing Authority Agreement (HAP) for the five non-Commission projects listed in Table A below. Additionally, staff request that the Executive Director of the Sonoma County Community Development Commission, or designee, be authorized to amend these Housing Assistance Payments contract during the term of the agreement to add or substitute units as needed.
The following recommendation for award of Project-Based Vouchers was reviewed and recommended for approval by the Community Development Committee on February 16, 2022. A full listing of all responsive applications received by the Commission is included as an attachment to this item.
Table A: Projects recommended for award of Project-Based Vouchers listed in alphabetical order.
|
Project |
Developer |
Project Type |
Number of PBVs |
Location |
Construction Type |
|
575 Vallejo Street |
PEP |
Senior |
2 |
Petaluma |
Preservation |
|
579 Vallejo Street |
PEP |
Senior |
3 |
Petaluma |
Preservation |
|
Fisher I |
PEP |
Senior |
5 |
Petaluma |
Preservation |
|
Fisher II |
PEP |
Senior |
6 |
Petaluma |
Preservation |
|
The Studios at Montero |
Burbank |
PSH |
60 |
Petaluma |
Rehab |
|
Providence RP House |
Providence |
PSH |
69 |
Rohnert Park |
New Construction |
FY 2021-22 ACTION PLAN SUBSTANTIAL AMENDMENT
For Housing Authority program participants who do not occupy PBV subsidized units, the agency makes payments for a portion of the tenant’s rent directly to the property owner each month. Most of the Housing Authority’s programs, including its main “Section 8” Housing Choice Vouchers and several smaller programs that assist specific special needs populations, operate in this manner. With few exceptions, funds from these programs may not be used to pay security deposits. Because rental property owners typically charge up to two month’s rent for a security deposit, this can pose a hardship on many very low-income households who do not have significant savings. If a tenant cannot pay the security deposit, they cannot lease a unit and they lose the opportunity to receive any rental assistance through the Housing Authority.
To help overcome this obstacle, the proposed Substantial Amendment to the FY 2020 Sonoma County Consolidated Plan FY 2021-22 One-Year Action Plan would make $444,500 in federal HOME funds available to the Housing Authority’s Tenant-Based Rental Assistance (TBRA) program. The HUD “Urban County” entitlement jurisdiction received these HOME funds in FY 2017-18 ($102,346) and FY 2018-19 ($342,154). Your Board initially approved commitment of the funds to Habitat for Humanity of Sonoma County to assist in financing their planned Duncan Village homeownership project in Windsor. That project has encountered significant delays and Habitat is not able to use the HOME funds before the expenditure deadlines required by the Urban County Funding Policies and HUD. The prior year commitment was therefore rescinded and the funds are now available for use on another project.
The Urban County Funding Policies, Section 3.4, states the following about HOME reprogrammed funds: “At the (Commission) Executive Director’s discretion, funds will be reallocated to the Sonoma County Housing Authority’s Tenant-Based Rental Assistance Program, reallocated through an Action Plan Amendment, or rolled forward to the next fiscal year allocation. If the amendment to the Action Plan is substantial, as defined in the Commission’s Citizen Participation Plan, it is subject to Board of Supervisors approval following a recommendation from the Cities and Towns Advisory Committee (CTAC) and the Community Development (CD) Committee.”
The regulatory deadline to expend the FY 2017-18 funds is July 2022, and the FY 2018-19 funds must be fully expended by July 2023 or they will be recaptured by HUD. Given these tight timeframes, the funds need to be committed to a new project as soon as possible. Therefore, rather than rolling them forward for inclusion in the competitive funding cycle for next fiscal year, staff recommend committing them to the Housing Authority’s TBRA program to help up to 140 very low-income households pay security deposits.
This change would represent a substantial amendment to the FY 2021-22 Action Plan; therefore, a 30-day comment period and hearings by the CTAC and the CD Committee are required. The comment period began with a public notice on February 2, 2022 and concluded on March 3, 2022. The Commission did not receive any comments during this time. The two advisory committees held concurrent public hearings on February 16, 2022. No members of the public made comments during the hearings. Staff responded to committee member questions regarding the way in which the assistance would be distributed, and each committee then voted to recommend your Board’s approval of the Substantial Amendment. The Amendment will be submitted to HUD immediately upon final approval. The Housing Authority will be able to begin using the funds to pay security deposits after HUD’s final approval of the Substantial Amendment, which will be no later than 45 days after submission (April 28, 2022).
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 4: Reduce the County’s overall homeless population by 10% each year by enhancing services through improved coordination and collaboration.
Objective: Objective 3: Create incentives for developers to promote affordable housing development in the County.
Prior Board Actions:
June 8, 2021: The Board A) Approved Sonoma County Housing Authority recommendations to award Project-Based Vouchers and authorize the Executive Director, or designee, to enter into all necessary agreements required to implement the awards, and B) Adopted a resolution authorizing budgetary adjustments to the fiscal year 2020-2021 adopted budget, reflecting additional revenues and expenditures of $1,474,504, to allow the Housing Authority to expend CARES Act Housing Assistance Payment funds.
October 9, 2018: The Board adopted a resolution that would approve the issuance of multi-family housing revenue bonds by the Golden State Finance Authority for the purpose of financing the construction and equipping of Windsor Veterans Village.
July 10, 2018: The Board approved the FY 2018-19 Action Plan One-Year Use of Funds, including a commitment of $102,346 in FY 2017-18 and $342,154 FY 2018-19 HOME funds for the Habitat for Humanity Duncan Village project.
February 6, 2018: The Board approved County Fund for Housing award to Windsor Veterans Village.
Fiscal Summary
|
Expenditures |
FY 21-22 Adopted |
FY 22-23 Projected |
FY 23-24 Projected |
|
Budgeted Expenses |
|
|
|
|
Additional Appropriation Requested |
444,500 |
|
|
|
Total Expenditures |
444,500 |
0 |
0 |
|
Funding Sources |
|
|
|
|
General Fund/WA GF |
|
|
|
|
State/Federal |
444,500 |
|
|
|
Fees/Other |
|
|
|
|
Use of Fund Balance |
|
|
|
|
Contingencies |
|
|
|
|
Total Sources |
444,500 |
0 |
0 |
Narrative Explanation of Fiscal Impacts:
Additional funding of $444,500, which consists of entitlement funding awarded in Fiscal Year 2017/2018 ($102,346) and Fiscal Year 2018/2019 ($342,154), are available for budgeting. The additional appropriations will be used to provide security deposits for up to 140 households. Appropriations for the Fiscal Year 2021/2022 Adopted Budget will be added through the attached Budget Resolution.
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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 - Resolution
Attachment 2 - Redlined 2021-2022 Annual Action Plan
Attachment 3 - Listing of All Responsive Applications for Project-Based Vouchers Received
Related Items “On File” with the Clerk of the Board:
N/A