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: Dave Kiff, (707) 565-7504
Vote Requirement: Majority
Supervisorial District(s): Second
Title:
Title
California Housing Accelerator Project: Petaluma River Place Apartments
End
Recommended Action:
Recommended action
Adopt a Resolution approving the California Accelerator Project (Accelerator) Tier 2 application with the County and Burbank Housing Development Corporation (Burbank) as co-applicants for the Accelerator award funds in an amount up to $21,795,295 and authorizing the Interim Executive Director of the Community Development Commission, or designee, to enter into, execute, and deliver any and all documents required or deemed necessary to represent the County as co-applicant with Burbank Housing Development Corporation in the California Accelerator Project Tier 2 application.
end
Executive Summary:
The 2021-22 state budget appropriated $1.75 billion to fund a new California Department of Housing and Community Development (HCD) program, California Housing Accelerator. The California Housing Accelerator Program is funded with monies received from the Coronavirus State Fiscal Recovery Fund established by the federal American Rescue Plan Act of 2021 (ARPA).
The intent of this program is to reduce the backlog of projects “stuck” in the funding pipeline to accelerate the development of housing for those most in need. These funds will be used to fill funding gaps in shovel-ready projects that have received funding under other HCD programs and have been unable to access low-income housing tax credits.
On February 28, 2022, HCD announced the availability of approximately $1.05 billion for shovel-ready projects that, despite having received one or more program direct loan awards from HCD multi-family loan programs, are unable to move forward due to funding gaps resulting from the current shortage of tax-exempt bond allocations and low-income housing tax credits.
Funding available is derived from the Coronavirus State Fiscal Recovery Fund (CSFRF), established by the federal American Rescue Plan Act of 2021 (ARPA) (Public Law 117-2), as well as the State’s General Fund. Through the 2021-22 and 2022-23 California state budgets, funds have been allocated to this program.
Discussion:
On April 4, 2022, Burbank applied for the Accelerator funding to support the affordable housing project known as Petaluma River Place located at 1601 Petaluma Boulevard South in Petaluma
On September 6, 2022, Burbank received a conditional award letter from the Department of Housing and Community Development’s (HCD’s) Division of Financial Assistance awarding them up to $21,795,295.00 in Accelerator funds.
The award letter is conditioned upon Burbank submitting a revised application adding the County (the public entity from the original HCD NPLH loan commitment) as co-applicant, as well as the inclusion of a resolution from the County approving the application and the loan amount.
Petaluma River Place Apartments is a proposed new construction project of 50 units of garden-style affordable housing that will be available to families and individuals in a predominantly three-story building with elevator access. The building will be entirely residential with 49 low-income rental units plus one resident manager unit.
The project will provide urgently needed affordable housing for Sonoma County residents. Specific populations served shall include farmworkers and families earning up to 60% area median income (AMI) under the Joe Serna Farmworker Housing Program. The project will also serve people experiencing or at risk of experiencing homelessness earning up to 20% AMI under the No Place Like Home (NPLH) Program in concert with Sonoma County Department of Health Services (DHS).
The unit mix includes 15 1-bedroom NPLH units with 19 2-bedroom and 15 3-bedroom affordable units supported in part by the Joe Serna Farmworker Housing Program. Each of these units will be available to farmworkers and families with at least one farmworker family member, with a 2-bedroom unit reserved for the property manager.
The County has provided support for this project through a variety of funding sources including:
• An award of $492,175.00 in Community Development Block Grant Disaster Recovery Multifamily Housing Program loan (CDBG DR MHP); and
• A partnership with Burbank on the NPLH Round 3 loan in the amount of $4,373,874.00.
Adoption of the attached Resolution will constitute another commitment by the County in support of the project and to share the responsibility of all State and Federal requirements of the Accelerator Project and to ensure the project meets all requirements as set forth in the California Housing Accelerator Tier 2 Project Solicitation and Guidelines.
The Accelerator assistance is in the form of a forgivable loan with zero percent interest for 20 years with no residual receipts or periodic payment requirements during the life of the California Housing Accelerator loan. The loan will be forgiven by HCD at the end of the 20-year loan term as long as all of the following are true, as determined by HCD in its sole and absolute discretion:
• The Sponsor remains in good standing with the California Secretary of State;
• The project is not in default under the terms of any of the Department’s loan documents for that project; and
• Negative points have not been assessed against the Sponsor during the previous five (5) ears in connection with any Department-assisted project.
The California Housing Accelerator loan shall be subject to repayment if, during the 20-year term, the Project is (1) converted to market-rate housing; or (2) sold or refinanced with a distribution of net equity. The County will have joint and severable liability to repay the loan in the event that all or portions of the loan require repayment.
In addition, the County (including the CDC and DHS) will be responsible for:
• Compliance monitoring of the project (CDC);
• Annual reporting for the term of the loan (CDC and Burbank); and
• Coordinating and ensuring that the supportive services (especially mental health services) are provided to the NPLH clients (via DHS or its contractors).
Strategic Plan:
This project commits 30% of units built to housing individuals with severe and persistent mental illness who are homeless, chronically homeless, or at risk of being homeless. Providing those individuals with safe, decent, and affordable housing coupled with mental health services to give them the support necessary to keep them mentally stable and dramatically reduce the likelihood of these individuals returning to streets and homelessness.
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: Increase investment in programs that treat underlying causes of homelessness, including substance abuse, mental illness, poverty, and lack of affordable housing.
Prior Board Actions:
January 5, 2021, Item #6: No Place Like Home Round 3 Competitive Program Resolution 21-0006 - Adopt a Resolution Authorizing participation in the No Place Like Home Round 3 Competitive Program
Fiscal Summary
|
Expenditures |
FY 22-23 Adopted |
FY23-24 Projected |
FY 24-25 Projected |
|
Budgeted Expenses |
|
|
|
|
Additional Appropriation Requested |
|
|
|
|
Total Expenditures |
|
|
|
|
Funding Sources |
|
|
|
|
General Fund/WA GF |
|
|
|
|
State/Federal |
|
|
|
|
Fees/Other |
|
|
|
|
Use of Fund Balance |
|
|
|
|
Contingencies |
|
|
|
|
Total Sources |
|
|
|
Narrative Explanation of Fiscal Impacts:
None at this time.
|
Staffing Impacts: |
|
|
|
|
Position Title (Payroll Classification) |
Monthly Salary Range (A-I Step) |
Additions (Number) |
Deletions (Number) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Narrative Explanation of Staffing Impacts (If Required):
N/A
Attachments:
Attachment 1 - Resolution
Attachment 2 - Conditional Award Letter 22-ACC-17493 Accelerator Program Tier 2
Related Items “On File” with the Clerk of the Board:
N/A