To: Board of Supervisors and Board of Commissioners
Department or Agency Name(s): Community Development Commission
Staff Name and Phone Number: Michelle Whitman, 707-565-7504
Vote Requirement: Majority
Supervisorial District(s): Countywide
Title:
Title
Updates to Federal Funding Policies and County Fund for Housing Policy and Authorization to Submit Federal Funding Requests
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Recommended Action:
Recommended action
A) Request the Board of Supervisors of Sonoma County approve the Fiscal Year 2024-2025 Community Development Block Grant, HOME Investment Partnerships Program, Emergency Solutions Grant, and Low-and Moderate-Income Housing Asset Fund-Homeless Services Funding Policies for affordable housing, non-housing capital projects, fair housing programs, homeless prevention, homeless services, emergency shelter, and rapid rehousing programs.
B) Request the Board Commissioners for the Sonoma County Community Development Commission of Sonoma County approve of the revised County Fund for Housing Policy.
C) Request the Board Commissioners for the Sonoma County Community Development Commission to authorize submittal of a $250,000 Community Development Block Grant fund request by the Community Development Commission for the Housing Rehabilitation Loan and Earthquake Resistance Bracing System programs, and a $100,000 HOME Investment Partnerships fund request by the Sonoma County Housing Authority for the Tenant-Based Rental Assistance Program, for consideration during the Fiscal Year 2024-2025 Consolidated Plan funding cycle.
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Executive Summary:
Approval of this agenda item will:
1. Update federal Funding Policies that guide the administration and allocation of Community Development Block Grant (CDBG), HOME Investment Partnerships Program (HOME), Emergency Solutions Grants (ESG), and Low-and Moderate-Income Housing Asset Fund-Homeless Services (LMIHAF-Homeless Services) to reflect new requirements imposed by the U.S. Department of Housing and Urban Development (HUD), including requiring specific building materials to be manufactured in the United States for certain projects, identification of a new funding source called HOME-American Rescue Plan (ARP) Act, as well as other revisions throughout the document to properly implement the programs.
2. Update County Fund for Housing (CFH) Policy to reinstate previously deleted provisions that allow funding for congregate housing facilities, give preference to nonprofit affordable housing developers as required in the County Housing Element, and require annual reporting to your Board. Additional changes will: facilitate use of CFH funds for projects using the community housing land trust model, a legal structure to ensure that ownership housing restricted as affordable to lower income buyers is not unintentionally sold to a non-qualified buyer; require Regional Housing Needs Allocation (RHNA) Sharing Agreements for projects located in incorporated jurisdictions; and maximize the number of restricted units in CFH-assisted developments.
3. Authorize CDC to submit a request for $250,000 in FY 2024-2025 CDBG funding for the Housing Rehabilitation Loan program (HRLP) and Earthquake Resistant Bracing System (ERBS), and the Sonoma County Housing Authority (SCHA) to submit a $100,000 request for Fiscal Year (FY) 2024-2025 HOME funding for the Tenant-Based Rental Assistance program.
Discussion:
The Sonoma County Community Development Commission (CDC) staff administers various loan and grant programs using policies and procedures that are consistent with the applicable local, state, or federal requirements of the funding sources being used, and with the policies and goals of the County and CDC. The policies are updated as needed to enable staff to properly implement the programs and ensure compliance with the most current requirements and regulations.
Federal Funding and LMIHAF-Homeless Services Policies
The Urban County, comprised of the County of Sonoma, the cities of Cloverdale, Cotati, Healdsburg, Rohnert Park, Sebastopol, Sonoma, and the Town of Windsor, is the entitlement jurisdiction of federal CDBG, HOME, ESG grant programs. These jurisdictions entered a Joint Powers Agreement (JPA) to form the Urban County. The JPA designates the County as the lead agency with final decision-making authority, and CDC as fiscal agent for the programs. CDC administers all these funding programs, including LMIHAF-Homeless Services, which is a County program derived from the former Sonoma County, City of Sonoma, and City of Sebastopol redevelopment agencies when the redevelopment agencies dissolved in 2012. In 2014, your Board approved the annual use of up to $250,000 in LMIHAF revenue for homelessness-prevention and rapid rehousing program as permitted by California Redevelopment Law.
The Federal Funding and LMIHAF-Homeless Services policies guide administration, solicitation, and selection of proposals to receive funds. Attachment 1, the proposed policies, reflect the following updates:
1. Addition of the HOME-ARP program, a new supplemental federal program targeting the homeless and other housing vulnerable populations and new text giving preference to homeless services and rapid rehousing funding applications that align with the goals of the Continuum of Care (CoC) Strategic Plan.
2. Clarification of the ESG program limiting funding to emergency shelter and street outreach activities.
3. Added text to require completion of the federal environmental review with funds other than the federal award and prior to a funding agreement for housing and non-housing capital projects, except for projects funded by the HOME program for predevelopment expenses, which may qualify for reimbursement provided that certain criteria are met.
4. Addition of “Buy America, Build America”, a new federal law requiring specific projects to use certain building materials from manufactured sources located in the United States.
5. Prohibition of using Indirect Cost Rates (ICR) by funded organizations, including a definition of ICR.
6. Text addition requiring that applicants abide by the County of Sonoma Living Wage Ordinance.
7. Clarification of the section on the consultation process with CoC for funding proposals involving homeless services, homeless prevention, and or rapid rehousing as well as a revision requiring that all funding proposals involving homeless services and homeless prevention be shared with the CoC for comment regardless of the program source.
8. Deletion of the CDBG Cares Act addendum, which was replaced with the HOME-ARP addendum (CDBG Cares Act funds are no longer available).
9. Addition of a funding priority to projects or services that emphasize self-sufficiency of agencies and or life skills for beneficiaries.
10. Other non-substantive clerical, minor clarifications, and or corrections throughout the document.
The Cities and Towns Advisory Committee held a public hearing on September 20, 2023 and voted to recommend approval to your Board.
County Fund for Housing Policy
The County Fund for Housing (CFH) Policy was last updated in May 2017. This funding program receives revenue from County Inclusionary and Workforce Housing in lieu fees, Transient Occupancy Tax, Reinvestment and Revitalization (R&R), and other sources as available, to provide financing for the development and preservation of affordable housing for very low-income households. Proposed revisions to the CFH Policy are as follows:
1. Reinsert the funding preference for non-profit developers, in compliance with the County’s Housing Element. This preference was included in prior versions of the CFH Policy and will increase the likelihood that units will remain affordable for a longer period.
2. Reinstate the eligibility of emergency shelters, transitional housing, group homes, and other types of congregate facilities that serve special needs populations. This preference was included in prior versions of the CFH Policy and was removed a few years ago when the County was prioritizing a “housing first” approach to address homelessness. Since the onset of the coronavirus pandemic, however, the County has expanded its use of these varied congregate housing types, which are in great need to assist people who are homeless. Expanding the eligible project types will allow funding to be awarded to a mix of project types, increasing the availability of housing options for all County residents.
3. Clarify that CFH funds may be invested in the form of a grant for projects using the community housing land trust model to achieve affordability in perpetuity.
4. Allow investment of CFH funds within the incorporated boundaries of municipalities only if the jurisdiction and County have executed a Regional Housing Needs Allocation (RHNA) Sharing Agreement.
5. Calculate the number of units to be restricted by CFH affordability requirements using the federal HOME Program per-unit subsidy limits model, which sets a specific dollar limit on the amount of funds that can be used to assist each unit, rather than using a prorated ratio of CFH funds to total development costs.
6. Remove the reference to extremely low-income “floating units” requirements, as the CFH Policy no longer targets assisted units to that income category (although they are still allowed).
7. Reinsert the requirement that CDC staff submit an annual progress report on the use of the CFH to your Board, which had been deleted from prior versions of the policy for purposes of efficiency due to high staff turnover experienced at CDC at the time the last update was completed. The progress report will be provided at the time the annual CFH funding recommendations is brought to your Board.
8. Non-substantive revisions to the CFH Policy make minor clerical, text, and format corrections to overall document.
At their public meeting on September 21, 2022, the Community Development Committee voted to recommend to your Board’s approval of the revised CFH Policy. Approval of this agenda item will authorize the CDC staff to take all actions necessary to implement the provisions of the revised policies.
Authorization for CDC and Housing Authority Funding Requests
The Federal Funding Policies require all project sponsors to include with their application evidence of their governing board’s approval to submit a request for funding. To comply with this requirement the CDC and the Sonoma County Housing Authority request your Board’s approval for the following funding requests:
1. A request by CDC to apply for $250,000 in FY 2024-2025 CDBG funding for the Housing Rehabilitation Loan Program and Mobile Home Earthquake Resistant Bracing System Grant Program.
2. A request by the Sonoma County Housing Authority to apply for $100,000 in FY 2024-2025 HOME funding to provide monthly rental subsidies and or security deposits under the Tenant-Based Rental Assistance program.
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 5: Continue to collaborate with local partners, including Continuum of Care, to advance planning and policies to address homelessness.
The Federal and County Fund for Housing policies guide the administration and allocation process of grant funds to eligible projects. These projects include public services and housing development to address homelessness in the county. Approval of the policies will support the Community Development Commission’s efforts to reduce homelessness countywide as well as support the goals of the Continuum of Care Strategic Plan.
Racial Equity:
Was this item identified as an opportunity to apply the Racial Equity Toolkit?
No
Prior Board Actions:
12/13/2022 Approval of the 2023-2024 Federal Funding and LMIHAF-Homeless Services Policies
05/23/2017 Approval of the revised County Fund for Housing Policy
Fiscal Summary
Narrative Explanation of Fiscal Impacts:
The proposed policy revisions will have no fiscal impact. The Action Plan with proposed funding allocations will come before your Board in May of 2024 for the federal grant programs and will include any proposed funding for the Tenant-Based Rental Assistance program and the CDBG Housing Rehabilitation program as well as the Earthquake Bracing System Grant program. If funding requested by CDC to these programs is allocated, CDC staff will be able to continue implementing the programs. CFH funding recommendations will come to your Board annually, in the fall. With the County serving as the lead agency in the urban county entitlement jurisdiction, there are no fiscal impacts in applying for funding
Narrative Explanation of Staffing Impacts (If Required):
The proposed revisions to the two policies will not cause staff impacts.
Attachments:
Attachment 1: Proposed Federal Funding and LMIHAF-Homeless Services Policies
Attachment 2: Proposed County Fund for Housing Policy
Related Items “On File” with the Clerk of the Board:
2023-2024 Federal Funding and LMIHAF-Homeless Services Policies
2017 County Fund for Housing Policy