REPORT TO COUNCIL
SUBJECT
Title
Actions authorizing the County of Santa Clara to allocate up to $409,950 of the City’s 2020 Permanent Local Housing Allocation (PLHA) Funds to rehabilitate and preserve the Belovida Santa Clara Senior Apartments located at 1820 Main Street.
Report
COUNCIL PILLAR
Promote and Enhance Economic, Housing and Transportation Development
BACKGROUND
Senate Bill 2 (2017), as authorized by Health and Safety Code Section 50470, was part of a 15-bill housing package aimed at addressing the state’s housing shortage and high housing costs. One of the results was the creation of the Permanent Local Housing Allocation (PLHA) Program which uses recording fees on real estate documents to fund programs that increase the supply of affordable homes in California. PLHA allocations are based on the same formula used to award federal Community Development Block Grant (CDBG) funds to eligible communities in Federal Fiscal Year (FFY) 2017.
While actual funding amounts are determined each year, the State has estimated the City of Santa Clara’s total five-year (2019-2023) PLHA allocation will be $2,876,946. These funds are distributed in five installments over the five-year period of the agreement. The State requires jurisdictions and consortiums receiving PLHA funds to develop a five-year spending plan which identifies activities for which the funds will be used. PLHA funds may be used for any combination of the following ten activities:
• Activity #1: Construction and rehabilitation, including predevelopment, development, acquisition, rehabilitation, and preservation of multifamily, residential live-work, rental housing that is Affordable to Extremely low-, Very low-, Low-, or Moderate-income households, including necessary operating subsidies.
• Activity #2: The predevelopment, development, acquisition, rehabilitation, and preservation of Affordable rental and ownership housing, including Accessory dwelling units (ADUs), that meets the needs of a growing workforce earning up to 120 percent of AMI, or 150 percent of AMI in high-cost areas. ADUs shall be available for occupancy for a term of no less than 30 days.
• Activity #3: Matching portions of funds placed into Local or Regional Housing Trust Funds.
• Activity #4: Matching portions of funds available through the Low- and Moderate-Income Housing Asset Fund pursuant to subdivision (d) of HSC Section 34176.
• Activity #5: Capitalized Reserves for Services connected to the preservation and creation of new Permanent supportive housing.
• Activity #6: Assisting persons who are experiencing or at risk of homelessness, including, but not limited to, providing rapid rehousing, rental assistance, supportive/case management services that allow people to obtain and retain housing, operating and capital costs for navigation centers and emergency shelters, and the new construction, rehabilitation, and preservation of permanent and transitional housing.
• Activity #7: Accessibility modifications in Lower-income Owner-occupied housing.
• Activity #8: Efforts to acquire and rehabilitate foreclosed or vacant homes and apartments.
• Activity #9: Homeownership opportunities, including, but not limited to, down payment assistance.
• Activity #10: Fiscal incentives made by a county to a city within the county to incentivize approval of one or more Affordable housing Projects, or matching funds invested by a county in an Affordable housing development Project in a city within the county, provided that the city has made an equal or greater investment in the Project.
On December 7, 2021, the City Council adopted a resolution authorizing the City Manager to negotiate and execute a Consortium Agreement with the County of Santa Clara (County), that authorized the County to submit funding applications to the State of California on the City’s behalf for the award of Permanent Local Housing Allocation (PLHA) Program funding. The resolution authorized the County to administer the City’s PLHA funds in accordance with State requirements and with the Consortium Agreement.
The City initially asked the County to allocate 100% of the City’s five-year PLHA funding toward predevelopment, development, acquisition, rehabilitation, and preservation of multifamily, residential live-work, affordable rental housing.
On May 2, 2023 the City Council voted to commit funding for operations of the proposed Benton Lawrence interim family housing project, and the City directed the County to allocate the City’s year three (2021), year four (2022), and year five (2023) PLHA funds ($1,569,568 in total) to assist persons experiencing or at risk of homelessness. On October 24, 2023, the City Council approved an action authorizing the County of Santa Clara to Update the Five-Year Permanent Local Housing Allocation (PLHA) Plan to allocate an additional $306,063 from the 2020 PLHA funds to further help fund operations at the proposed Benton Lawrence Interim Family Housing project. The Benton Lawrence Interim Family Housing project has not been awarded State Homekey funding. As a result, the total funding allocated to Benton Lawrence Interim Family Housing project will need to be reallocated and staff is preparing a recommendation for Council to consider.
However, as part of the October 24, 2023 actions, the City Council also delegated authority to the City Manager to make amendments to the PLHA Consortium Agreement and to direct the County to add or remove activities in the five-year PLHA plan on behalf of the City of Santa Clara, that are consistent with goals stated in a City Council adopted plan including but not limited to the Housing Element, the HUD Consolidated Plan, or the local homelessness response plan. City Council approval would still be required to allocate PLHA funds over $250,000 to specific programs or projects.
On November 14, 2023 the City Council allocated up to $455,516 in 2019 PLHA funds towards the construction of 106 affordable apartments and two manager’s units at 1601 Civic Center Drive.
DISCUSSION
Staff recommends allocating $409,950 from the 2020 PLHA funds to the Belovida Santa Clara Senior Apartments (Belovida Santa Clara). This includes the reallocation of $8,000 previously committed to the Benton Lawrence Interim Family Housing project to the Belovida Santa Clara. The 2020 PLHA funds have to be committed by April 30, 2025 and the City must take action in May 2024 to give the County sufficient time to process a revised plan and submit it to the state. Since this amount is over $250,000, City Council approval is required. Staff recommends allocating these funds as part of a broader collaborative strategy to preserve and stabilize the Belovida Santa Clara senior housing community.
Belovida Santa Clara:
City staff have been in discussions with CORE and Charities Housing regarding structural affordability challenges at the Belovida Santa Clara located at 1820 Main Street. Belovida Santa Clara is a 100% affordable project with twenty-seven 1-bedroom affordable rental units for residents ranging from 30-50% of Area Median Income. Many of the residents are extremely low income and cannot afford to pay the affordable rents that are allowed according to state income limits. The project sponsors have delayed rent increases and deferred maintenance for several years to prevent displacement of the residents. Without a long-term financial intervention, Belovida Santa Clara will need to raise rents to continue operating and this will lead to the displacement of elderly residents.
City staff have been working with Charities Housing, CORE, the County Office of Supportive Housing, Department of Veteran’s Affairs, and Destination Home to structure a long-term solution to stabilize Belovida Santa Clara. The current strategy will convert seven units into permanent supportive housing for veterans using a variety of sources including VASH vouchers. The County intends to commit up to $1,400,000 to pay off the existing senior loan and to fund other expenses. As part of the restructuring, Core will exit the general partnership; Charites (a non-profit affordable housing developer) will remain as the general partner and proceed with the buyout of the limited partnership. Charities Housing has received a reservation of seven Housing and Urban Development Veterans Affairs Supportive Housing (HUD-VASH) vouchers.
Charities Housing has received a commitment from Destination: Home for a two-year rent subsidy to eliminate the rent burden for existing elderly tenants. Destination Home intends to use this as a pilot project for addressing the growing problem of severely rent burdened seniors living in income restricted affordable housing.
Staff recommends using up to $409,950 of the City’s 2020 PLHA funds to cover deferred maintenance and repairs to ensure the project continues to be safe and livable going forward. These repairs include:
• Conversion of small unused community space to offices for the new service providers
• Replace entry fob security system
• Replace broken fire door on second floor
• Replace security camera system
• Repair or replace broken Community Room heater
• Replace air conditioning for Community Room AC
• Replace automatic ADA door opener and related hardware
• Patio irrigation drip system needs to be repaired
• Replace Mechanical Room doors and frame
• Repair 1st floor trash chute door
• Landscaping; tree trimming and conversion to drought tolerant planting
• Replace original boilers, holding tank and water softener
• Repair areas on the exterior that are deteriorated due to water intrusion/damage then recalk and paint
• Replace all interior unit carpet with hard surface flooring
• Paint interior hallways, and common areas including hallways and trash rooms
• Repair garage area leaks and repair damaged sheetrock
The following table provides an updated summary of PLHA funding that has already been allocated, and staff’s recommendation for allocating this portion of the 2020 PLHA funds.
PLHA Funding Summary
|
Year |
Estimated Amount |
Proposed Project |
Expenditure Deadline |
|
2019 (less admin) |
$455,516 |
Construction & Rehabilitation- 1601 Civic Ctr. Dr. |
4/30/2024 |
|
2020 (less admin) |
$409,950 |
Construction & Rehabilitation- Belovida |
4/30/2025 |
|
2020 (less admin) |
$298,150 |
Homelessness - TBD Previously Benton/Lawrence |
4/30/2025 |
|
2021 (less admin) |
$779,148 |
Homelessness - TBD Previously Benton/Lawrence |
4/30/2026 |
|
2022 (Estimated less admin) |
$395,210 |
Homelessness - TBD Previously Benton/Lawrence |
4/30/2027 |
|
2023 (Estimated less admin) |
$395,210 |
Homelessness - TBD Previously Benton/Lawrence |
4/30/2028 |
In conclusion, the City Council has already provided direction to use a portion of the City’s 2020 PLHA funds for construction and rehabilitation activities. Staff recommends allocating these funds to stabilize and prevent displacement at the Belovida Santa Clara.
ENVIRONMENTAL REVIEW
The action being considered does not constitute a “project” within the meaning of the California Environmental Quality Act (“CEQA”) pursuant to CEQA Guidelines section 15378(b)(5) in that it is a governmental organizational or administrative activity that will not result in direct or indirect changes in the environment.
FISCAL IMPACT
The City’s allocation of PLHA funds is administered by the County of Santa Clara and restricted for use by the eligible uses contained in the agreement. The City directs how the City’s portion of the annual PLHA allocations should be used for specific projects or programs. This action does not impact the City’s budget.
COORDINATION
This report was coordinated with City Manager’s Office, City Attorney’s Office, Department of Finance, and Department of Community Development.
PUBLIC CONTACT
Public contact was made by posting the Council agenda on the City’s official-notice bulletin board outside City Hall Council Chambers. A complete agenda packet is available on the City’s website and in the City Clerk’s Office at least 72 hours prior to a Regular Meeting and 24 hours prior to a Special Meeting. A hard copy of any agenda report may be requested by contacting the City Clerk’s Office at (408) 615-2220, email clerk@santaclaraca.gov <mailto:clerk@santaclaraca.gov>.
RECOMMENDATION
Recommendation
1. Direct the County of Santa Clara (PLHA fund administrator) to allocate up to $409,950 from the City’s 2020 Permanent Local Housing Allocation (PLHA) , which includes the reallocation of $8,000 from a PLHA homelessness activity to a PLHA rehabilitation activity to help fund repairs at the Belovida Santa Clara Senior Apartments as part of a long-term repositioning of the project. This funding commitment shall be contingent upon National Environmental Policy Act (NEPA) clearance from HUD, if required.
Staff
Reviewed by: Reena Brilliot, Acting Director of Community Development
Approved by: Jovan Grogan, City Manager
ATTACHMENTS
1. PLHA Consortium Agreement with Santa Clara County