To: Board of Supervisors
From: John Kopchik, Director, Conservation and Development
Report Title: Approval of Amended PLHA Five-Year Plan as Recommended by the Director of Conservation and Development.
?Recommendation of the County Administrator ? Recommendation of Board Committee
RECOMMENDATIONS:
APPROVE amending the 5-Year Permanent Local Housing Allocation (PLHA) Plan.
FISCAL IMPACT:
No impact on the General Fund. The PLHA funds are granted through the State of California via a formula in which the County applies to receive its formula share to distribute to eligible projects or activities. Up to 5% of the PLHA grant is allowed for the County's administrative costs.
BACKGROUND:
The Permanent Local Housing Allocation (PLHA) program is a State program with entitlement and competitive components. The State designated Contra Costa County as the administrator of the entitlement grant award for the Contra Costa "Urban County," which includes the unincorporated communities and all cities except Antioch, Walnut Creek, Pittsburg and Concord, which have their own entitlements. The State estimates the Urban County will receive approximately $13 million over the program's first five years. The amount fluctuates from year to year as it is based on recording fees from actual real estate transactions in the State of California.
The required submittal for the original 2021 application included an expenditure plan, referred to as a "Five-Year Plan" (Plan), which the Board approved on December 14, 2021. The Plan identified the broad categories of planned uses of the PLHA award to comply with the program parameters. The original category of use was new, multifamily rental housing construction for households earning up to 80% of the Area Median Income (AMI) anywhere in the Urban County. This was consistent with the Board's direction on August 9, 2021, when it authorized staff to prepare the complete PLHA application and include the funding source in the annual Notice of Funding Available (NOFA) that is issued by the County's Department of Conservation-Housing and Community Improvement (HCI) division.
The State announced in their 2024 PLHA NOFA that jurisdictions would now be required to direct 40% of each allocation to Affordable Owner-Occupied Workforce Housing (AOWH). AOWH is defined in the Permanent Local Housing Allocation Final Guidelines as: "owner-occupied housing per HSC Section 50092.1 that is affordable to persons and families of low or moderate income, as that term is defined in HSC Section 50093, except in high-cost areas where moderate-income shall include households earning up to 150 percent of AMI."
For the County to meet these new requirements and apply for additional PLHA funds, an amendment must be made to the existing 5-Year PLHA plan to include an activity meeting the new AOWH requirements. The County plans to allocate 40% of the PLHA funds to focus its efforts on creating and preserving homeownership opportunities and affordable owner-occupied workforce housing for low- and moderate-income families. Activities that will be undertaken are first-time homebuyer downpayment assistance and rehabilitation of owner-occupied housing. PLHA home ownership assistance will be offered in the form of low-interest, deferred loans. The loans will be evidenced through a Promissory Note that will be secured by a Deed of Trust. For first-time homebuyer downpayment assistance activities, a Shared Equity Agreement between the County and eligible homebuyer will also be required to restrict the occupancy to income-eligible households and to restrict the sales prices for a term of up to 30 years.
The Board's review of this item was advertised in the East Bay Times at a minimum of 10 days in advance of the meeting date, and the Plan was posted online for public review, meeting the State's public notice requirements.
CONSEQUENCE OF NEGATIVE ACTION:
If the Board does not authorize the approval of the new, amended 5-Year PLHA plan, the Urban County will see its future PLHA applications rejected, and the County will not receive millions of dollars to help fund new affordable housing for low-income households over the coming years.
THE BOARD OF SUPERVISORS OF CONTRA COSTA COUNTY, CALIFORNIA
and for Special Districts, Agencies, and Authorities Governed by the Board
body
IN THE MATTER OF AUTHORIZING THE APPLICATION AND AMENDING THE PLHA PLAN FOR THE PERMANENT LOCAL HOUSING ALLOCATION PROGRAM
A. WHEREAS, the Department is authorized to provide up to $296 million under SB 2 Permanent Local Housing Allocation Program Formula Component from the Building Homes and Jobs Trust Fund for assistance to Cities and Counties (as described in Health and Safety Code Section 50470 et seq., Chapter 364, Statutes of 2017 (SB2)).
B. WHEREAS, the State of California (the "State"), Department of Housing and Community Development ("Department") issued a Notice of Funding Availability ("NOFA") dated 10/15/2024 under the Permanent Local Housing Allocation (PLHA) Program;
C. WHEREAS, Contra Costa County is an eligible Local government that has applied for program funds to administer one or more eligible activities.
D. WHEREAS, the Department may approve funding allocations for the PLHA Program, subject to the terms and conditions of the Guidelines, NOFA, Program requirements, the Standard Agreement, and other contracts between the Department and the PLHA grant recipients;
NOW, THEREFORE, BE IT RESOLVED THAT:
1. If Applicant receives a grant of PLHA funds from the Department pursuant to the above referenced PLHA NOFA, it represents and certifies that it will use all such funds in a manner consistent and in compliance with all applicable state and federal statutes, rules, regulations, and laws, including without limitation all rules and laws regarding the PLHA program, as well as any and all contracts Applicant may have with the Department.
2. Applicant is hereby authorized and directed to receive a PLHA grant, in an amount not to exceed the five-year estimate of the PLHA formula allocations, as stated in Appendix B of the current NOFA, to be $13,061,028, in accordance with all applicable rules and laws.
3. Applicant hereby agrees to use the PLHA funds for eligible activities as approved by the Department and in accordance with all Program requirements. Guidelines, other rules, and laws, as well as in a manner consistent and in compliance with the Standard Agreement and other contracts between the Applicant and the Department.
4. Pursuant to Sections 302(c)(4) and 302(c)(5) of the Guidelines, Applicant PLHA Plan Amendment for the 2020-2023 Allocations is attached to this resolution, and Applicant hereby adopts this PLHA Plan Amendment and certifies compliance with all public notice, public comment, and public hearing requirements in accordance with the Guidelines.
5. Pursuant to Applicant's certification in this resolution, the PLHA funds will be expended only for eligible Activities and consistent with all program requirements.
6. Applicant certifies that if funds are used for the acquisition, construction, or rehabilitation of for-sale housing projects or units within for-sale housing projects, the grantee shall record a deed restriction against the property that will ensure compliance with one of the requirements stated in Guidelines Section 302(c)(6)(A), (B) and (C).
7. Applicant certifies that if funds are used for the development of an Affordable Rental Housing Development, the Local government shall make the PLHA assistance in the form of a low-interest, deferred loan to the Sponsor of the Project. Such a loan shall be evidenced through a Promissory Note secured by a Deed of Trust. A Regulatory Agreement shall restrict occupancy and rents in accordance with a Local Government-approved underwriting of the Project for a term of at least 55 years.
8. Applicant shall be subject to the terms and conditions as specified in the Standard Agreement, the PLHA Program Guidelines, and any other applicable SB 2 Guidelines published by the Department.
9. Director of the Department of Conservation and Development, John Kopchik, or his designee, is/are authorized to execute the PLHA Program Application, the PLHA Standard Agreement, and any subsequent amendments or modifications thereto, as well as any other documents which are related to the Program or the PLHA grant awarded to the Applicant, as the Department may deem appropriate.