To: Board of Supervisors
From: John Kopchik, Director, Conservation and Development
Report Title: Substantial Amendment to the FY 2021/22 Action Plan - HOME Funds
☒Recommendation of the County Administrator ☐ Recommendation of Board Committee
RECOMMENDATIONS:
APPROVE a Substantial Amendment to the County's FY 2021/22 HOME Investment Partnerships Program Action Plan, to award $4,247,500 in HOME Investment Partnership Program (HOME) funds to Mayfair Affordable Housing, a 69-unit affordable multifamily rental housing project located at 11690 San Pablo Avenue, El Cerrito.
FISCAL IMPACT:
There is no fiscal impact to the County General Fund. HOME funds are federal funds provided to the County on a formula allocation basis through the U.S. Department of Housing and Urban Development.
Catalog of Federal Domestic Assistance #14.239
BACKGROUND:
Annually, the County receives an allocation of HOME funds from the United States Department of Housing and Urban Development (HUD). The HOME program aims to expand the supply of decent, safe, sanitary, and affordable housing for very low and low-income households. HUD allocates HOME funds to eligible participating jurisdictions and HOME consortia on a formula basis. HOME funds received by the County may be spent anywhere in the County, including all 19 cities. DCD is responsible for administrating and managing the HOME program. A condition of administering the HOME program is ensuring the timely use of funds.
On May 11, 2021, the Board of Supervisors (the “Board”) approved the Contra Costa County Annual Action Plan for FY 2021/22 HOME funds (the “Action Plan”). On January 9, 2024, the Board approved the recapture of $5,946,000 in HOME funds from previously awarded FY 2021/22 HOME Action Plan housing projects, which are currently delayed:
1. HOME funding of $2,660,000 to the Legacy Court project, a 43-unit affordable new construction rental project in the City of Richmond. The project has not been successful in securing other financing commitments and will not be able to start construction as planned in 2024.
2. HOME funding of $3,286,000 to the Choice in Aging Senior Housing project, an 82-unit affordable new construction rental project in the City of Pleasant Hill. The project has not been successful in securing other financing commitments and will not be able to start construction as planned in 2024.
Mayfair Affordable Housing
The Mayfair Affordable Housing project is for the new construction of a 69-unit affordable rental development located at 11690 San Pablo Avenue in the City of El Cerrito. On May 9, 2023, the Board approved the award of $4,197,500 in FY 2023/24 Measure X/Local Housing Trust Fund (LHTF) monies for construction of the project. On December 6, 2023, the project obtained an award for tax credits and bonds and has all funding awarded to the project and will be starting construction by June 2024.
The FY 2021/22 HOME funds have a contract and expenditure deadline at the end of this year. The Mayfair Affordable Housing project has all funding in place and is ready to begin construction in May/June 2024 after legal documents have been prepared and executed for the construction loan. In order to meet the HOME expenditure deadline, Contra Costa County staff recommends removing the previously awarded $4,197,500 of Measure X/LHTF funds and allocating $4,197,500 in FY 2021/22 HOME funds for the Mayfair Affordable Housing project, plus an additional $50,000 for project delivery costs (total of $4,247,500 in HOME Funds).
There will be $1,698,500 of the recaptured FY 2021/22 HOME funds that will continue to be unallocated and will be added to the available HOME funds for the FY 2024/25 HOME Action Plan. If this recommendation is approved, the FY 2023/24 Measure X/LHTF funds would be replaced by the FY 2021/22 HOME funds for the construction loan with the addition of $50,000 for project delivery related costs. The $4,197,500 in Measure X/LHTF funds that were previously awarded to the Mayfair Affordable Housing project will be added to the available Measure X Housing funds to be distributed as part of the FY 2024/25 affordable housing awards. The affordable housing recommendations for the FY 2024/25 Measure X Housing awards are anticipated to come to the Board for its consideration in May/June 2024.
Affordable Housing Finance Committee
Recommendations related to the HOME program funds are typically made by the Affordable Housing Finance Committee (AHFC) and forwarded to the Board for approval. The AHFC usually meets once or twice each year, and as needed to review other off-cycle items, including revising any previous awards or recommending additional awards. A meeting was attempted to be held in early February 2024 to consider the modifications to the respective project contingencies. Unfortunately, due to lack of quorum, the meeting was not held. Due to the timing needs of the proposed projects as well as the expenditure timelines associated with the HOME program, staff is bringing its recommendation directly to the Board.
CONSEQUENCE OF NEGATIVE ACTION:
Not approving the allocation of HOME funds would prevent the project from proceeding and risk a reduction in future HOME allocations.