|
Title:
|
APPROVE revisions to Measure X Housing Fund criteria related to predevelopment activities and first-time homebuyer activities, as recommended by the Conservation and Development Director. (100% Measure X funds)
|
To: Board of Supervisors
From: John Kopchik, Director, Conservation and Development
Report Title: Measure X Housing Funds - Proposed Revisions Related to Predevelopment Loans and First-Time Homebuyer Eligible Activities
?Recommendation of the County Administrator ? Recommendation of Board Committee
RECOMMENDATIONS:
APPROVE revisions to Measure X Housing Fund criteria related to Predevelopment activities and First-Time Homebuyer activities.
FISCAL IMPACT:
There is no General Fund impact. Measure X funds are part of a countywide, 20-year 1/2 cent sales tax approved by Contra Costa County voters on November 30, 2020.
BACKGROUND:
Measure X is a countywide 20-year, 1/2 cent sales tax approved by Contra Costa County voters on November 3, 2020. Collection of the tax began on April 1, 2021. The ballot measure language stated that the intent of Measure X is "to keep Contra Costa's regional hospital open and staffed; fund community health centers, emergency response; support crucial safety-net services; invest in early childhood services; protect vulnerable populations; and for other essential county services."
On November 16, 2021, the County Board of Supervisors (the "Board") approved allocating a portion of Measure X revenue to establish a new funding source to support the development of affordable housing and housing/homelessness related activities, now know as the Measure X Housing Fund (MX Housing Fund). The Board of Supervisors approved and committed $10 million of Measure X funds for Year One and approximately $12 million on an annual basis thereafter for the MX Housing Fund.
On September 20, 2022, the Board approved and authorized the County's Health Services Department-Heath, Housing and Homelessness Division (H3) and the Department of Conservation and Development (DCD) to administer the MX Housing Fund, with H3 administering 25 percent of the overall MX Housing Fund and DCD administering 75 percent of the MX Housing Fund.
As approved by the Board on September 20, 2022, the goals of the Measure X Housing Funds are as follows:
* Support the affordable housing needs of Contra Costa County residents.
* Top priority is to fund affordable housing production and preservation.
* Prioritize filling funding gaps not addressed by other sources.
* Leverage funding wherever possible.
* Maintain flexibility to respond to the County's housing needs as they evolve.
At the same Board meeting, the following priorities and parameters were approved for funding eligibility:
* The funds will prioritize funding for projects serving households earning up to 50% Area Median Income (AMI).
* Projects serving households earning up to 80% AMI are eligible.
* Homeownership affordability term of 20 plus years.
Lastly, the Board approved the following loan or award minimums for DCD's 75% for capital/development projects:
* Predevelopment: $25,000
* Renovation and Microhome projects: $250,000
* Everything else: $500,000
Proposed Revisions
Predevelopment
Measure X Predevelopment Awards: Minimum award of $25,000 with maximum of $500,000 per project. No more than $1,000,000 in Measure X Housing Funds may be allocated for predevelopment loans within DCD's annual competitive Notice of Funding Availability/Request for Proposals (NOFA/RFP) process.
Homeownership
The following is proposed to be added for Measure X homeownership activities:
1. The affordability requirements for Measure X-assisted homeownership units are to be targeted for households earning up to 80% AMI but may also be reserved for households earning between 81-120% AMI. Households earning 80% of AMI or below will be prioritized.
2. Measure X assisted homeownership activities may allow for modest downpayment assistance for first-time homebuyers in conjunction with private mortgage loans.
3. Measure X assisted homeownership purchase price limits are to use the HOME Investment Partnership (HOME) Program Purchase Price Limits, updated annually by the U.S. Department of Housing and Urban Development (HUD). The current purchase price limit for newly constructed single-family homes in Contra Costa County is $712,000, effective as of September 1, 2024.
4. Standard homeownership loan terms for the loan to the developer are zero percent interest for the construction period. The County Measure X loan is considered repaid by the developer when each Measure X affordable home is sold to a qualified first-time homebuyer and a homeowner resale restriction and/or shared equity agreement is recorded against the property for an affordability term of at least 20 years.
If the above revisions are approved by the Board, DCD staff will incorporate the revisions into the program details for DCD's upcoming annual competitive NOFA/RFP scheduled to be available mid-October 2025.
CONSEQUENCE OF NEGATIVE ACTION:
Without Board approval to revise Measure X Housing Fund criteria related to predevelopment loans and first-time homebuyer eligible activities, DCD staff will not be able to make needed changes in time for the beginning of DCD's FY 2026/27 NOFA/RFP.