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CC - Item 4A - Public Hearing to Adopte Resolution Authorizing Application for Permanent Local Housing Allocation Funds ProgramROSEMEAD CITY COUNCIL STAFF REPORT TO: THE HONORABLE MAYOR AND CITY COUNCIL FROM: BEN KIM, CITY MANAGER DATE: NOVEMBER 8, 2022 SUBJECT: PUBLIC HEARING TO ADOPT A RESOLUTION AUTHORIZING APPLICATION FOR PERMANENT LOCAL HOUSING ALLOCATION (PLHA) FUNDS FROM THE CALIFORNIA DEPARTMENT OF HOUSING AND COMMUNITY DEVELOPMENT SUMMARY The California Department of Housing and Community Development ("HCD") issued a Notice of Funding Availability ("NOFA") for Permanent Local Housing Allocation ("PLHA") funding. According to HCD, the City of Rosemead is eligible for $1,463,835 in 2019, 2020, and 2021 allocation funds. The PLHA program provides a permanent source of funding to cities and counties to help meet the unmet need for affordable housing and increase the supply of affordable housing units. To receive the funding, the City must submit an application to the HCD by November 30, 2022. The application includes a five-year plan of how the funds will be allocated. The 2019, 2020, and 2021 PLHA funds represent the first three years of the five-year plan. The last two years (2022 and 2023) are not included in the NOFA period. HCD has estimated that the total allocation over the five-year period (2019 to 2023) to be $2,059,428. Therefore, it is recommended that the City Council: 1. Conduct a public hearing to receive community feedback on the Permanent Local Housing Allocation ("PLHA") 5 -year funding allocation plan; 2. Authorize the City Manager to modify the draft application as needed prior to submittal; and 3. Adopt Resolution 2022-61 authorizing application submittal and receipt of grant funding from the California Department of Housing and Community Development's Permanent Local Housing Allocation Program. AGENDA ITEM 4.A City Council Meeting November 8, 2022 Page 2 of 3 DISCUSSION Under the PLHA program, funding is provided in the form of grants to entitlement jurisdictions based on the formula prescribed under federal law for the Community Development Block Grant ("CDBG") program over a five-year funding period. The City is an entitlement jurisdiction and is eligible to receive an allocation totaling $1,463,835 in funds for 2019, 2020, and 2021. The allocations for the remaining two years (2022 and 2023) are not included because the funds are derived from recording fees for real estate transactions paid to the County of Los Angeles and these dollar amounts are not known yet. HCD has estimated that the total allocation over the five- year period (2019 to 2023) to be $2,059,428. It is important to note that this is only an estimate since annual PLHA amounts are subject to change because PLHA funding is generated through a fee on real estate transactions, which may fluctuate from year to year. It is anticipated that the State will issue grant awards on or about February 28, 2023. The City plans to utilize PLHA funding for the pre -development and development of affordable housing and ownership housing that meets the needs of our community's growing workforce earning up to 150 percent of the average median income ("AMI"). There are specific activities that the City must meet to be eligible for the grant funds, including 1. Conduct a public hearing to receive input on the proposed use of funds. This public hearing satisfies this requirement. 2. Adopt a Housing Element no later than the award of the grant funds which is estimated to be no later than February 28, 2023. The City is in compliance as the Housing Element has been adopted by the City Council and certified by the State of California. 3. Submittal of the Housing Element Annual Performance Report ("APR") for each corresponding application funding year (2019, 2020, and 2021) no later than November 30, 2022. The City is in compliance as 2019, 2020, and 2021 APRs have been submitted. STAFF RECOMMENDATION It is recommended that the City Council: 1. Conduct a public hearing to receive community feedback on the Permanent Local Housing Allocation ("PLHA") 5 -year funding allocation plan; 2. Authorize the City Manager to modify the draft application as needed prior to submittal; and City Council Meeting November 8, 2022 Page 3 of 3 3. Adopt Resolution 2022-61 authorizing application submittal and receipt of grant funding from the California Department of Housing and Community Development's Permanent Local Housing Allocation Program. FISCAL IMPACT There is no impact to the General Fund for conducting a public hearing and submittal of PLHA plan. STRATEGIC PLAN IMPACT The City's existing programs support several goals of the 2030 Strategic Plan, including supporting housing development, at risk -residents, and economic development. PUBLIC NOTICE PROCESS Notice of the public hearing was published in the Rosemead Reader on October 31 st, as well as through the regular agenda notification process. , Prepared by: C.J , Charlotte Cabeza Management Analyst Submitted by: / "L Michael Bruckner Assistant City Manager Attachment A: Resolution No. 2022-61 Attachment B: Permanent Local Housing Program Application Attachment C: Permanent Local Housing Program Five -Year Plan Attachment A Resolution No. 2022-61 Attachment 1 (Resolution in State HCD Format) RESOLUTION 2022-61 CITY OF ROSEMEAD AUTHORIZING RESOLUTION OF CITY OF ROSEMEAD AUTHORIZING THE APPLICATION AND ADOPTING THE PLHA PLAN FOR THE PERMANENT LOCAL HOUSING ALLOCATION PROGRAM The Majority of the City Council Members of Citv of Rosemead City of Rosemead hereby consents to, adopts, and ratifies the following resolution: A. WHEREAS, the Department is authorized to provide up to $304 million under the 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 (SB 2)). B. WHEREAS the State of California (the "State"), Department of Housing and Community Development ("Department') issued a Notice of Funding Availability ("NOFA") dated 5/3/2021 under the Permanent Local Housing Allocation (PLHA) Program; C. WHEREAS City of Rosemead is an eligible Local government who has applied for program funds to administer one or more eligible activities, or a Local or Regional Housing Trust Fund to whom an eligible Local government delegated its PLHA formula allocation. D. WHEREAS the Department may approve funding allocations for PLHA Program, subject to the terms and conditions of the Guidelines, NOFA, Program requirements, the Standard Agreement, and other contracts between the Department and PLHA grant recipients; NOW THEREFORE BE IT RESOLVED THAT: 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 C of the current NOFA $ 2,059,428.00 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 Section 302(c)(4) of the Guidelines, Applicant's PLHA Plan for the 2019-2023 Allocations is attached to this resolution, and Applicant hereby adopts this PLHA Plan and certifies compliance with all public notice, public comment, and public hearing requirements in accordance with the Guidelines. 5. If applicable: Applicant certifies that it was delegated by [insert name of the delegating local government] to submit an application on its behalf and administer the PLHA grant award for the formula allocation of PLHA funds, pursuant to Guidelines Section 300(c) and 300(d), and the legally binding agreement between the recipient of the PLHA funds and the Applicant is submitted with the PLHA application. 6. If applicable: Applicant certifies that it has or will subgrant some or all of its PLHA funds to another entity or entities. Pursuant to Guidelines Section 302(c)(3), "entity' means a housing developer or program operator, but does not mean an administering Local government to whom a Local government may delegate its PLHA allocation. 7. If applicable: Applicant certifies that its selection process of these subgrantees was or will be accessible to the public and avoided or shall avoid any conflicts of interest. 8. If applicable: Pursuant to Applicant's certification in this resolution, the PLHA funds will be expended only for eligible Activities and consistent with all program requirements. 9. If applicable: 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). 10. If applicable: Applicant certifies that, if funds are used for the development of an Affordable Rental Housing Development, the Local government shall make PLHA assistance in the form of a low-interest, deferred loan to the Sponsor of the Project, and such loan shall be evidenced through a Promissory Note secured by a Deed of Trust and 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. 11. 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. 12. Ben Kim 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 Applicant, as the Department may deem appropriate. PASSED AND ADOPTED at a regular meeting of the City of Rosemead this day of, November 2022, by the following vote: AYES: Enter no. ABSTENTIONS: Enter no. NOES: Enter no. ABSENT: Enter no. Signature of Approving Officer: Signature of Approving Officer Sean Dang, Mayor INSTRUCTION: The attesting officer cannot be the person identified in the resolution as the authorized signor CERTIFICATE OF THE ATTESTING OFFICER The undersigned, Officer of Rosemead does hereby attest and certify that the forgoing Resolution is a true, full and correct copy of a resolution duly adopted at a meeting of the City of Rosemead which was duly convened and held on the date stated thereon, and that said document has not been amended, modified, repealed or rescinded since its date of adoption and is in full force and effect as of the date hereof. ATTEST: Signature of Attesting Officer Signature of Attesting Officer Ericka Hernandez, City Clerk Attachment B Permanent Local Housing Program Application Local Govemment Formula Allocation for New Applicants Rev. 211622 Eligible A licantT EMttlement. Local Govemment Recipient of PLHA Formula Allocation: Rosemead 2020 PLHA NOFA Formula Allocation Amount: $343,238 1 2020 NOFA Allowable Local Admin (5%): 1 $17,162 2021 PLHA NOFA Formula Allocation Amount: 533,498 2021 NOFA Allowable Local Admin (5%): 1 $26,675 2022 PLHA NOFA Formula Allocation Amount: 6587,099 2022 NOFA Allowable Local Admin (51/6): 1 $29,355 Instructions: If the Local Government Recipient of the PLHA Formula Allocation delegated its PLHA formula allocation to a Local Housing Trust Fund or to another Local Government, the Applicant (for which intonation is required below) is the Local Housing Trust Fund or administering Local Government. The PLHA award will be made to the Applicant (upon meeting threshold requirements) and the Applicant is responsible for meeting all program requirements throughout the term of the Standard Agreement. The 302(c)(4) Plan template worksheet requires first choosing one or more of the Eligible Activities listed below. If "Yes" is clicked, the 302(c)(4) Plan worksheet opens a series of questions about what precise activities are planned. Some specific activities, such as providing downpayment assistance to lower-income households for acquisition of an affordable home, could be included under either Activity 2 or 9. Please only choose one of those Activities; don't list the downpayment assistance under both Activities. If the PLHA funds are used for the same Activity but for different Area Median Income (AMI) level, select the same Activity twice (of more times) and the different AMI level the Activity will serve. Please enter the percentage of funds allocated to the Activity in only the first Activity listing to avoid double counting the funding allocation. For each year (2019-2023), allocations must equal 100% annually including the allowable administrative costs of up to 5%. Eligible Applicants §300 §300(a) and (b) Eligible Applicants for the Entitlement and Non -Entitlement formula component described in Section §1 00(b)(1) and (2) are limited to the metropolitan cities and urban counties allocated a grant for the federal fiscal year 2017 pursuant to the federal CDBG formula specified in 42 USC, Section §5306 and Non-entiflement local governments. Applicant: City, of Rosemead Address: 8838 Valley Boulevard i Rosemea City !.State Stale: CA Zi 91770 Coun Las Angeles Auth Rep Name: Ben Kim de: City Manager Auth Rep. Email: Bkim Cityofrommead.org Phone: 828-569-2169 Address: 18838 Valley Boulevard City: Rosemead IState: CA IZip Code: 91770 Contact Name: JCharlofte Cabeza Title: Management AnalystI Contact Email: =beta@Utyofrowmead.org lContact Phone 1 626-569-2153 Address: 18838 Valley Boulevard City: Rosemead State ICA JZip Code: 1 91770 1300(d) Is Applicant delegated by another Local government to administer on its behalf its formula allocation of program funds? No A sample agreement can §300(d) If Applicant answered "Yes" above, has the Applicant attached the legally binding agreement required by §300 (c) and (d)? be found by tlouble tricking N/A on the icon to the right Application and Adopting the Pursuant to section 302(c)(4) of the Guidelines, Applicant's PLHA Plan for 2019-2023 File Name: PLHA Plan 12019-2023 Allocationsl allocations is attached to this resolution, and Applicant certifies compliance with all public Yes Uploaded to Yes Rego notice, comment, and hearing requirements in accordance with the Guidelines. HCD? File Name: Anol TIN Uploaded to HCD? Yes File Name: Legally binding agreement between Delegating and Administering Local Governments Applicant Delegation Agreement Uploaded to HCD? Yes (sample provitle"ust trick on icon in row 17, column At) Eligible Activities, §301 §301(a) Eligible activities are limited to the following: Included? §301(a)(1) The 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. r YES §301(a)(2) The predevelopment, development, acquisition, rehabilitation, and preservation of affordable rental and ownership housing, including Accessory Dwelling r YES 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. §301(a)(3) Matching portions of funds placed into Local or Regional Housing Trust Funds. r YES §301(a)(4) Matching portions of funds available through the Low- and Moderate -Income Housing Asset Fund pursuant to subdivision (d) of HSC Section 34176. r YES §301(a)(5) Capitalized Reserves for services connected to the preservation and creation of new permanent supportive housing. r YES §301(a)(6) Assisting persons who are experiencing or At-nsk of homelessness, including, but not limited to, providing rapid re -housing, rental assistance, r YES 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. §301(a)(7) Accessibility modifications in Lower-income Owner -occupied housing. r YES §301(a)(8) Efforts to acquire and rehabilitate foreclosed or vacant homes and apartments. r YES §301(a)(9) Homeownership opportunities, including, but not limited to, down payment assistance. r YES §301(a)(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 of greater investment in the Project. The r- YES county fiscal incentives shall be in the form of a grant or low-interest loan to an affordable housing Project. Matching funds investments by both the county and the city also shall be a grant or low-interest deferred loan to the affordable housing Project. Threshold Requirements, §302 §302(a) The Applicant's Housing Element and Delegating Local Government's Housing Element (if applicable) wasxwere adopted by the Local Government's governing body by the application submittal date subsequently determined to be in substantial compliance with state Housing Element Law pursuant to Government Code Section 65585. Yes §302(b) Applicant or Delegating Local Government has submitted the current or prior year's Annual Progress Report to the Department of Housing and Community Development pursuant to Government Code Section 65400. Yes §302(c)(2)Applicant certified in the Resolution submitted with this applicaltion that submission of the applicsition was authorized by the governing board of the A licant. Yes §302(c)(3) Applicant certified in the Resolution submitted with this application that, if the Local Government proposes allocation of funds for any activity to another entity, the Yes Local government's selection process had no conflicts of interest and was accessible to the public. §302(c)(4)Applicant certified in the Resolution submitted with this application that the application include a Plan in accordance with §302(c)(4)? Yes §302(c)(4)(0) Applicant certified in the Resolution submitted with this application that the Plan was authorized and adopted by resolution by the Local Government and that Yes the public had an adequate opportunity to review and comment on its content. PLHA Page t vomum ai«anon Ancararion §302(c)(5) Applicant certified in the Resolution submitted with this application that the Plan submitted is for a term of five years (2019-2023). Local Governments agree to inform the Department of changes made to the Plan in each succeeding year of the term of the Plan. yes §302(c)(6) Applicant certified in the Resolution submitted with this application that it will ensure compliance with §302(c)(6) if funds are used for the acquisition, construction, or rehabilitation of for-sale housingprojects or units within for-sale housing P 9 Projects. j Yes §302(c)(7) Applicant certified in the Resolution submitted with this application that it will ensure that the PLHA assistance is in the form of a low-interest, Warned loan to the Sponsor of the Project, if funds are used for the development of an Affordable Rental Housing Development. The loan shall be evidenced through a Promissory Note secured by a Deed of Trust and a Regulatory Agreement shall restrict occupancy and rents in accordance with the Local government-approved underwriting of the Project for a term of at least 55 years. yes §3024C)(8)Has Applicant attached a program income reuse plan describing how repaid loans or accrued interest will be reused for eligible activities specified in Section Yes File Name: Reuse Plan Program Income Reuse Plan describing how repaid loans or accrued interest will be used for eligible activities in Section 301. Narrative uploaded to HCD? yes Administration Applicant agrees to adhere to 500, Accounting Records. yes Applicant agrees to adhere to 01, Audits/Monftoring of Project Files. Yes Applicant agrees to adhere to 502, Cancellationrrermination. Yes Applicant agrees to adhere to §603, Reporting. Yes Certifications On behalf of the entity identified below, I certify that: The information, statements and attachments included in this application are, to the best of my knowledge and belief, true and correct and I possess the legal authority to submit this application on behalf of the entity identified in the signature block. Ben Kim City Manager Authorized Representative Printed Name I I Title I I Signature Date PLHA Pan 2 F .I. A I.&Ioa AP ka kb Attachment C Permanent Local Housing Program Five -Year Plan §302(c)(4)Plan Rev. 2/1682 30 e 6 A Describe the manner in which allocated Pons will W used for eligible activities. The City of Rosemead has been slated to receive approximately $2,059,428 over the next (5) fiscal years in Permanent Local Housing Allocation (PLHA) program funding, The City intends to utilize program funding under the direction of eligible activity §301(a)(2) The predevelopmenp development acquisition, rehabilitation, and preservation of affordable rental and ownership housing, including Accessory Dwelling Units (ADUs), that meets the needs of a growing wWorca gaming up to 120 percent of AMI, or 150 percent of AMI in high-cost areal The City will dedicate funding received for all (5) years to the acquisition and development of single -family properties for purchase by households earring at or below 150 Percent of All §302(cX4Xa) Provide a description of the way the Local government will prioritize investments that increase the supply of Musing for households with incomes at or below 60 percent of Area Median Income (AMI). When the opportunity for new affoMable housing projects is presented to d1e City, one of Me criterion used to weigh project applications will be whether the Project creates or Preservation of the greatest number of affordable housing units affordable to the lowest-income populations. The City will use a scoring mechanism that favor feasible projects with greater depth of affordability for extremely-low, vary-low and low-income households. 202 c / C Provide a description of how the Plan is consistent with the programs sat forth in the Local Government's Housing Element. The City of Rosemead's plan for tM utilization of PLHA funding is consistent with the overall goals and objectives of the Citys housing element in which they aim to address and meet the housing needs of all residents within the community. In regard to specific programs outlined in the housing element for which the plan for PLHA funding sat forth in this application aligns, the housing element identfies: Goal 1: Protect existing stable, single -family neighborhoods throughout the City. Policy: Encourage Me construction of new single -family attached and detached dwellings using zoning and other mechanisms. Goal 2: Encourage me development of a range of housing types in a range of prices affordable to all Rosemead residents. Policy: Continue to foster partnerships win community organizations, religious institutions, non-profits, industry groups and other stakeholders to further appohunitiesfor affordable housing. Activities Detail (Activities Detail (Must Make a Selection on Formula Allocation Application worksheet under Eligible Activities, §301)) §301 The predevelopment, development, acquisition, rehabilitation, and preservation of Affordable rental and ownership housing, including Accessory Dwelling Units (ADUs), that meets the needs ore growing workforce earning up to 120 percent of AMI, or 1W percent of AMI in high-cost areas. ADUs shall be available for occupancy for a term of no less Man 30 days. §302O(4)0 Provide a detailed and complete description of how allocated funs will be used for each proposed Affordable Rental and Ownership Housing Activity, Enter Percentage of Funds Allocated for Affordable Ownercccupied Workforce Housing The City of Rosemead has been in active discussions with affordable housing developers for the construction of new ownership units. The City has identified several properties including an approximate 1- ave parcel that could be acquired with the PLHA Program Ponds for the construction of townhomes or condominiums for purchase by persons at or below 1W% of AMI. The City anticipates deeding the Property to the developer in exchange for the recordation of covenants for the sale of Me units to qualified households as well as restricting the sales price to an affordable level. The buyer of the residence would enter into an agreement with the City to maintain affordability covenants for a pehn of not less 20 years. Complete the table below for each proposed Affordable Rental and Ownership Housing Activity to be tuned with 20142023 PLHA allocations. If a single Activity will be assisting households at more than one level of Area Median Income, please list the Activity as many times as needed to capture all of the AMI levels that will be assisted but only show the percentage of annual funding allocated to the Activity one time (to avoid double counting). Funding Allocation Year 2019 2020 2021 2022 2023 Type of Affordable Housing Ownership: Ownership Ownership Ownership Ownership Activity Prede mensnt Acquisition : Acquisition Acquisition : Acquisition 1302(c)(4)(EXi) Percentage of Funds Allocated for Each 30% 65% 95% 95% 95% Affordable Housing Activity §302(cX4XE)(ii) Area Median Income Level Served TOTAL §302(c)(4)(E)(ii) Unmet share of the RHNA at AMI Level Note: complete for years 2019, 0 2020, 2021 only PLHA Page 1 3g2(c)(4) Plan §302(c)(4NEHii) projected - n Number of Households Served 0 §302(c)(4)(Epiv) Period of ARordabiliry for the proposed Activity (55 years required for rental housing projects) §302(cN4NENfii) A descnption of major stepstactions and a proposed schedule for the implementation and completion of each Affordable Rental and Ownership Housing project. The City of Rosemead will actively identify several properties including an approximate construction of new home ownership units with a target date of approximately May 2023. Concurrently, the City of Rosemead will work with a developer for his project. PI -HA P.S. 2 302(c)(4) flan