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Consider awarding Solano County Housing Trust Fund allocations as a result of a Notice of Funding Availability as follows: a $93,000 grant to Solano-Napa Habitat for Humanity; and a $3,200,000 loan to The Hampstead Companies for 107 affordable housing units in Dixon; and Authorize the County Administrator to execute any and all documents related to the awards
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Published Notice Required? Yes ____ No _X _
Public Hearing Required? Yes ____ No _X _
DEPARTMENTAL RECOMMENDATION:
The County Administrator’s Office recommends the Board of Supervisors consider awarding Solano County Housing Trust Fund allocations as a result of a Notice of Funding Availability as follows: a $93,000 grant to Solano-Napa Habitat for Humanity; and a $3,200,000 loan to The Hampstead Companies for 107 affordable housing units in Dixon; and Authorize the County Administrator to execute any and all documents related to the awards.
SUMMARY:
On September 12, 2023, the Board of Supervisors approved a Notice of Funding Availability (NOFA) for the Solano County Housing Trust Fund (SCHTF) in the amount of $3.2 million, the balance of available funds in the SCHTF at that time. Since that date, the Board has approved an additional $1.7 million to be added to the housing trust fund, bringing the total available to $4.9 million.
The County received four applications totaling nearly $7.3 million in requested funds. The evaluation committee reviewed and scored the applications, and staff is recommending the Board consider awarding funding to the two highest scoring applications: Solano-Napa Habitat for Humanity for three units for purchase by low-income households and The Hampstead Companies, for the development of 107 affordable housing units for households with incomes at or below 60% of the area median income for the applicable household size. These units are located in Dixon in the Homestead Master Plan Community, southwest of W. “A” Street.
Funding these two applications would total $3,293,000, leaving a balance of $1,607,000 in the SCHTF.
FINANCIAL IMPACT:
The SCHTF is currently funded with $3,000,000 in American Rescue Plan Act (ARPA) funding, plus $200,000 in funding from the Community Investment Fund. An additional $1,700,000 in APRA funds previously set aside for an accessory dwelling unit program was allocated to the SCHTF by the Board on November 7, 2023, bringing the total to $4,900,000.
The NOFA was released when the fund had a balance of $3.2 million and the SCHTF guidelines allows but does not require the Board to award funds beyond the amount announced in the NOFA; in this case, $3.2 million. However, staff does recommend awarding $3,293,000 to fully fund the two highest ranking applications. Staff recommends retaining the remaining funds of $1,607,000 for use on a potential County-led affordable housing project on County-owned property.
There are no General Fund costs to this item. The costs associated with preparing the agenda item are nominal and absorbed by the department’s FY2023/24 Working Budget.
DISCUSSION:
The SCHTF NOFA (Attachment A) was released on September 15, 2023 and was initially due on October 23, 2023; however, in order to ensure the NOFA was available on the County’s Bids and Proposals web page, as well as on the ARPA available funds page, the due date was extended through November 8, 2023. Applicants who submitted their applications on October 23, 2023 were informed via email they had additional time to submit their applications if they chose; both applicants who submitted early confirmed their applications were complete and they did not require additional time. Attendance at a virtual applicant’s conference was mandatory, and two were held, the first on September 28, 2023 and the second on October 17, 2023. Attendance was only required at one session.
The evaluation committee was comprised of a Senior Management Analyst in the County Administrator’s Office and a Senior Planner from the County of Contra Costa. The committee met on November 30, 2023 to review and score the applications based on the scoring criteria contained in the NOFA. There was a maximum score possible of 106 points, including 6 possible bonus points. All four applications scored very highly and represent excellent projects that will add much needed affordable housing units within the county. None of the applications were for units in the unincorporated areas of the county; one of the applications is for a project in the city of Dixon, which is within the jurisdiction of Solano County’s Housing Authority, two are in the city of Fairfield, and one is in the city of Vacaville.
The four applications received totaled nearly $7.3 million and all would align with the Regional Impact Council’s 1-2-4 framework by providing a permanent affordable housing resource. All applicants and the amount of SCHTF funding they requested are listed below in the order ranked by the evaluation committee:
1. Solano-Napa Habitat for Humanity (average score = 87) - total grant requested - $93,000
2. The Hampstead Companies (average score = 86) - total loan requested $3.2 million
3. EAH Inc. (average score = 84.5) - total loan requested - $1.5 million
4. Eden Housing (average score = 84) - total loan requested - $3.2 million
1. Solano-Napa Habitat for Humanity’s application (Attachment B) requests a grant of $93,000 for its project on Woolner Avenue in the city of Fairfield. The project consists of three houses which will be sold to families whose annual household income does not exceed 80% of the Area Median Income (AMI), or $91,500 for a family of four. The three families were chosen in September 2022 and are required to contribute 500 hours of sweat equity towards building their homes, which they have already begun. Each family will pay no more than 30% of their income towards housing costs.
The County previously awarded $215,000 in ARPA funds to the City of Fairfield for this project. The funds were used to perform flood plain remediation work to remove the property from the flood plain to eliminate the need for the low-income homeowners to maintain costly flood insurance on their properties. Habitat is requesting the $93,000 in the form of a grant for gap financing due to increased costs due to delays in securing building permits.
2. The Hampstead Companies, a national for-profit affordable housing developer, submitted an application (Attachment C) for a loan of $3.2 million, or 65% of the available balance of the SCHTF, for its project Prospera at Homestead located in the city of Dixon on Mourning Dove Drive. The project is part of the Homestead Master Plan Community in southwest Dixon, which will include a fire station, neighborhood parks, and a series of interconnected trails which provide access to various recreational opportunities. The project is adjacent to Hampstead’s second project, Silvey Villas at Homestead, which is a 72-unit senior community currently under active construction. The proposed units are close to Tremont Elementary School, Sutter Medical Plaza, Safeway grocery store, and the Dixon Public Library.
The managing general partner is Affordable Housing Community Development Corporation, a non-profit that will own the property. It will be managed locally by FPI Management with a manager living onsite. It includes 107 two- and three-bedroom units that will be available to households with incomes that do not exceed 60% of the Area Median Income for the household size (currently $68,640 for a four-person household), plus the one manager’s unit. This income level is typical of workforce housing.
The onsite amenities will include a Resident Services Coordinator, an afterschool program for school-age children during the school year, a playground, an outdoor BBQ area, and green space for outdoor recreation. The units will include energy-saving measures such as roof-mounted solar, and the property will have infrastructure for electric vehicle charging stations.
The project will partner with the Solano County Housing Authority (SCHA), as administered by the Vacaville Housing Authority, which has pledged eight project-based vouchers to the project. The SCHA has a Local Resident preference, which means any vacancy in the eight project-based voucher-assisted units will be filled by a household from the SCHA’s waiting list whose head of household, spouse, or co-head of household either lives or works in the SCHA’s jurisdiction, which consists of the cities of Dixon, Rio Vista, and unincorporated areas of the county.
The breakdown of the affordability is as follows:
Two-Bedroom Units
• 5 units affordable at 30% of AMI, including 4 Project-Based Vouchers
• 6 units affordable at 50% of AMI
• 42 units affordable at 60% of AMI
Three-Bedroom Units
• 6 units affordable at 30% of AMI, including 4 Project-Based Vouchers
• 6 units affordable at 50% of AMI
• 42 units affordable at 60% of AMI
Additionally, initial marketing and outreach for the units that are not assisted by vouchers will be focused locally for pre-leasing, including construction signage, local flyers, and postings/ad in local newspapers.
Hampstead requests that an award be in the form of a loan with a term of 18 years to coincide with the tax credit compliance period of the property plus one year, as required by the Senior Lender. The additional year allows the subordinate debt to mature after the senior debt and is a requirement of the tax-exempt bond redemption that occurs concurrently at the senior loan maturity and is a prerequisite for potential securitization. Interest would be 3% simple interest and is projected to result in $1,029,184 in earned interest for the County to be paid in installments starting in Year 7 with payment in full occurring in Year 17. The proposed repayment terms (see Attachment F) are 50% of cash flow after the payment of the subordinate management fee and the deferred developer fee, which is projected to be paid off in year 7.
Full occupancy of the project is expected by November 2025. The project is permit-ready, and the City of Dixon has provided a letter stated that planning entitlement and CEQA have been approved and the City has completed the plan check process; permits are ready to issue upon payment of all fees. The project is experiencing a gap in financing due to existing market conditions including continuously rising interest rates and inflationary construction prices. The $3.2 million requested represents 6.83% of the total development costs of $46.8 million: other funding sources include a first mortgage ($18 million); State 4% Low-Income Housing Tax Credits ($5.6 million); federal 4% Low-Income Housing Tax Credits ($15.8 million) and various other sources ($4.1 million).
3. EAH’s application (Attachment D) is for the Tabor Commons project located in the city of Fairfield on E. Tabor Avenue. There will be 66 units of affordable housing, affordable as follows:
• 20 units available to households at 20%
• 20 units available to households at 30%
• 8 units available to households at 40%
• 10 units available to households at 50%
• 8 units available to households at 60%
Amenities for the project will include onsite-laundry, a community room with kitchen, a computer room, and space for onsite-resident services and case management. EAH will offer supportive services to 16 units reserved for individuals with intellectual/development disabilities (IDD) through Section 811 Supportive Housing for Persons with Disabilities program funding. They will provide third-party case managers for all IDD residents.
The County previously provided $4.5 million in ARPA funds to the City of Fairfield for this project, and recently the Board approved the transfer of an additional $600,000 from another City of Fairfield ARPA project to this one, bringing the total of County ARPA funds to $5.1 million. EAH is requesting an additional $1.5 million in the form of a loan.
4. Eden Housing is an experienced non-profit developer whose local projects include the Sacramento Street units in Vallejo, which were partially funded with the County’s No Place Like Home funds, and they currently own and operate six affordable housing apartment complexes located in Fairfield, Vacaville, and Vallejo. The proposed project under the NOFA application (Attachment E) is Oak Grove Apartments in the city of Vacaville. The project is located on W. Monte Vista Avenue and includes 59 new construction one- and two-bedroom apartments exclusively for seniors age 55 and older, plus one manager’s unit. They will be available to seniors with annual incomes that do not exceed 40% of the Area Median Income for the family size, or approximately $32,050 for a one-person household. Each of the units, with the exception of the manager’s unit, will also be assisted by Project-Based Vouchers through the Vacaville Housing Authority, which applies a Local Resident preference to its wait list, for long-term subsidy. The breakdown of the affordability is as follows:
One-Bedroom Units
• 11 units affordable at 20% of AMI
• 16 units affordable at 30% of AMI
• 28 units affordable at 40% of AMI
Two-Bedroom Units
• 2 units affordable at 30% of AMI
• 2 units affordable at 40% of AMI
The project consists of two 3-story buildings with an elevator in each; a 1,123 square foot community room; 11,588 square foot indoor common area that includes a fitness room and a laundry room in each building; and 11,000 square feet of open space which includes a community garden, walking paths and tables.
Proposed funding for this project includes $4.15 million from the City of Vacaville (committed) and a pending grant application to the State under its HOME Investment Partnerships program for $7 million, among other sources.
ALTERNATIVES:
The Board could choose the following alternatives
1. Not to award SCHTF funds; however, this is not recommended as the Board has identified the development of new affordable housing units as a priority in its goal setting and these awards support this priority; or
2. Award different amounts to the recommended or different applicants due to the closeness of the final scores; however, this is not recommended as the applications were reviewed and ranked by the evaluation committee and staff supports the recommendations.
OTHER AGENCY INVOLVEMENT:
None
CAO RECOMMENDATION:
APPROVE DEPARTMENTAL RECOMMENDATION