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Receive an American Rescue Plan Act (ARPA) Subject Matter Workgroup presentation regarding affordable housing projects and programs and consider providing further direction
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Published Notice Required? Yes ____ No _X _
Public Hearing Required? Yes ____ No _X _
DEPARTMENTAL RECOMMENDATION:
It is recommended that the Board of Supervisors receive an American Rescue Plan Act (ARPA) Subject Matter Workgroup presentation and consider providing further direction on Affordable Housing recovery project and program options.
SUMMARY:
At the direction of the Board, the County Administrator’s Office has been working with various Subject Matter Workgroups to bring forward project options under eligible categories of the American Rescue Plan Act (ARPA) Coronavirus State and Local Fiscal Recovery Funds for Board discussion and further direction. This presentation brings forward a package of seven programs and projects in the ARPA-eligible categories identified by the Board under the topic area of Affordable Housing recovery project options.
The Subject Matter Workgroup reviewed and discussed proposals that span different areas of affordable housing programs and projects that were provided to the County by a variety of organizations and included several from the Workgroup itself. Each of the proposals included in this presentation align with the 1-2-4 Framework presented by the Regional Impact Council and accepted by the Board on February 1, 2022. They also meet the highest levels of needs in the community as identified by the Solano County Human Services Needs Assessment.
In addition to the unsolicited proposals received, the Cities within the County were contacted to determine if there were any potential opportunities for partnerships on affordable housing projects that should be presented to the Board for consideration. Proposals were received from the Cities of Benicia, Fairfield, and Vallejo, and are included in either this Workgroup’s presentation or in the presentation of the Workgroup on Homelessness as appropriate. County proposals are based on the direct experience and knowledge of staff in the Workgroup.
FINANCIAL IMPACT:
The Subject Matter Workgroup considered and reviewed seven program and project options with an estimated cost of $16,790,000 if all were funded as outlined that the Board may wish to review and consider for funding under the ARPA allocation. The program and project options qualify under the ARPA U.S. Treasury spending categories of Negative Economic Impacts and Services to Disproportionately Impacted Communities. The Board previously affirmed these as eligible categories for the County and approved an initial allocation of ARPA funding into these two categories of $20 million, subject to future revision depending on Board direction. While the total of the programs and projects included in the Affordable Housing presentation may exceed the available allocation by the Board, the Workgroup wanted to ensure the Board is aware of program and project options available at this time.
The costs associated with preparing the agenda item are nominal and absorbed by the department’s FY2021/22 Adopted Budget. Any future allocation of funding for the project options presented by the Subject Matter Workgroup would be deducted from the Solano County ARPA allocation of $86,949,405. There is no impact to the General Fund.
DISCUSSION:
Background
Solano County received a direct federal funding allocation under the ARPA Coronavirus State and Local Fiscal Recovery Funds (SLFRF) program of $86,949,405. These funds are intended to provide support to the County in responding to the economic and public health impacts of COVID-19 and impacts on our communities, residents, and businesses. The Board previously received an overview on ARPA guidelines and approved eligible spending categories for potential allocation of funding in-line with the U.S. Treasury guidelines. The Board also provided several opportunities for public comment/input into the development of the ARPA Recovery Plan and agreed to receive Subject Matter Workgroup presentations to further explore funding options in consideration for determining the fund plan for ARPA SLFRF funds.
The County Administrator’s Office is working with many workgroups to bring forward to the Board Subject Matter Workgroup presentations addressing key ARPA categories for potential investment. This presentation brings forward a package of seven programs and projects for Board consideration for the topic area of Affordable Housing under the “Negative Economic Impacts” and “Services to Disproportionately Impacted Communities” categories within the ARPA framework. A full description of each proposal is in the attached Subject Matter Workgroup Report (Attachment A), including:
• Team members
• Existing studies/reports to support the concept for consideration
• Funding considerations
• Identified needs
• Project proposals
At a later date, the Subject Matter Workgroup focused on Homelessness will provide the Board with more information on unhoused individuals and families and the impact homelessness has on the county. Additional housing units for consideration for this population is one part of the necessary pieces of a solution; there are service and financial needs for this population as well. The Affordable Housing Workgroup has focused on securing and/or creating affordable housing units and solutions for long-term/ongoing housing for all lower-income households within Solano County, not just the unhoused, and for this reason recommendations for interim housing and permanent supportive housing and services are not included in this staff report or presentation.
Evaluation criteria were developed and utilized to assist the workgroup in ranking/prioritizing proposals received/reviewed (see Attachment B) for Board consideration. The criteria consist of six categories of questions that are designed to determine if a proposal meets ARPA requirements, and to assist the Workgroup team members in ranking/prioritizing them according to which concept/proposal a) appears most feasible, b) is likely to utilize allocated funding within the required timeframe, and c) assist the targeted populations and those most in need. Additionally, there are several proposals that did not appear to meet all ARPA criteria or did not appear feasible at this time; however, the Board may choose to have staff conduct further research into these proposals for potential funding.
Each proposal recommended for further review/consideration by the Workgroup will either provide new units of housing that would be affordable to lower-income households, would facilitate and/or lead to the creation of new units of housing that would be affordable to lower-income households, or would assist in preventing the loss of existing affordable housing. As noted above, the proposals align with the Regional Impact Council’s 1-2-4 Framework (<http://www.allhomeca.org/regionalactionplan/>) for the Bay Area counties recently endorsed by the Board on February 1 and meets the highest levels of needs in the community as identified by the Board’s June 11, 2019 Solano County Human Services Needs Assessment.
While County staff and team members are working on a long-term housing strategy for Board consideration to address housing challenges in the county, at this time there are a number of options the Board may wish to consider funding with ARPA SLFRF to alleviate a portion of the immediate housing need. It should be noted that the County received several unsolicited proposals related to housing, some of which will be included in the presentation by the Workgroup on Homelessness which will report to the Board on a later date in 2022. The funding options included in this Board item consist of both staff proposals as well as unsolicited proposals from external organizations focused on housing units that would be affordable. A few of the unsolicited proposals do not contain all the information that would be requested under a typical RFP and if selected by the Board for further consideration or potential funding, staff recommends the Board require the organization to submit a formal proposal. Additionally, in order to give the same consideration to housing providers and other organizations that may not have been aware that they could submit unsolicited proposals or were waiting for an official Request for Proposals (RFP) process, staff recommends that $3 million be allocated to establish a Housing Trust Fund at a later date that can be utilized to fund affordable housing by way of issuance of an RFP for additional projects. This is discussed in more detail in the Subject Matter Workgroup Report on Affordable Housing (Attachment A).
The Subject Matter Workgroup Report identifies and details a total of seven program and project options as follows:
1. Construction of a 166-unit apartment complex in Fairfield to provide affordable housing for very low- and low-income households. More information on the project is available in the Subject Matter Workgroup Report (Attachment A), and a copy of the design of the project is attached (Attachment C). This project aligns with the 1-2-4 framework by providing a permanent affordable housing resource. (One-time costs of $600,000 for gap financing)
2. Construction of three single-family homes in Fairfield to provide new homeownership opportunities for low-income households. More information on the project is available in the Subject Matter Workgroup Report (Attachment A), and a copy of the design of the project is attached (Attachment D). This project aligns with the 1-2-4 framework by providing a permanent affordable housing resource. (One-time costs of $215,000 for gap financing)
3. Modifications and subsidization of the County’s Accessory Dwelling Unit (ADUs) policies for the unincorporated area to facilitate an increase the number of ADUs constructed to be available to low-income households as rentals. More information on the project is available in the Subject Matter Workgroup Report (Attachment A). This project aligns with the 1-2-4 framework by providing an affordable housing resource. (Up to $1,725,000 in one-time costs for up to 30 ADUs over three years)
4. Establishment by Ordinance of a Solano County Housing Trust Fund to provide a local mechanism to fund the development of affordable housing, tailored to fit the unique needs and goals of the County. More information on the project is available in the Subject Matter Workgroup Report (Attachment A). This project aligns with the 1-2-4 framework by facilitating the provision of permanent affordable housing resources. (One-time cost of $3,000,000)
5. Contract for Housing Counseling services through a Request for Proposals to provide education and counseling related to tenant/landlord rights and responsibilities; homelessness prevention; pre-foreclosure assistance; and first-time homebuyer education for a two-year period to assist in stabilizing housing that was jeopardized as a result of the pandemic. More information on the project is available in the Subject Matter Workgroup Report (Attachment A). This project aligns with the 1-2-4 framework by providing a homelessness prevention resource and services that are not substantially available in the County. (One-time cost of $250,000 over two years)
6. Construction of a 67-unit apartment complex in Fairfield to provide affordable housing for extremely low- and very low-income households. More information on the project is available in the Subject Matter Workgroup Report (Attachment A) and a copy of the design of the project is attached (Attachment E). This project would align with the 1-2-4 framework by providing a permanent affordable housing resource. (One-time cost of $9,000,000 for gap financing)
7. Matching funds to offset the cost of critical infrastructure through the continuation of Solano Transportation Authority’s SubHIP program to support the creation of affordable housing development. More information on the project is available in the Subject Matter Workgroup Report (Attachment A) and a copy of the design of the Priority Development Areas is attached (Attachment F). This project would align with the 1-2-4 framework by facilitating the provision of permanent affordable housing resources.
Unsolicited proposals not recommended at this time
Two proposals are not recommended for further consideration at this time but are included for the Board’s information and consideration: 1) the Vallejo Community Land Trust (Attachment G) and 2) the Mosaic Predevelopment Fund (Attachment H). While these proposals initially appear to meet ARPA guidelines, they do not meet as many of the evaluation criteria as the proposals the Workgroup included in the higher ranked options. If the Board approves the concept of a Housing Trust Fund, these projects could submit complete proposals under an RFP at a later date.
ALTERNATIVES:
The Board could choose not to receive the presentation from the Subject Matter Workgroup on Affordable Housing recovery project options or provide further direction. However, this is not recommended as the presentation was prepared in accordance with Board direction to bring forward subject matter presentations to address impacts and the recovery from the COVID-19 pandemic, and Board direction will assist in ensuring the Board receives information necessary to determine the funding plan for ARPA funds including the authorization of specific projects.
Alternatively, the Board of Supervisors may:
1. Approve any of the identified project options for funding, and direct staff to return with the necessary action items to allocate ARPA funds to the specific Board-approved project, approve Appropriations Transfer Requests to establish the project budget, and take any other necessary action.
2. Direct staff to remove any or all project options presented from future consideration by the Board in determining ARPA funding allocations.
3. Direct the Subject Matter Workgroup to return with alternate project options or additional information on any of the project option presented.
OTHER AGENCY INVOLVEMENT:
The Affordable Housing Workgroup has worked with the County Administrator’s Office, the Department of Resource Management, and the organizations which submitted proposals for consideration.
CAO RECOMMENDATION:
APPROVE DEPARTMENTAL RECOMMENDATION