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Consider allocating funding from the Solano County Housing Trust Fund in the amounts of $400,000 for a loan to EAH Housing and $200,000 for a grant to Napa-Solano Habitat for Humanity; Consider deferring public facilities fees of $446,354 for EAH’s Tabor Commons development; and Authorize the County Administrator to execute all documents necessary to implement the Board’s direction, subject to County Counsel approval
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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:
1) Consider allocating funding from the Solano County Housing Trust Fund in the amounts of $400,000 for a loan to EAH Housing and $200,000 for a grant to Napa-Solano Habitat for Humanity;
2) Consider deferring public facilities fees of $446,354 for EAH’s Tabor Commons development; and
3) Authorize the County Administrator to execute all documents necessary to implement the Board’s direction, subject to County Counsel approval.
SUMMARY:
The Solano County Housing Trust Fund (SCHTF) is a tool through which Solano County can fund affordable housing projects through development and preservation, as well as programs. Established by the Board in 2022, the SCHTF receives an annual General Fund contribution of $200,000 through the Community Investment Fund and currently has an available balance of $400,000 with an additional $200,000 pending for FY2026/27.
The County has received two requests for assistance: one from EAH Housing for its Tabor Commons affordable housing development in Fairfield and one from Napa-Solano Habitat for Humanity (Habitat) for its Harmony Village development in Vacaville. Staff recommends a loan for EAH, a grant for Habitat, and deferral of County public facilities fees (PFFs) of approximately $446,354 for the Tabor Commons project.
FINANCIAL IMPACT:
Approval of the recommended allocations would fully commit the current $400,000 available balance and the FY2026/27 planned contribution of $200,000, leaving no uncommitted SCHTF funding until the FY2027/28 annual contribution. Approval of the deferral of the County’s PFFs is not anticipated to have an impact on the County’s General Fund if the Board approves staff recommendations to defer fees rather than waive them.
The costs associated with preparing the agenda item are nominal and absorbed by the department’s FY2026/27 Working Budget.
DISCUSSION:
Housing Trust Fund
The SCHTF was established by ordinance of the Board in August 2022 with the purpose of assisting in the creation of new affordable housing units and the preservation of existing affordable units.
State requirements for housing trust funds include a regular funding source. The Board approved the annual allocation for affordable housing of $200,000, formerly part of the Community Investment Fund, as its regular annual contribution to the SCHTF.
The current available balance in the SCHTF is $400,000, with an additional $200,000 pending for FY2026/27. Staff will return to the Board in late summer with a comprehensive report on the status of the SCHTF as required by SCHTF guidelines.
SCHTF guidelines adopted by the Board state that a Request for Proposals (RFP) or a Notice of Funding Availability (NOFA) may be issued at least once per funding cycle. The last RFP was issued in November 2023. Since then, the County has deferred issuing an RFP because of the relatively limited amount of funding currently available. Given the limited funding available, staff determined it would be more appropriate to bring forward projects with immediate funding needs rather than conduct a countywide solicitation. Per guidelines (Attachment C, Section 1, subsection D), “the Board may…allocate funds from the SCHTF for a specific project or program at any time.”
The City of Fairfield and EAH Housing have contacted the County several times related to the availability of an RFP or NOFA for which the Tabor Commons project could apply. Most recently, the City and the developer reached out again because of the urgent need to close the funding gap. If the funding gap cannot be closed, the developer would be required to decline its low-income housing tax credit allocation. The issuer, CDLAC/TCAC (California Debt Limit Allocation Committee/Tax Credit Allocation Committee), needs to be notified by the end of August.
Habitat has also contacted the County several times to determine the availability of funding for its Harmony Village project in Vacaville. Due to the County’s prior consideration of the Tabor Commons project, and its longstanding partnership with Habitat for Humanity on affordable housing projects, staff recommends the Board consider these requests (Attachments A and B) directly.
Habitat for Humanity
The County has partnered with Napa-Solano Habitat for Humanity on a number of projects, most recently on three single-family homes for low-income families in Fairfield, funded with American Rescue Plan Act (ARPA) funds as well as SCHTF funds for a total of $308,000.
Habitat for Humanity (Habitat) is developing Harmony Village, an infill project of 10 semi-detached duet homes of 1,554 square feet each, affordable to local, low-income (80% of Area Median Income (AMI) or less) families. The project is located on Scoggins Court in Vacaville. Selected families will be required to contribute 500 hours of sweat equity during construction and be able to make payments on an affordable loan, which will be no more than 30% of the family’s monthly gross income.
The anticipated cost of development is $5.7 million over the next four years. Habitat has already raised $2.1 million and has launched a capital campaign to raise funds from private donors. However, Habitat is seeking funding to install the underground wet and dry utilities and a public street to serve the homes as construction is anticipated to begin by the end of 2026.
Habitat has requested SCHTF assistance but has not requested a specific funding amount, allowing the Board discretion in determining an appropriate award.
Tabor Commons - EAH Housing, Developer
The Tabor Commons project was originally brought to the Board at its March 22, 2022, meeting. The original request was from the City of Fairfield for $9 million in ARPA funds to serve as gap financing. By revising their funding structure and increasing the amount of funding being sought under the Multi-Family Housing Program (MHP) application by the developer, the City lowered its gap financing need to $4.5 million, or 50% of their original request, and the Board heard this request on June 28, 2022. However, because the MHP application was still pending and funding was not guaranteed, and the request was a large percentage of the County’s total ARPA allocation (five percent), the Board elected not to provide funding to the project at that time.
Since the Board last considered the project in 2022, EAH Housing has revised both the financing structure and the proposed affordability mix to improve the project’s long-term financial feasibility. The original project included the units below based on the following percentages of area median income (AMI) for the Solano County area:
• 20 units for 20% of AMI
• 20 units for 30% of AMI
• 8 units for 40% of AMI
• 10 units for 50% of AMI
• 8 units for 60% of AMI
In order to ensure long-term viability of the project, the unit mix has been revised to the following:
• 41 units for 30% of AMI (17 one-bd; 22 two-bd; 2 three-bd; 16 of these units will be set aside for individuals with intellectual/developmental disabilities)
• 10 units for 60% of AMI (1 one-bd; 3 two-bd; 6 three-bd)
• 15 units for 70% of AMI (5 two-bd; 10 three-bd)
For reference, the current median income for a four-person household in Solano County is $124,600. The proposed project will provide units affordable to households earning between 30% and 70% of AMI.
Total costs for the project are projected at $46,398,768. Other funding sources include low-income housing tax credits, conventional debt financing, and financing from the City of Fairfield and other public funding sources. Due to an increase in costs since the original project, the project currently faces a funding gap of approximately $1.8 million.
The project will have 55-year regulatory agreements with the City of Fairfield and CDLAC/TCAC to preserve affordability.
Public Facilities Fees
Public facilities fees (PFFs) are collected under authority of State law to defray all, or a portion of, the cost of new public facilities needed as a result of the impact that new development (growth), both residential and commercial, has on County services. Typically, the fees fund libraries, parks, criminal justice facilities, and health and social services facilities, among others. The amount of fees and precisely how they are allocated are determined by a nexus study.
State law governing collection of fees was amended by Senate Bill (SB) 937, effective January 1, 2025, which generally requires qualifying residential developments to pay applicable development impact fees at certificate of occupancy rather than at building permit issuance. The developer is requesting that the County waive or defer its public facilities fees. Staff is recommending fee deferral consistent SB 937.
The County has never waived fees but has deferred PFFs at least once before in 2020 for MidPen’s Fair Haven Commons development in Fairfield. Under the MidPen deferral, PFFs became due upon the closing of the project’s permanent loan or within 30 months of the issuance of the building permit, whichever came first.
Tabor Commons - EAH Housing, Developer
EAH Housing is seeking two forms of assistance from the County for the Tabor Commons project. The first is cash funding from the SCHTF detailed above. The second is a waiver or deferral of the County’s public facilities fees totaling an estimated $446,354, or, if neither is feasible, conversion of the fees to a residual receipts loan with simple interest of 3%.
The requested SCHTF assistance and PFF deferral are consistent with the financial assistance being provided by the City of Fairfield to support project feasibility, as follows:
1. $1 million in fee credits (this amount may increase depending on the results of agreements with other entities)
2. $1,150,000 in HOME program loan
3. $850,000 loan from the City of Fairfield Housing Trust Fund
4. $636,083 in Community Development Block Grant (CDBG) loan
5. 25 Project-Based Vouchers from the Fairfield Housing Authority
Staff recommends allocating the current available SCHTF balance to the Tabor Commons project because the project is actively assembling its financing package and has identified an immediate funding need and will produce a greater number of affordable housing units. Staff further recommends allocating the FY2026/27 annual contribution to Habitat for Humanity to support the Harmony Village project as construction advances. The recommended loan and grant structures reflect the differing financing needs and development models of the two projects. To summarize, staff recommends the Board:
1. Allocate the full available balance of $400,000 to EAH Housing for the Tabor Commons project in the form of a loan with simple interest of 3%, with payments deferred until Year Seven.
2. Allocate the FY2026/27 pending allocation of $200,000 to Habitat for Humanity for the Harmony Village project in the form of a grant with performance requirements.
3. Defer public facilities fees of approximately $446,354 for Tabor Commons until issuance of the first certificate of occupancy, consistent with SB 937, or within five years of the issuance of the building permit, whichever occurs first. Consistent with SB 937, the applicable fee rates would be frozen as of the building permit issuance date.
ALTERNATIVES:
The Board could elect:
1. Not to award some or all of the available and pending funding at this time, and/or not to defer the public facilities fees; however, this is not recommended as both of these projects will increase the number of affordable housing units in Solano County, including some dedicated for individuals with developmental disabilities, which is one of the Board’s stated priorities; OR
2. Convert the value of the PFFs to a residual receipts loan with a 3% simple interest rate as per the developer’s request.
OTHER AGENCY INVOLVEMENT:
The City of Fairfield’s Housing Services Department collaborated on the Tabor Commons item.
CAO RECOMMENDATION:
APPROVE DEPARTMENTAL RECOMMENDATION