HomeMy WebLinkAbout2023-05-16; City Council; ; State of California Local Housing Trust Fund ApplicationCA Review __RK__
Meeting Date:
To:
From:
Staff Contact:
Subject:
District:
May 16, 2023
Mayor and City Council
Scott Chadwick, City Manager
Nicole Piano-Jones, Senior Program Manager
nicole.pianojones@carlsbadca.gov, 442-339-2191
State of California Local Housing Trust Fund Application
1, 2 and 3
Recommended Action
Adopt a resolution authorizing the submittal of a Local Housing Trust Fund funding application
to the State of California Department of Housing and Community Development in the amount
of $1,770,000.
Executive Summary
The state Department of Housing and Community Development has announced that
approximately $53 million in Local Housing Trust Fund matching funds is available to eligible
applicants for the creation of affordable housing and homeless shelters. The City of Carlsbad is
eligible based on several affordable housing and emergency shelter projects that have received,
or are being considered for, local funding investments from our city Housing Trust Fund.
For the city to receive these funds, state guidelines require the City Council to consider the
city’s application and adopt a resolution authorizing the list of eligible projects being requested.
Applications are due May 17, 2023.
Explanation & Analysis
Background
The Local Housing Trust Fund program was established in 2018 through the Veterans and
Affordable Housing Bond Act (Proposition 1). Its objective is to expand sources of funding for
housing and to expand the supply of affordable housing through the support of Local Housing
Trust Fund grants.
State matching funds can be used to provide loans to pay for:
Construction or rehabilitation of affordable rental housing developments
•Emergency shelters
•Permanent supportive housing
•Transitional housing
•Affordable homebuyer/homeowner projects
May 16, 2023 Item #10 Page 1 of 8
Based on the program guidelines and scoring criteria, city staff have identified a list of eligible
projects and matching fund requests that would likely put the city’s application in the
competitive range. The list of projects is included as Attachment A to Exhibit 1.
If it is awarded, the state grant would be a great leveraging opportunity for additional funding
to financially support affordable housing and emergency shelter projects in Carlsbad. The
eligible projects would receive additional funding from the State and any funds from the
repayment of the loans would go to the local Housing Trust Fund for future use.
Carlsbad Housing Trust Fund
The city has an Inclusionary Housing Ordinance that requires all residential development
projects greater than six units to restrict 15 percent of the total number of units as affordable
to low-income households. Some developments, based on size, have the option to satisfy their
affordable housing obligation through payment of inclusionary housing in-lieu fees or
affordable housing credit purchases. The city established the City of Carlsbad Housing Trust
Fund to receive and confirm that fees collected were applied only towards the affordable
housing needs of lower-income households.
The Housing Trust Fund receives revenue from a variety of sources, including interest from
loans, loan repayments, housing credit purchases, housing in-lieu fees, housing impact fees,
and interest earned on the fund balance. The fund is intended to aid in the production,
acquisition, rehabilitation and preservation of housing affordable to extremely low-, very low-
and low-income households, and those experiencing homelessness.
The Housing Trust Fund has been an indispensable tool to attract other funding sources to
affordable housing projects, leveraging the city’s investment up to five times with outside
funding sources. If awarded, this matching grant would provide additional revenue to
affordable housing and emergency shelter projects in Carlsbad from State funds and will help
grow the future fund balance of the city’s Housing Trust Fund since loan repayments of the
state funds would go into to the city’s Housing Trust Fund.
Eligible projects
The City Council has already approved or is considering Housing Trust Fund investments for a
number of projects that provide affordable housing or emergency shelter beds. The affordable
housing and emergency shelter projects are either under construction or are expected to begin
construction within two years. The city’s Housing Trust Fund investment is not enough to close
the funding gap for these projects. Projects that started over the last year have experienced
unprecedented increases in construction costs, utility operating costs and interest rates,
reducing the amount of permanent financing available to cover the higher development costs.
Based on projected costs and revenue, the affordable housing and emergency shelter projects
included in the table below would benefit from additional funding support. The city is able to
apply for matching grants to provide additional funding support for these projects based on the
already or the anticipated city Housing Trust Fund commitments to be provided. The state
funding application amounts identified for each project are based on using the grant funding
scoring criteria and trying to maximize the chances of receiving an award of grant funds.
If received, the state funds would be provided to the city to distribute to the eligible projects.
The city would be required to issue the awarded funds as loans recorded against the property.
May 16, 2023 Item #10 Page 2 of 8
Multifamily rental projects are required to have a recorded regulatory agreement setting forth
the requirements for household income levels and rent restrictions for not less than 55 years
for all units assisted with the funding. For emergency shelter projects, the loan may be
forgivable upon satisfaction of the 15-year minimum regulatory period.
Project name Project description
Carlsbad
Housing Trust
Fund award
State Local
Housing Trust
Fund request
Aviara Apartments Affordable housing – 70 units at
30-60% of area median income $3,100,0001 $300,000
Marja Acres Affordable senior housing – 47
units 30-60% of AMI $715,0001 $260,000
West Oaks Affordable Housing – 42 units at
30-60% of AMI $1,500,0001 $150,000
La Posada Shelter Emergency shelter expansion $1,470,6212 $1,050,000
Administration $10,000
Project total $6,785,621 $1,770,000
1 Housing Trust Fund award already approved by City Council
2 Funding recommended on another item on this City Council meeting agenda
Aviara Apartments
Aviara East Apartments is a 70-unit, 100% affordable housing project on Aviara Parkway south
of Palomar Airport Road and north of Laurel Tree Lane being developed by BRIDGE Housing.
The overall Aviara Apartment project is required to provide 79 units affordable to lower-income
households. The City Council approved a $3.1 million loan from the city’s Housing Trust Fund on
Aug. 31, 2021, to increase the affordability of seven of the 70 units to serve very low-income
households. We are requesting $275,000 in state funds to match the $3.1 million the city has
already contributed to the project. Additional funding from the state could narrow the funding
gap that has increased since the $3.1 million loan was awarded due to the increases in costs
listed above. The project is under construction and anticipated to be complete in 2024.
Marja Acres Senior Apartments
The Marja Acres Apartments project is a 47-unit, 100% affordable senior housing project on the
west side of El Camino Real, just south of Kelly Drive, that is being developed by USA Properties.
As an approved density bonus project, Marja Acres is required to provide 46 senior apartments
affordable to lower-income seniors.1 The City Council approved a total of $715,000 in loans
from the city’s Housing Trust Fund, on Oct. 12, 2021, and Oct. 11, 2022, to deepen the
affordability of five of the units to people with extremely low-income levels. We are requesting
$275,000 in state funds to match the $715,000 from the Housing Trust Fund that the city has
already contributed to the project. Additional funding from the state could also narrow the
1 Government Code Section 65915, the state density bonus law, allows a developer to increase the density on a
property above the maximum limit set by a city’s local general plan in exchange for reserving a certain number of
the new dwelling units as affordable or other qualifying housing for at least 55 years.
May 16, 2023 Item #10 Page 3 of 8
funding gap that has increased due to the increases in costs listed above. The project is
currently under construction and anticipated to be complete in 2024.
West Oaks Apartments
West Oaks Apartments is a 42-unit affordable housing project located south of Palomar Airport
Road and west of Palomar Oaks Way. It is being developed by Chelsea Investment Corporation.
As an approved density bonus project, Integral Communities is required to provide 42 units
affordable to lower-income households. The City Council approved a $1.5 million loan from the
city’s Housing Trust Fund on Dec. 7, 2021, to deepen the affordability of ten units to serve
extremely low and very low-income households. We are requesting $175,000 in state funds to
match the $1.5 million from the Housing Trust Fund that the city has already contributed to the
project. Additional funding from the state could also narrow the funding gap for this project,
which has also increased since the loan was awarded due to the increased costs. The project is
anticipated to start construction in 2024.
La Posada Shelter
La Posada is the city’s only homeless shelter and is operated by Catholic Charities. It currently
provides 100 beds, of which 50 are reserved for farmworkers. On Sept. 28, 2021, the City
Council expressed support for Catholic Charities to expand the capacity of the La Posada shelter
to serve more individuals experiencing homelessness, including space for women and families.
The city contributed $183,000 in federal Community Development Block Grant funds toward
pre-development expenses related to the expansion. An architect is now under contract and
has started initial feasibility and cost estimate studies. The total project cost is currently
estimated at $9 to $10 million, depending on whether it includes a third story to provide more
bed space to serve more individuals. The project is anticipated to start construction in 2024 if
enough capital for construction can be raised by Catholic Charities.
City staff have been actively seeking outside funding alternatives to reduce the amount of
capital needed so that project construction can start. The City Council approved documents at
the Feb. 7, 2023, City Council meeting to accept $2 million in funds from the County of San
Diego and, in turn, grant the funds to Catholic Charities toward the expansion. In another action
being considered on this same City Council agenda, the City Council is being asked to contribute
$729,379 in state Permanent Local Housing Allocation funds and $1,470,621 from the city’s
Housing Trust Fund towards the project.
If the City Council votes to provide the $1,470,621 from the city’s Housing Trust Fund to La
Posada, the project can be included in the list of eligible projects in the matching grant
application to the state. We would be requesting $1,050,000 in state funds to match the $1.4
million in funding the city is considering contributing from its Housing Trust Fund toward the
project. The matching funds requested from the state are dependent on the contribution from
the city’s Housing Trust Fund.
Fiscal Analysis
There is no fiscal impact to the General Fund associated with the recommended action.
Additional funding for these projects is contingent on the expenditure of city matching funds
and the successful award of program funds from the Department of Housing and Community
Development. If the state Local Housing Trust Fund program funds of $1.77 million are
May 16, 2023 Item #10 Page 4 of 8
awarded, the city would receive the funding to provide additional financial assistance to eligible
projects. If the state does not award this funding, the city is not obligated to provide additional
local funding for these projects.
If awarded, the funds are required to be provided to eligible projects as a loan recorded against
the property. Any loan repayments of the state funds would go into to the city’s Housing Trust
Fund to be used for the purposes set forth in state guidelines, providing future revenue to the
Carlsbad Housing Trust Fund.
Options
Staff provide the following options for the City Council’s consideration:
1.Authorize the application for the Local Housing Trust Fund matching funds for projects
as presented
Pros
•Provides additional funding to affordable housing projects in Carlsbad and the La
Posada Emergency Shelter expansion project
Cons
•None identified
2.Do not authorize the application for the Local Housing Trust Fund matching funds for
projects as presented
Pros
•None identified.
Cons
•The city will not be considered for Local Housing Trust Fund matching funds for
projects in Carlsbad
Staff recommend the City Council select Option 1.
Next Steps
With the City Council’s approval, staff will submit the application for the grant. The
announcements of awards is expected by August 2023. If the city is awarded a grant, staff
would then execute the loan agreements for the identified projects.
Environmental Evaluation
This action does not constitute a project as defined under the California Environmental Quality
Act in accordance with Public Resources Code Section 21065, in that these actions may not
cause a direct physical change in the environment or a reasonably foreseeable indirect physical
change in the environment.
Exhibits
1.City Council resolution
May 16, 2023 Item #10 Page 5 of 8
RESOLUTION NO. 2023-133
A RESOLUTION OF THE CITY COUNCIL OF THE CITY OF CARLSBAD,
CALIFORNIA, AUTHORIZING THE SUBMITTAL OF A LOCAL HOUSING TRUST
FUND APPLICATION TO THE STATE OF CALIFORNIA DEPARTMENT OF
HOUSING AND COMMUNITY DEVELOPMENT IN THE AMOUNT OF
$1,770,000
WHEREAS, the State of California (the "State"), Department of Housing and Community
Development is authorized to provide up to $53 million under the Local Housing Trust Fund ("LHTF")
Program from the Veterans and Affordable Housing Bond Act of 2018 (Proposition 1) (as described in
Health and Safety Code section 50842.2 et seq. (Chapter 365, Statutes of 2017 (SB 3)) ("Program"); and
WHEREAS, the State Department of Housing and Community Development ("Department")
issued a Notice of Funding Availability ("NOFA") dated March 7, 2023, under the LHTF Program; and
WHEREAS, the City of Carlsbad is an eligible Local or Regional Housing Trust Fund applying to
the Program to administer one or more eligible activities using Program Funds; and
WHEREAS, the Department may approve funding allocations for the LHTF Program, subject to
the terms and conditions of H&S Code Section 50842.2, the LHTF Program Guidelines, NOFA, Program
requirements, the Standard Agreement and other related contracts between the Department and LHTF
award recipients.
NOW, THEREFORE, BE IT RESOLVED by the City Council of the City of Carlsbad, California, as
follows:
1.That the above recitations are true and correct.
2.If the City of Carlsbad receives an award of LHTF funds from the Department pursuant
to the above referenced LHTF NOFA, it represents and certifies that it will use all such
funds on Eligible Projects 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 LHTF Program, as well as any and all contracts Applicant
may have with the Department ("Eligible Project").
3.That the City Manager, or designee, is hereby authorized to act as the manager in
connection with the Department's funds to Eligible Projects pursuant to the above
described Notice of Funding Availability in an amount not to exceed $1,770,000 (the
"LHTF Award").
Exhibit 1
May 16, 2023 Item #10 Page 6 of 8
4.The City of Carlsbad hereby agrees to match on a dollar-for-dollar basis the LHTF Award
pursuant to Guidelines Section 104. Applicant hereby agrees to utilize matching funds
on a dollar-for-dollar basis for the same Eligible Projects for which Program Funds are
used, as required by HSC Section 50843.5{c), and are included as Attachment A.
5.Pursuant to Attachment A (List of Eligible Projects) and the City of Carlsbad's certification
in this resolution, the LHTF funds will be expended only for Eligible Projects and
consistent with all program requirements.
6.The City of Carlsbad shall be subject to the terms and conditions as specified in the
Standard Agreement, H&S Section 50842.2 and LHTF Program Guidelines.
7.The City Manager, or designee, is authorized to execute the LHTF Program Application,
the LHTF Standard Agreement and any subsequent amendments or modifications
thereto, as well as any other documents which are related to the Program or the LHTF
Award to Applicant, as the Department may deem appropriate.
PASSED, APPROVED AND ADOPTED at a Regular Meeting of the City Council of the City of
Carlsbad on the 16th day of May, 2023, by the following vote, to wit:
AYES:
NAYS:
ABSTAIN:
ABSENT:
Blackburn, Bhat-Patel, Acosta, Burkholder, Luna.
None.
None.
None.
KEITH BLACKBURN, Mayor
j?tNY �HERRY FREISINGER, City Clerk
{SEAL)
May 16, 2023 Item #10 Page 7 of 8
Attachment A
STATE LOCAL HOUSING TRUST FUND GRANT
ELIGIBLE PROJECT LIST
Project name Project description
Carlsbad
Housing Trust
Fund award
State Local
Housing Trust
Fund request
Aviara Apartments Affordable housing – 70 units at
30-60% of area median income $3,100,000 $300,000
Marja Acres Affordable senior housing – 47
units 30-60% of AMI $715,000 $260,000
West Oaks Affordable Housing – 42 units at
30-60% of AMI $1,500,000 $150,000
La Posada Shelter Emergency shelter expansion $1,470,621 $1,050,000
Administration $10,000
Project total $6,785,621 $1,770,000
May 16, 2023 Item #10 Page 8 of 8
AFFIDAVIT OF MAILING .
NOTICiE OF PUBLIC UfiARING ~ / ~~
TO: CITY CLERK
DATE OF PUBUC~-: .s:!tlf)L7.P::)_3.
s u sJ m, Ha JJ::i • o/J +-C..cs-co . C\R ,i 1.rx::,, J) IdM .c., ~ tL,..d, J
LOCATION: CQi:200 Carlsbad Village Drive, Carlsbad, CA 92008 ~°If>-
□ Other: ------------------
DATE POSTED TO CITY WEBSITE sl,,J:).p~
DATE NOTICES MAILED TO PROPERTY OWNERS: -----------
NUMBER MAILED:
I declare under penalty of perjury under the laws.of the State of California that I am employed by
the City of Carlsbad and the foregoing is true and correct.
DEPARTMENT: ~TY CLERK'S OFFICE □OTHER _______ _
' j , xY1.:2r2, ~/)
Signature Date
SENT TO FOR PUBLICATION VIA E-MAIL TO: □ Union Tribune on ___ _
~ Coast News on· ;;;/>?~
PUBLICATION DATE: Union Tribune _____________ _
Coast New s s/; d lc7o~
I declare under penalty of perjury under the laws of the State of California that I am employed by
the City of Carlsbad and the foregoing is true and correct.
DEPARTMENT: ~ CLERK'S OFFICE □ OTHER _______ _
Jm~
Signature Date
Attachments: 1) Mai ling Labels
2) Notice w/ attachments
NOTICE OF PUBLIC REVIEW AND
PUBLIC MEETING
NOTICE IS HEREBY GIVEN, that the City Council of the City of Carlsbad will hold a public meeting
at the Council Chamber located at 1200 Carlsbad Village Drive, Carlsbad, California on Tuesday,
May 16, 2023, at 5 p.m., for the State of California Housing & Community Development
Department Local Housing Trust Fund Application.
The Local Housing Trust Fund program was established in 2018 through the voter approved
Proposition 1 Veterans and Affordable Housing Bond Act. The program objective is to expand
sources of funding for housing, and to expand the supply of affordable housing through the
support of Local Housing Trust Funds. State matching grant funds can be used to provide loans
to pay for construction or rehabilitation of affordable rental housing developments, emergency
shelters, permanent supportive housing, transitional housing and affordable
homebuyer/homeowner projects. On March 7, 2023, the State Department of Housing and
Community Development released a Notice of Funding Availability for approximately $53 million
in competitive Local Housing Trust Fund dollars. The City of Carl sbad is pursuing the Local Housing
Trust Fund program to obtain needed funding for eligible affordable housing projects previously
funded by the City of Carlsbad's Housing Trust Fund. A summary of those projects may be viewed
on the City's website: https://www.carlsbadca.gov/departments/housing-homeless-
services/affordable-housing.
Those persons wishing to speak on this item are cordially invited to attend the public meeting. In
addition, written comments may be submitted to the City Council at or prior to the meeting via
U.S. Mail to the attention of the City Clerk, 1200 Carlsbad Village Drive, Carlsbad, CA 92008, or
via email to clerk@carlsbadca.gov. Copies of the staff report will be available by Friday, M ay 12,
2023, on the city's website: https://www.carlsbadca.gov/city-hall/meetings-agendas. The
meeting can be viewed on line at https://www.carlsbadca.gov/residents/communication/city-tv-
channel or on the city's cable channel.
For questions or more information, please contact Housing & Homeless Services Department
Program M anager Nicole Piano-Jones at (442) 339-2191 or nicole.pianojones@carlsbadca.gov.
PUBLISH: FRIDAY, MAY 12, 2023
CITY OF CARLSBAD
CITY COUNCIL
LOCAL HOUSING TRUST FUND
APPLICATION
Nicole Piano-Jones, Senior Program Manager
Housing & Homeless Services
May 16, 2023
{city of
Carlsbad
OVERVIEW
•Proposition 1 –Veteran and Affordable Housing Bond Act
•Administered by State of California, Housing &
Community Development
•Publish guidelines, notice of funding availability
•March 2023 -$53 million competitive funds
•Program matches local housing investments for
creation of affordable housing & shelter
ITEM 10: LTHF APPLICATION
{city of
Carlsbad
•Eligible Applicant
•Established Housing Trust Fund
•Housing Element Compliance
•Eligible Projects
•Affordable rental housing
•Emergency Shelters
•City Council Resolution
PROGAM REQUIREMENTS
ITEM 10: LHTF APPLICATION
{city of
Carlsbad
Project name Project description Carlsbad HTF
award
State LHTF
request
Aviara
Apartments 70 units 30-60% AMI $3,100,000 $300,000
Marja Acres 47 units 30-60% AMI $715,000 $260,000
West Oaks 42 units 30-60% AMI $1,500,000 $150,000
La Posada 45-99 additional shelter
beds $1,470,621* $1,050,000
Administration $10,000
Totals 159 affordable rentals &
45-99 shelter beds $6,785,621 $1,770,000
* Pending City Council approval -being considered Item #9 on tonight’s City Council Agenda
NEXT STEPS
SUBMIT APPLICATION
(MAY) &
AWARD ANNOUNCEMENT
(AUG)
ADMINISTRATION CITY COUNCIL
RESOLUTION
ITEM 10: LHTF APPLICATION
EXECUTE PROJECT
DOCUMENTS
))) 0
ITEM 10: LHTF APPLICATION
Adopt a resolution authorizing the submittal of the Local
Housing Trust Fund funding application to the State of
California Department of Housing and Community
Development in the amount of $1,770,000
RECOMMENDATION
{city of
Carlsbad
Questions
{city of
Carlsbad