The State issued Permanent Local Housing Allocation Final Guidelines ("PLHA Program Guidelines") in October 2019 and issued a Notice of Funding Availability ("NOFA") dated August 17, 2022 (Attachment 2) under the Permanent Local Housing Allocation ("PLHA") Formula Component.

 

The City of Carmel-by-the-Sea is eligible to receive up to $491,704 in funds disbursed over a five-year period from 2019 to 2023. The staggering lack of affordable housing in the City necessitates the pursuit of all available resources; PLHA funds offer a prime opportunity to preserve the City’s limited existing affordable housing units and advance the effort to create new affordable housing.

As described in the PLHA Final Guidelines (Attachment 3), eligible activities are limited to one or more of the following: 

1.       The predevelopment, development, acquisition, rehabilitation, and preservation of multifamily, residential live-work, or rental housing that is Affordable to Extremely Low-, Very-low-, Low-, or Moderate-income households (up to 120 percent of Area Median Income (AMI), or 150 percent of AMI in High-cost areas, including necessary operating subsidies).

2.       The predevelopment, development, acquisition, rehabilitation, and preservation of Affordable rental and ownership housing, including Accessory Dwelling 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.

3.       Matching portions of funds placed into Local or Regional Housing Trust Funds.

4.       Matching portions of funds available through the Low- and Moderate-Income Housing Asset Fund pursuant to subdivision (d) of HSC Section 34176.

5.       Capitalized Reserves for Services connected to the preservation and creation of new Permanent supportive housing up to 30 percent of AMI).

6.       Assisting persons who are experiencing or at risk of homelessness, including, but not limited to, providing rapid rehousing, rental assistance with a term of at least six months, 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.

a)       This Activity may include subawards to Administrative Entities as defined in HSC Section 50480(a)(1-3) that were awarded California Emergency Solutions and Housing (CESH) program or Homeless Emergency Aid Program (HEAP) funds for rental assistance to continue assistance to these households.

b)      Applicants must provide rapid rehousing, rental assistance, navigation centers, emergency shelter, and transitional housing activities in a manner consistent with the Housing First practices described in 25 CCR, Section 8409, subdivision (b)(1)-(6) and in compliance with WIC Section 8255(b)(8). An Applicant allocated funds for the new construction, rehabilitation, and preservation of Permanent supportive housing shall incorporate the core components of Housing First, as provided in WIC Section 8255, subdivision (b).

7.       Accessibility modifications in Lower-income Owner-occupied housing (up to 80 percent of AMI).

8.       Efforts to acquire and rehabilitate foreclosed or vacant homes and apartments (up to 120 percent of AMI or 150 percent of AMI in High-cost areas).

9.       Homeownership opportunities, including, but not limited to, down payment assistance to those earning up to 120 percent of AMI or 150 percent of AMI in High-cost areas.

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 or greater investment in the Project. The county fiscal incentives shall be in the form of a grant of 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 up to 120 percent of AMI or 150 percent of AMI in High-cost areas.

 

Twenty percent of the monies in the Fund are required by statute to be expended for Affordable Owner Occupied Workforce Housing (AOWH). 

 

Section 300(c) of the PLHA Program Guidelines allows a local government to delegate another local government to submit an application and administer on its behalf its formula allocation of Program funds, provided that the local governments enter into a legally binding agreement and the funds are expended for eligible activities consistent with Program requirements. Due to the resources required to apply, manage, and administer the Program funds, the City of Carmel-by-the-Sea has opted to partner with the County of Monterey to ensure submission of a successful application; receipt of Program funds; and targeted administration of funds towards eligible, impactful activities. The County’s Housing and Community Development Department has the necessary staff capacity to navigate the application process and manage grant implementation.   

 

The proposed County partnership guarantees that State PHLA funds will be allocated to the Monterey region and directed to Carmel-by-the-Sea. Presently, the City does not have a project that would meet the eligible activity criteria. An individual application - independent from the County - could jeopardize receipt of PLHA funds. This is the last year for applicants to apply for 2019 calendar year allocations; the deadline is October 31st, 2022. Any 2019 calendar year funds remaining after the close of the NOFA application period will revert to the State’s Housing Rehabilitation Loan Fund and may not directly benefit our region. The County has shovel-ready projects that qualify as eligible activities.  

 

As such, staff is requesting City Council approval to authorize the County of Monterey to submit an application on behalf of Carmel-by-the-Sea. A draft agreement between the County of Monterey and the City of Carmel-by-the-Sea for joint participation in the Permanent Local Housing Allocation funding program for fiscal years 2019-2023 is included as Attachment 4. Staff is also requesting Council approval to delegate administration of the program to the County of Monterey. The County has agreed to act as the Applicant to the State has agreed to administer the receipt of formula allocation program funds on behalf of the City and County, using the County of Monterey 5-Year PHLA Plan (Attachment 5). Carmel-by-the-Sea will meet with the County on a quarterly basis to identify, develop, and fund potential projects within the City limits.

 

ENVIRONMENTAL REVIEW: 

In accordance with the California Environmental Quality Act (California Public Resources Code §§ 21000, et seq., "CEQA"), together with State Guidelines (14 California Code Regulations §§ 15000, et seq., the "CEQA Guidelines") and City Environmental Regulations (CMC 17.60), authorizing the County of Monterey to submit an application on behalf of the City of Carmel-by-the-Sea for the Permanent Local Housing Allocation (PLHA) Program, adopting the County of Monterey’s 5-Year Plan, authorizing the execution of an agreement with the County of Monterey for joint participation in the PLHA funding program for fiscal years 2019-2023 and delegating to the County of Monterey administration of the PLHA program on behalf of the City of Carmel-by-the-Sea is not considered a project requiring compliance with the California Environmental Quality Act (Section 21065 of the California Public Resources Code).