To: Honorable Mayor and Members of City Council
From: Vincent Smith, Community Development Director
Prepared By: Lark Ferrell, Housing Manager and Andrea Clark, Affordable Housing Representative
TITLE:
Title
HOME Funds for Tenant Based Rental Assistance
LABEL
RECOMMENDED ACTION:
Recommendation
(1) Adopt a resolution authorizing the Community Development Director to submit an amended 2018 application to the California State Department of Housing and Community Development for a grant of up to $1,000,000 under the HOME Investment Partnership Program and to execute all documents necessary to accept the grant and approving the increase in both revenue and expenditure budgets in the HOME Fund by $1,000,000 as documented in Budget Adjustment No. BE2004503; and (2) adopt a resolution authorizing the use of HOME Program Income to be used for Tenant Based Rental Assistance and approving Tenant Based Rental Assistance Program Guidelines.
Body
DISCUSSION:
The City has received grants through the California Department of Housing and Community Development (“HCD”) under the HOME Investment Partnership Program (“HOME”) from the U.S. Department of Housing and Urban Development (“HUD”). These grants have primarily been used to fund City’s first time homebuyer down payment assistance program. In June 2018, HCD issued a Notice of Funding Availability (NOFA) under the HOME Program. In response to the NOFA, the City applied for, and in February 2019 was awarded, $1,000,000 in first time homebuyer funding. However, to date, HCD has not yet issued a Standard Agreement for the grant.
In addition to receiving HOME funds through new grants, the City also receives HOME program income when borrowers repay their first time homebuyer loans. Currently, the City has approximately $1,000,000 in uncommitted HOME Program Income.
Economists estimate 1.5 million American households could be at-risk of becoming homeless as a result of the COVID-19 disaster. Locally, Napa Valley Community Organizations Active in Disaster (COAD) reports that, as of early April, over 2,600 households have contacted COAD seeking food and financial assistance, including rental assistance. COAD reports the need for assistance far outweighs existing resources. Because of the overwhelming immediate need for rental assistance and tenant based rental assistance (TBRA) is also an eligible activity under the HOME Program, Housing Division staff reached out to HCD in order to use the City’s HOME program income to establish a TBRA program. In recognition of the significant and urgent need for rental assistance as a result of the COVID-19 disaster, HCD staff was not only receptive to the City’s request, but also informed the City that all 2018 HOME grant awardees are being given the unique opportunity to amend their 2018 grant applications to add TBRA as an activity.
Approval of the recommended actions would provide at least $1,400,000 in funding for TBRA in Napa. Staff estimates $1,400,000 would help approximately 58 low-income renters to stay in their units. Dependent both on demand for TBRA as well as the amount of future HOME program income received, this amount may be increased (by deploying additional HOME funding from the first time homebuyer program to TBRA). Staff will closely monitor this and provide Council with an update after the program is launched.
Under TBRA program requirements, participants must have household income of 60% or less of area median income; the State has not yet adopted new income limits for 2020, so the current 2019 income limit for a household of four is $60,240. The program would provide participants with rent subsidies based on participants paying 30% of their incomes for rent for units with rents at or below 110% of Fair Market Rent (FMR). Currently, 110% of FMR by bedroom size is:
|
Unit Size |
110% of Fair Market Rent |
|
Studio |
$1,347 |
|
1-bedroom |
$1,569 |
|
2-bedroom |
$2,068 |
|
3-bedroom |
$2,983 |
|
4-bedroom |
$3,083 |
Although the TBRA rent subsidy is capped based on 110% of FMR, if households are already renting units with higher rents, they can still be assisted provided that, after applying the subsidy, they would not be paying over 50% of their income for housing. Space rent on mobile homes is also eligible under the program. The term of the rental assistance would be for up to one year.
Under the City’s proposed program, preference would be given to households who can lease-in-place (i.e., households who are currently leasing a unit pursuant to a rental agreement) and have had a reduction of 30% or more of their total household income as a result of a pandemic. All assisted participants and units must meet HOME requirements as described in the attached TBRA Program Guidelines.
Housing Division staff is also working with the Town of Yountville to establish a similar TBRA program funded with a portion of Yountville’s 2018 HOME grant. The other jurisdictions in Napa County do not have 2018 HOME grant awards and do not have HOME program income on hand.
In order to help ensure impacted tenants are aware of this new program, staff will work with local property managers, non-profits, and COAD to help spread the word. In order to safely and more fairly serve applicants, staff intends to hold a lottery to establish a program waiting list similar to how the Section 8 Housing Choice Voucher Program waiting list operates. Households who need assistance with their applications should be able to receive help from Housing staff and other community partners by phone and online.
In order to launch a HOME-funded TBRA program targeted to assist renters who have been economically impacted by the federally-declared COVID-19 disaster and who can lease in place, staff recommends Council authorize amending the City’s 2018 HOME application to include TBRA and approving a budget adjustment for the grant award. Staff also recommends Council authorize the use of local HOME program income for TBRA and approve TBRA program guidelines. These actions would allow staff to expeditiously launch the TBRA program in order to provide urgently needed rental assistance to Napa renters who have been economically impacted by the COVID-19 disaster.
FINANCIAL IMPACTS:
There are no impacts to the General Fund by the recommended action. Accepting the grant necessitates Budget Adjustment BE2004503 to increase revenues and expenses, each by $1,000,000, in the HOME Program fund (23301).
CEQA:
The Community Development Director has determined the Recommended Action described in this Agenda Report is not subject to CEQA, pursuant to CEQA Guidelines Section 15060(c).
DOCUMENTS ATTACHED:
ATCH 1 - Resolution - Approving HOME grant amendment and Budget Adjustment
EX A - Budget Adjustment No. BE2004503
ATCH 2 - Resolution - Authorizing HOME Program Income for TBRA & approving Guidelines
EX A - TBRA Program Guidelines
NOTIFICATION:
Members of the Community Organizations Activated in Disaster (COAD) and the Napa Continuum of Care (COC) were notified about this agenda item.