The proposed Substantial Amendment to the Action Plan will have no General Fund impact. Neighborhood Stabilization Program (NSP) funds are provided to the County on a formula allocation basis through the U.S. Department of Housing and Urban Development (HUD). The Neighborhood Stabilization Program uses the Community Development Block Grant (CDBG) Program CFDA number – 14.218

On April 28, 2010, the Board approved the County’s FY 2010/11 Annual Action Plan of the Five Year (2010 – 2015) Consolidated Plan for Community Development Block Grant (CDBG) funds. In 2010, Congress appropriated a third round of neighborhood stabilization funds (NSP3) under Section 1497 of the Wall Street Reform and Consumer Protection Act of 2010 (Pub. L. 111-202, approved July 21, 2010) (Dodd-Frank Act).   
  
NSP3 provides targeted emergency assistance to state and local governments to acquire and redevelop vacant or foreclosed residential properties that might otherwise become sources of abandonment and blight within our communities. Contra Costa County, as the County lead agency, has been allocated $1,871,294 in NSP3 funds.  
  
The purpose of the Substantial Amendment to the Annual Action Plan is to set forth the target areas and programs for Contra Costa County NSP3 activities.  
  
The County has 24 months from the date it executes a contract with HUD to spend 50 percent of the funds, and three years to expend all funds and complete all projects. Twenty-five percent of the funds must be spent on projects that will be affordable to households with incomes that are less than 50 percent of the area median income (i.e. $45,150 for a household of four).  
  
Determination of Target Areas  
HUD requires NSP3 funds be targeted to the areas with a high need as determined by HUD and in a manner that will have the greatest impact to the neighborhood.   
  
HUD requires NSP3 grantees use the HUD Foreclosure Need website. On the website, HUD provides estimates of foreclosure need and a foreclosure related needs score at the census tract level. The scores range from 1 to 20, with a score of 20 indicating census tracts with the HUD-estimated greatest need. In California, a minimum score of 17 is needed to be eligible for NSP3 funds. In Contra Costa County, there are 7 cities or communities that have at least one census tract with a score of 17 or higher. They are Antioch, Bay Point, Concord, Pittsburg, North Richmond, Richmond, and San Pablo.   
  
HUD requires that grantees use HUD data to determine how many units in a given area must be rehabilitated to affect a positive impact on an area. The areas must be very small in order to make an impact with an allocation of only $1.8 million. The Governor’s budget proposal to disestablish redevelopment agencies may mean there will not be any redevelopment agency funds to assist in NSP3 activities.   
  
HUD requires grantees also evaluate market conditions in order to select areas of need where market conditions will support the program and where there is a reasonable likelihood that the program will have a stabilizing impact on the community.  
  
County staff consulted with city and County housing and redevelopment agency staff to discuss NSP3. The County was provided with additional neighborhood and market information as a result. The County was also provided information on potential projects in those neighborhoods that would qualify for NSP3 funds.   
  
Determination of NSP3 Activities  
The County analyzed the data from HUD, the cities and County redevelopment areas, and other sources to evaluate need and market conditions. Staff then developed three tiers of projects:  
Tier 1 includes a portion of the Monument Corridor in Concord, downtown Pittsburg, and the south end of Tabora Road in Antioch. Tier 1 activities are multi-family rental projects that will serve low- and moderate-income families.  
Tier 2 includes the cities and communities of Bay Point, North Richmond (City and County) and San Pablo. Tier 2 activities are multi-family rental projects that will serve low- and moderate-income families.  
Tier 3 will initially be limited to a single Tier 1 or Tier 2 area. The Tier 3 activities are acquisition and rehabilitation of single family homes and home buyer downpayment assistance/shared appreciation loans.   
  
Due to the highly constrained time frame in which HUD and local jurisdictions are working, this amendment contains flexibility to allow the County to reallocate funds between tiers without requiring additional substantial amendments.   
  
The following table summarizes the program recommendations and amount of funds allocated to each program.  
  
NSP3 Activities  
  
  
  

If the County does not submit the proposed Substantial Amendment to HUD by March 1, 2011, it will not receive $1,871,294 in NSP3 funds.

This program will stabilize neighborhoods and provide affordable housing for low income families. It will support Outcome #2 in the Children's Report Card: Families are Economically Self Sufficient.