In 2000, the County and SHELTER, Inc. of Contra Costa County (Shelter Inc.) entered into a ground lease with a term of 20 years so that Shelter Inc. could lease a portion of County-owned property located at 4553 Delta Fair Boulevard in Antioch (the Property). Also in 2000, the County provided a revocable grant to Shelter Inc. of $587,000 in HOME Investment Partnerships Act (HOME) funds and granted approximately $1.6 million from the County General Fund to support the construction of a 20 unit apartment building. The HOME funds were used to support the construction of nine units. Shelter Inc. and the County entered into a regulatory agreement with a 40 year term. Both the ground lease and the regulatory agreement restrict the use of the building for transitional housing. The development, recently known as the Lyle Morris Family Center (the Center), provided transitional housing for homeless households until August 2016.  
  
Operation of the Center was primarily funded by the U. S. Department of Housing and Urban Development (HUD). In the past several years, HUD has placed an increasing emphasis on permanent supportive housing over transitional housing. In May 2016, HUD announced that it would no longer fund the transitional housing program operated by Shelter Inc. and other providers. Shelter Inc. is requesting that the County amend the ground lease, operating agreement, and the HOME regulatory agreement so that Shelter Inc. can convert the facility into permanent housing for families who are homeless or at-risk of homelessness. The revised documents continue to require that four units be occupied by extremely-low income (incomes at or below 30 percent of the area median income (AMI)) tenants and five units be occupied by very-low income (incomes at or below 50 percent AMI) tenants. The revised documents also require that an additional two units be occupied by low-income tenants and seven units be occupied by tenants with incomes at or below 65 percent AMI. Shelter Inc. expects that a significant number of households will have rental subsidies such as Housing Choice Vouchers, Veterans Affairs Supportive Housing vouchers, or Shelter Plus Care. These subsidies will allow households to pay just 30 percent of their income in rent. Shelter, Inc. is also changing the name to Lyle Morris Apartments.  
  
County staff recommends that the Board of Supervisors agree to this request. Attached are documents that would amend and replace the HOME documents.

Shelter Inc. cannot continue to operate the Center as transitional housing. If the County does not amend the HOME regulatory agreement, Shelter Inc. will be forced to close the Center.

This action supports Children’s Impact Statement number 4: Families that are Safe, Stable and Nurturing.