Agenda

Return

D.7

To:	Board of Supervisors
From:	John Kopchik, Director, Conservation & Development Department
Date:	May 9, 2023

Contra

Costa

County

Subject:

Approve Affordable Housing Finance Committee Recommendations to Award In-Lieu and Measure X Funds

APPROVE	OTHER
RECOMMENDATION OF CNTY ADMINISTRATOR	RECOMMENDATION OF BOARD COMMITTEE

Action of Board On: 05/09/2023

APPROVED AS RECOMMENDED

OTHER

Clerks Notes:

VOTE OF SUPERVISORS

AYE:

John Gioia, District I Supervisor
Candace Andersen, District II Supervisor
Diane Burgis, District III Supervisor
Ken Carlson, District IV Supervisor
Federal D. Glover, District V Supervisor

Contact:

Cathy Remick, 925-655-2887

I hereby certify that this is a true and correct copy of an action taken and entered on the minutes of the Board of Supervisors on the date shown.
ATTESTED: May 9, 2023
Monica Nino, County Administrator

BY:	, Deputy

RECOMMENDATION(S):

APPROVE the Affordable Housing Finance Committee (AHFC) FY 2023/24 recommendations for the allocation of $960,000 in Inclusionary Housing Ordinance In-Lieu funds, $6,500,000 in Measure X Housing funds, and $3,119,351 in State Local Housing Trust Funds.

FISCAL IMPACT:

No General Fund impact. In-Lieu fees are approved and conditioned as part of a project's land use entitlements and paid at the time of issuance. Measure X funds are part of a countywide, 20-year 1/2 cent sales tax approved by Contra Costa County voters on November 30, 2020. The Local Housing Trust funds are provided to the County by the California Department of Housing and Community Development.

BACKGROUND:

In-Lieu Fees

BACKGROUND: (CONT'D)

Every residential project in unincorporated Contra Costa County consisting of five units or more is subject to the County's Inclusionary Housing Ordinance (IHO), Chapter 822-4 of the County Ordinance Code. The IHO promotes affordable housing by requiring 15 percent of units in the development to be affordable units. Alternative methods of compliance can include payment of a fee in lieu of building affordable units on-site, building off-site, and other feasible alternatives. The in-lieu fees are approved and conditioned as part of the project's land use entitlements, paid at the time of building permit issuance, and deposited in a fund with the Department of Conservation and Development (DCD). These funds may only be spent on new affordable housing construction in unincorporated Contra Costa County. The amount of In-Lieu Fee Funds available for eligible affordable housing projects for FY 2023/24 is $960,000.

Measure X Housing Funds and Local Housing Trust Funds (for capital projects of Affordable Housing)
Measure X is a countywide 20-year 1/2 cent sales tax approved by Contra Costa voters on November 3, 2020. The ballot measure language stated the intent of Measure X is "to keep Contra Costa's regional hospital open and staffed; fund community health centers, provide timely fire and emergency response; support crucial safety-net services; invest in early childhood services; protect vulnerable populations; and for other essential County services."

On November 16, 2021, the County Board of Supervisors approved the allocation of Measure X funding to establish a new funding source for housing-related activities, now termed the Measure X Housing Fund (MX Housing Fund). Eligible projects under the MX Housing Fund for Year 1 project funds to be distributed through the Affordable Housing Program include:

Affordable housing for populations earning up to 80 percent Area Median Income (AMI), focusing on 50% AMI and below.
Acquisition, pre-development, construction, rehabilitation, and operating reserve funds.
Innovation pilot programs and capacity-building technical assistance for affordable housing activities (acquisition, pre-development, construction, rehabilitation, and operating reserve funds).
Grant writing for affordable housing activities (acquisition, pre-development, construction, rehabilitation, and operating and reserve funds).

On October 11, 2022, the California Department of Housing and Community Development (HCD) announced that the County was awarded a Local Housing Trust Fund (LHTF) program award of $3,119,351. Measure X Housing funds will be used as a 100 percent match to the LHTF Program, as required by HCD. The housing projects funded by the LHTF program must be located in the unincorporated areas of the County or the incorporated cities and towns of Brentwood, Danville, El Cerrito, Hercules, Martinez, Moraga, Oakley, Pinole, Pittsburg, Pleasant Hill, Richmond, San Pablo, San Ramon, or Walnut Creek. Additionally, a minimum of 30 percent of projects awarded by the LHTF program and those matched by Measure X funds must serve households earning up to 30 percent AMI.

Given that Measure X Housing Funds will be used as the 100 percent match source to the LHTF program funds, the total amount available in Measure X Housing Funds and LHTF funds available to the development, acquisition, and/or rehabilitation of eligible affordable housing projects is $9,619,351.

On September 20, 2022, a Notice of Funding Availability for County affordable housing funds (federal sources and local sources, including the In-Lieu Fee Funds and Measure X Housing Funds) and a Request for Proposals (NOFA/RFP) was released and was published in all editions of the Contra Costa Times and posted on the County's Department of Conservation and Development (DCD) website soliciting applications for the development, acquisition, and/or rehabilitation of affordable housing throughout the County. On November 3, 2022, a public Housing "Kick-Off" Meeting was held virtually via Zoom by County DCD staff to provide information to prospective applicants on the NOFA/RFP. County DCD staff also held virtual "office hours" on four separate occasions in the months of November and December 2022 to provide additional technical assistance to prospective applicants. The County received 16 applications by the December 19, 2022 deadline for both federal and local funds. After reviewing and analyzing the applications and conducting interviews with the applicants, DCD staff recommended various affordable housing funding streams to the County's Affordable Housing Finance Committee (AHFC), the advisory committee of the Board of Supervisors that reviews staff's recommendations on affordable housing financing matters.

The AHFC held a public meeting on April 21, 2023, to consider staff recommendations for all sources, including In-Lieu Fee Funds and Measure X Housing Funds. Following a discussion on each application, the AHFC recommends the following In-Lieu Fee Fund and Measure X Housing Fund allocations for the consideration of the Board of Supervisors (the allocations of federal funds covered in the RFP are addressed in two separate Board Orders for May 9).

Anton San Ramon
Developer: Anton Development Company
Location: San Ramon
Award Amount: $2,000,000 Measure X Funds
Contingencies for Approval: Measure X funds committed, as evidenced by an executed loan, by June 30, 2025. Construction must commence by June 30, 2026.
Project Summary: New construction of a mixed-use, 130-unit rental apartment development for households earning between 30% and 80% AMI

Bella Vista Apartments
Developer: Alliant Strategic Development
Location: Bay Point
Award Amount: $960,000 In-Lieu Funds
Contingencies for Approval: All other financing committed by December 31, 2024. In-Lieu funds committed, as evidenced by an executed loan, by August 31, 2025. Confirmation that the project's financials are compliant with the County's Affordable Housing Program Guidelines.
Project Summary: New construction of 100% affordable multifamily housing with 124 units available for residents making 80% AMI or below.

El Cerrito Plaza BART TOD
Developer: Related California, Holliday Development, Satellite Affordable Housing Associates (SAHA)
Location: El Cerrito
Award Amount: $2,000,000 Measure X Funds
Contingencies for Approval: All other financing committed by December 31, 2024. Measure X funds committed, as evidenced by an executed loan, by June 30, 2025. Construction must commence by June 30, 2026.
Project Summary: The development is a 100% affordable transit-oriented development that will include 70 apartments for low and very low-income families earning between 30%-60% AMI.

Legacy Court
Developer: Community Housing Development Company of North Richmond
Location: Richmond
Award Amount: $1,421,000 Measure X Funds
Contingencies for Approval: All other financing committed by December 31, 2023. Measure X funds committed, as evidenced by an executed loan, by June 30, 2024.
Project Summary: New construction of 43 rental units affordable to and occupied by very low-income families and special needs households. The development is on five separate sites on three blocks in the incorporated portion of North Richmond.

Mayfair Affordable
Developer: BRIDGE Housing Corporation
Location: El Cerrito
Award Amount: $4,197,500 Measure X Funds
Contingencies for Approval: All other financing committed by December 31, 2023. Measure X funds committed, as evidenced by an executed loan, by June 30, 2025. Construction must commence by June 30, 2026.
Project Summary: New construction of 69 affordable rental apartment units for households ranging from 30%-60% AMI

Project-specific Measure X and In-Lieu loan packages (legal documents) will return to the Board for approval at later dates when each respective project is ready to enter legally binding commitments.

CONSEQUENCE OF NEGATIVE ACTION:

Negative Action will prevent these affordable housing developers from moving forward with their projects in FY 2023/24. The applicants would have to wait and apply for funds from the County in next year's funding cycle, which could jeopardize the projects or significantly delay their construction schedules.

CHILDREN'S IMPACT STATEMENT:

The recommendation supports the following children's outcomes:

(1) Children Ready for and Succeeding in School;
(2) Children and Youth Healthy and Preparing for Productive Adulthood;
(3) Families that are Economically Self-Sufficient;
(4) Families that are Safe, Stable, and Nurturing; and
(5) Communities that are Safe and Provide a High Quality of Life for Children and Families.