HomeMy WebLinkAboutCC Resolution 15041 (2021 Affordable Housing NOFA Funding Recommendations)Page 1 of 3
RESOLUTION NO. 15041
RESOLUTION AUTHORIZING THE EXPENDITURE OF $1,750,000 IN FUNDS FROM THE
AFFORDABLE HOUSING IN-LIEU FEE FUND (FUND #243) AND EXPENDITURE OF $850,000
FROM THE LOW/MODERATE FUND (FUND #495) ALONG WITH FUNDS FROM EACH SOURCE
FOR THE ATTORNEY FEES INCURRED BY THE CITY TO COMPLETE ALL DOCUMENTS
ASSOCIATED WITH THE FUNDING FOR FOUR 100% AFFORDABLE HOUSING PROJECTS IN
FULFILLMENT OF THE AFFORDABLE HOUSING TRUST FUND 2021 NOFA, SUPPORTING THE
AWARD OF FUNDING FROM THE COUNTY OF MARIN FOR PERMANENT LOCAL HOUSING
ALLOCATION (PHLA) FUNDS TO THE PROJECTS RECEIVING CITY FUNDING, AND
AUTHORIZING THE CITY MANAGER TO EXECUTE ALL DOCUMENTS INCIDENT TO THE
FUNDING IN A FORM APPROVED BY THE CITY ATTORNEY
WHEREAS, on January 21, 2020, the City Council adopted Resolution No. 14760, establishing
Guidelines for the Administration of the Affordable Housing Trust Fund; and
WHEREAS, on November 11, 2021, the City issued a Notice of Funding Availability (NOFA) for
two million five-hundred thousand dollars ($2,500,000) of funding from the Housing In-Lieu Fee Fund
to support affordable housing, with an application deadline of December 23, 2021 by 5:00pm; and
WHEREAS, the NOFA allows the City Council to issue loans in excess of the published available
funding amount; and
WHEREAS, the City received four responses to the NOFA totaling $4 million in funding requests;
and
WHEREAS, applications were reviewed using the evaluation criteria listed in Section 5 of the
Guidelines for the Administration of the Affordable Housing Trust Fund; and
WHEREAS, based upon this evaluation criteria and the needs for local support for the
development of affordable housing, a funding recommendation has been developed that exceeds the
amount of funds published in the NOFA using funds from the Low / Moderate Fund, which is a separate
fund established for affordable housing; and
WHEREAS, the City has sufficient funds in the Housing In-Lieu Fee Fund #243 to issue the
loans included in the recommendation and the funding requests included in the funding
recommendation meet the criteria for use of the funds; and
WHEREAS, the County of Marin maintains the Permanent Local Housing Allocation (PLHA)
Fund and issues loans from the fund to support affordable housing following the program rules and
guidelines provided by the State of California Housing and Community Development Department in
coordination with the Cities of San Rafael and Novato through the Priority Setting Committee.
WHEREAS, the Priority Setting Committee, which consists of elected members of Marin County
and the Cities of San Rafael and Novato, convenes to make recommendations for expending CDBG,
HOME, and PLHA funds, and the Committee recommendation is considered the approval of such
funding requests.
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NOW, THEREFORE, BE IT RESOLVED, that the City Council of the City of San Rafael as
follows:
Section 1. The City Council authorizes the following affordable housing expenditures from the
Housing In-Lieu Fee Fund, subject to City requirements for issuing loans for affordable housing:
i. $400,000 loan from the Housing In-Lieu Fee Fund (#243) for the Canal Alliance for acquisition
of Belvedere St. The project will be restricted at an average of at or below 60% of Marin
County Area Median Income set by the United States Department of Housing and Urban
Development (HUD AMI) as published by the Marin Housing Authority. The average
affordability in the project, however, will be achieved over time through attrition as households
move. At acquisition, the building shall qualify for the loan if the in-place tenant household
income average is at or below an average of up to 80% AMI. Upon vacancy, units shall be
income restricted to individuals and households earning at or below 60% AMI. Canal Alliance
will have 24 months to use the funds to purchase the site. During this time period and upon
request from Canal Alliance the City Council may award the funding to an alternative site at its
sole discretion. If the funding is not used in this time period, the funds shall be returned to the
Fund.
ii. $350,000 grant from the Housing In-Lieu Fee Fund (#243) for the Homeward Bound of Marin
project at 190 Mill Street for 32 units of permanent supportive housing for people who are
homeless, chronically homeless, or at risk of chronic homelessness, at rents affordable to
households earning 30% of Area Median Income or less. The funds will be issued as a grant.
iii. $1,000,000 loan from the Housing In-Lieu Fee Fund (#243) for the Eden Housing project at
999 Third Street for 67 units of low- and very low-income housing for older adults.
iv. $850,000 loan from the Low/Moderate Fund (#495) for the Eden Housing adaptive reuse
project at 3301 Kerner Boulevard for 40 units of permanent supportive housing for homeless
or formerly homeless households with mental illness, at rents affordable to very low-income
households.
Section 2. The City Council authorizes the funding to be issued in the form of residual receipts loans
at a simple interest rate of three percent (3%, simple) during pre-development, and construction or
rehabilitation for new construction, adaptive reuse or acquisition/rehabilitation projects. The loan or
grant principal shall be used to cover the City’s legal costs associated with processing all documents
incident to the agreements, which are estimated to be approximately $5,000 per loan. The
predevelopment and construction phases may last up to 24 months and can be extended with prior
authorization in writing from the City. When construction or rehabilitation is completed the interest rate
for loans shall convert to between simple one-and-one-half percent (1.5%, simple) and simple three
percent (3.0%, simple) depending on the needs of the financing structure in the project for the
duration of the affordability term. Interest accrued during the pre-development and construction
phases shall be rolled into the principal loan balance at conversion to permanent financing. The
conversion date for new construction and adaptive/reuse projects is the date the project receives a
temporary or final certificate of occupancy. The conversion date for acquisition/rehabilitation projects
is the date when all completed rehabilitation work has been approved by the City. The affordability
term shall last for 55 years following the date of conversion. If excess funds remain at project
completion those funds shall be used to pay down the City loan. The City may waive it’s right upon
request from the sponsor to use the funds to pay down other debt in the project.
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Section 3. The City Council recommends that the Priority Setting Committee recommend and that the
Marin County Board of Supervisors approve any request for PLHA funding submitted for the projects
receiving funding through this resolution. If a project receives PLHA funding based on the match of
the City’s Housing In-Lieu Fee Funds and the award results in the funding request being overfunded,
the amount of Housing In-Lieu Fee Funds shall be reduced to match the sponsor request.
Section 4. The City Council authorizes the City Manager to execute all documents and related
documents required and including the additional requirements associated with expending the funds,
and to execute all other documents required in connection with the agreements, in a form to be
approved by the City Attorney.
I, LINDSAY LARA, Clerk of the City of San Rafael, hereby certify that the foregoing resolution was duly
and regularly introduced and adopted at a regular meeting of the City Council of said City held on
Monday the 7th day of March 2022, by the following vote, to wit:
AYES: COUNCILMEMBERS: Bushey, Hill, Kertz, Llorens Gulati & Mayor Kate
NOES: COUNCILMEMBERS: None
ABSENT: COUNCILMEMBERS: None
LINDSAY LARA, City Clerk