Agenda Item Wording:
title
Permanent Local Housing Allocation Amendment: Conduct a Public Hearing and proceed with original approved Fiscal Year (FY) 2024/2025 Permanent Local Housing Allocation (PLHA) Plan.
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Deadline for Action: 12/16/2024
Submitting Department: Finance and Technology Services
Contact Name and Phone Number: Margie Perez, Housing Specialist, margie.perez@visalia.city, (559) 713-4460; Melody Murch, Assistant Finance Director, melody.murch@visalia.city, (559) 713-4379; Renee Nagel, Finance Director, renee.nagel@visalia.city, (559) 713-4375
Department Recommendation:
Staff Recommends that Council:
1. Conduct a Public Hearing to allow opportunity for citizens to provide input and comment on the FY 2024/2025 Permanent Local Housing Allocation (PLHA); and
2. Proceed with the approved FY 2024/25 PLHA Plan as approved by Council on July 20, 2020.
Background Discussion:
The Permanent Local Housing Allocation (PLHA) was created by State housing legislation in 2017 to address the shortage of affordable housing in California, by establishing a $75 recording fee on real estate documents. PLHA revenue will vary from year to year, as revenue is dependent on real estate transactions which fluctuates.
On October 16, 2024, CA Department of Housing and Community Development (HCD) required all local jurisdictions to amend their FY 2024/25 PLHA Plan to include 40% to an Affordable Owner-Occupied Workforce Housing (AOWH) activity. Council provided initial concurrence with the the proposed amendment during Work Session on December 3, 2024.
However, on December 6, 2024, HCD notified the City that an amendment to include 40% to an AOWH activity is now only required for first-time applicants, and returning applicants who want or need to amend their existing plan. Therefore, it is no longer required for all jurisdictions to amend their FY 2024/25 PLHA plan to include a 40% to an AOWH activity and may keep their original plan as approved by HCD. Council still has the option to continue with the proposed amendment to transfer 40% to a AOWH activity or keep the original approved PLHA plan. If Council selects to move forward with the proposed amendment it will reduce funding for already approved PLHA activities that include the Visalia Navigation Center, the Warming Center, and Eden House. Table 1: FY 2024/2025 PLHA Optional Amendment below shows the difference between the optional amendment and original plan. Staff recommends keeping the original approved plan to not reduce funding to already approved activities. Council will have the option to include a homeownership activity in the next 5-year PLHA plan
Amendment Public Comment Period: If Council selects to proceed with the optional amendment, a 10-day public comment period is required with the public hearing tonight. The 10-day public comment period began on December 6, 2024, and will end with the public hearing tonight. English and Spanish notices were published in the Visalia Times Delta on December 6, 2024. The draft proposed FY 2024/25 PLHA Amendment was available for public review and comment on the City of Visalia website at www.visalia.city.
Current 5-Year PLHA Plan: The City adopted the first five-year PLHA plan on July 20, 2020. The City focused the current 5-year PLHA funds to meet the City’s highest priority for homeless programs based on a Community Needs Assessment conducted during the development of the 2020-2025 Consolidated Plan. As a result, the approved PLHA funding projects include 1) administration, 2) development of a Navigation Center, 3) operation of a Navigation Center, 4) operation of temporary emergency shelter (Warming Center), and 5) operation of bridge transitional housing (Eden House). Since PLHA annual funding fluctuates, CA Department of Housing and Community Development (HCD) recommended submitting the 5-year PLHA plan using percentages of annual funding based on the first-year allocation of $630,815. The current 5-year PLHA funding by percentage is show below in Table 2: FY 2020/21 - FY 2024/25 PLHA Funding by Percentage.
Annual PLHA funding fluctuated each year as stated by HCD. The first-year PLHA allocation received was $630,815, and increased in years 2 and 3; however, decreased in years 4 and 5 for a total of $3,645,579 in PLHA funding as shown below in Table 3: FY 2020/21 - FY 2024/25 PLHA Funding.
PLHA Funding Requirement - Affordable Owner-Occupied Workforce Housing (AOWH): California Health and Safety Code requires 20% of PLHA funds to be expended for Affordable Owner-Occupied Workforce Housing (AOWH). Initially, HCD did not impose this requirement on local governments but has monitored the percentage statewide. Based on their projections, HCD has determined that at the end of the current 5-year period funds expended on AOWH will be behind the required 20%. Due to this projection, HCD required all local jurisdictions to amend their FY 2024/25 PLHA Plan to include 40% to an Affordable Owner-Occupied Workforce Housing (AOWH) activity.
The City of Visalia has not had an AOWH funded activity which meant the City had to amend the FY 2024/25 plan to meet the 40% requirement. HCD had stated that FY 2024/25 PLHA plans submitted to HCD without a 40% AOWH activity will be rejected and will result in the loss of the FY 2024/25 allocation. On December 6, 2024, HCD announced that only first-time applicants and jurisdictions that wanted or needed to amend their plans for other reasons are now required to include 40% toward an AOWH activity. Therefore, the City of Visalia is no longer required to amend the FY 2024/25 PLHA plan and may keep the original plan as approved by Council and HCD.
Eligible AOWH Activities:
The following PHLA activities are directly related to ownership housing for household up to 120% of the area median income (AMI), which for a family of four is $105,500. A detailed list of eligible AOWH can be found in Attachment “D” AOWH Activities.
• Development, acquisition, and rehabilitation of ownership housing.
• Matching funds for a Housing Trust Fund or Housing Asset Fund.
• ADA modifications in low-income owner-occupied housing.
• Acquisition and rehabilitation of foreclosed or vacant homes.
• Homeownership assistance.
Next Steps: If Council approves to move forward with the amendment, staff will submit the adopted FY 2024/25 PLHA Amendment to HCD for review and approval. If Council selects to keep the original approved plan, staff proceeds with the original approved FY 2024/2025 PLHA plan and no amendment is required.
Fiscal Impact:
If Council selects to approve the amendment it will amend the PLHA FY 2024/25 budget as shown in Table 1 above.
If Council selects to proceed with the approved plan the FY 2024/25 PLHA budget will remain as approved and as shown in Table 4 below.
Prior Council Action:
● July 20, 2020 - Adoption of the FY 2020/21 - FY 2024/25 Permanent Local Housing Allocation (PLHA) 5-year plan.
● December 3, 2024, Work Session - Permanent Local Housing Allocation Plan (PLHA) 5-year plan development and FY 2024/2025 PLHA Amendment.
Other: None
Alternatives: None
Recommended Motion (and Alternative Motions if expected):
recommendation
I move to proceed with the approved FY 2024/25 PLHA plan as approved by Council on July 20, 2020.
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Environmental Assessment Status: n/a
CEQA Review: n/a
Attachments:
● Attachment A - FY 2024/25 PLHA Optional Amendment
● Attachment B - PLHA Resolution 2024-71
● Attachment C - PLHA NOFA
● Attachment D - AWOH Activities
● Attachment E - PLHA Guidelines
● Attachment F - December 3, 2024 PLHA Staff Report
● Attachment G - FY 2024/25 PLHA Amendment PowerPoint