REPORT TO HOUSING AND HUMAN SERVICES COMMISSION
SUBJECT
Title
Recommendation to City Council to Award Conditional Funding for $29,533,000 in Housing Mitigation Funds and Below Market Rate In-Lieu Funds for the Acquisition, Pre-development, and/or Development of Three Affordable Housing Developments
Report
BACKGROUND
On May 2, 2024, a Notice of Funding Availability ("NOFA") was issued by the Housing Division for the construction, rehabilitation, acquisition, and/or predevelopment of affordable housing developments to be funded with the City's Housing Mitigation Funds ("HMF") and Below Market Rate ("BMR") In-Lieu Funds. A total of $20 million in HMF and BMR funds was made available through this NOFA, with a note that additional funding could be considered. The City intends to release a NOFA for Housing Mitigation Funds every two years, with the previous NOFA released in 2022 for $16 million.
Housing Mitigation Funds are the collection of Housing Impact Fees for non-residential development. Housing Impact Fees are intended to mitigate the demand for new affordable housing created by the development of new industrial, office, retail, lodging, and other commercial square footage. BMR In-Lieu Fees are collected as a sub-fund of the Housing Mitigation Fund from the development of new residential units that do not provide the affordable units required by the City's inclusionary zoning policy. Projects funded using City Housing Mitigation Funds are deed restricted as affordable to lower-income households for a minimum of fifty-five years. All funds are used in accordance with the Mitigation Fee Act.
The NOFA announcement was distributed broadly to residential developers and non-profit housing agencies throughout the entire Bay Area region. The City issued a three-day extension of the deadline, which was announced via email to all developers that had previously received a NOFA announcement. Three applications were received by the extended June 6, 2024 deadline. The...
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