REPORT TO COUNCIL
SUBJECT
Title
Adopt a Resolution Authorizing the Application for and Receipt of Prohousing Incentive Program Funds
Report
BACKGROUND
In 2019, Assembly Bill 101 established the Prohousing Designation Program to provide incentives for jurisdictions that have adopted policies that facilitate housing production. The program, which is administered by the California Department of Housing and Community Development (HCD), created a new process by which jurisdictions could apply for a special “Prohousing” designation. The City submitted a formal application for the Prohousing Designation Program to HCD on December 6, 2024.
One of the incentives available for Prohousing-designated jurisdictions is the Prohousing Incentive Program (PIP). PIP is intended to reward Prohousing-designated jurisdictions by providing additional grant funds for housing-related projects and programs. HCD makes PIP funds available through an annual Notice of Funding Availability (NOFA). On August 15, 2024, HCD released a PIP NOFA for an estimated $8 million in total funds. Of that total, $1,160,000 is allocated specifically for the Bay Area region.
Although the City’s Prohousing Designation Program application is currently pending, the City may still apply for PIP. If awarded the Prohousing designation by December 31, 2024, the City will be eligible to receive PIP funds. PIP applications must be submitted by December 31, 2024 along with an authorizing resolution (Attachment 1). Awards are tentatively scheduled to be announced in April 2025.
EXISTING POLICY
General Plan, Housing Element
Goal H-2: Assist in the provision of affordable housing to meet the diverse needs of Sunnyvale’s lower- and moderate-income households.
Policy H-2.1: Leverage local financial assistance with other sources of funding and identify new funding sources for affordable housing to maximize the number of affordable units and to reach the deepest level of affordability.
Goal H-5: Promote equal housing opportunities for all residents, including Sunnyvale’s special needs populations, so that residents can reside in the housing of their choice.
Policy H-5.13: Participate in the County Collaborative on Affordable Housing and Homeless Issues to support its efforts to prevent and end homelessness. Facilitate and sponsor the provision of permanent supportive housing for homeless people. Support local service providers that offer facilities and support services to homeless individuals and families, and persons at risk of homelessness.
ENVIRONMENTAL REVIEW
The applying for and receiving of grant funds does not constitute a “project” within the meaning of the California Environmental Quality Act (“CEQA”) pursuant to CEQA Guidelines Sections 15060(c)(2), 15060(c)(3), or 15378 because there is no potential that it will result in a direct or reasonably foreseeable indirect physical change in the environment.
DISCUSSION
Funding Amounts
Maximum PIP funding award amounts are determined based on jurisdiction population size and Prohousing Designation score. Based on the City’s population and expected Prohousing Designation score of 61, the City is eligible for a maximum PIP award of $1,250,000 (which far exceeds the amount allocated to the entire Bay Area).
HCD determines actual PIP funding awards by ranking each jurisdiction’s application by their Prohousing Designation score within their geographic region. If awarded, the City would be funded through the Bay Area region’s allocation of $1,160,000. Once those regional funds are depleted, the City could receive funds from a set-aside allocation of $2,000,000 (this amount is also shared among many eligible jurisdictions). Jurisdictions that are receiving their first PIP award receive first priority for funding.
Eligible Uses
PIP funds must be used to support local housing programs and projects including, but not limited to, the following eligible uses:
• Development, acquisition, and rehabilitation of rental housing for lower and moderate-income households;
• Affordable rental and ownership housing for households up to 150 percent of area median income;
• Assisting persons who are experiencing or at risk of homelessness, including providing rapid rehousing, rental assistance, navigation centers, and emergency shelter; and
• Homeownership opportunities, including, but not limited to, down payment assistance.
A complete list of eligible uses for PIP funds is included as Attachment 2 to this report. A maximum of five percent of PIP award funds may be used for administrative costs related to the program for which the award was made. PIP funds must be expended by June 30, 2026.
Recommended Use of Funds
The Housing Division conducted an assessment of the City’s upcoming housing programs and projects to identify the best use for PIP funds, if awarded. Based on eligible uses and the June 30, 2026 expenditure deadline, staff recommends using PIP funds for homeless services including supportive outreach services and/or increased shelter options. The City is significantly expanding homeless supportive services and is considering further expansion with recent Study Issues for safe parking, emergency shelter for families with minor children, overnight warming centers and sanctioned encampments. PIP funds could be critical to the success of these programs. Staff has prepared a PIP application (Attachment 3) allocating the City’s maximum award of $1,250,000 to homeless services.
FISCAL IMPACT
There is no fiscal impact directly associated with the application. If awarded, the City could receive up to $1,250,000 in PIP grant funding for homeless services.
PUBLIC CONTACT
Public contact was made by posting the Council meeting agenda on the City's official-notice bulletin board at City Hall, at the Sunnyvale Public Library and in the Department of Public Safety Lobby. In addition, the agenda and this report are available at the NOVA Workforce Services reception desk located on the first floor of City Hall at 456 W. Olive Avenue (during normal business hours), and on the City's website.
RECOMMENDATION
Recommendation
Adopt a Resolution Authorizing the Application for and Receipt of Prohousing Incentive Program Funds.
Levine Act
LEVINE ACT
The Levine Act (Gov. Code Section 84308) prohibits city officials from participating in certain decisions regarding licenses, permits, and other entitlements for use if the official has received a campaign contribution of more than $250 from a party, participant, or agent of a party or participant in the previous 12 months. The Levine Act is intended to prevent financial influence on decisions that affect specific, identifiable persons or participants. For more information see the Fair Political Practices Commission website: www.fppc.ca.gov/learn/pay-to-play-limits-and-prohibitions.html
An “X” in the checklist below indicates that the action being considered falls under a Levine Act category or exemption:
SUBJECT TO THE LEVINE ACT
___ Land development entitlements
___ Other permit, license, or entitlement for use
___ Contract or franchise
EXEMPT FROM THE LEVINE ACT
___ Competitively bid contract*
___ Labor or personal employment contract
_X_ General policy and legislative actions
* "Competitively bid" means a contract that must be awarded to the lowest responsive and responsible bidder.
Staff
Prepared by: Ryan Dyson, Housing Specialist II
Reviewed by: Jenny Carloni, Housing Officer
Reviewed by: Trudi Ryan, Director, Community Development
Reviewed by: Dennis Jaw, Interim Director of Finance
Reviewed by: Connie Verceles, Deputy City Manager
Approved by: Tim Kirby, City Manager
ATTACHMENTS
1. Resolution Authorizing Application for and Receipt of Prohousing Incentive Program Funds
2. Prohousing Incentive Program Eligible Uses
3. Draft Prohousing Incentive Program Application