SR 02-27-2024 5E
City Council
Report
City Council Meeting: February 27, 2024
Agenda Item: 5.E
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To: Mayor and City Council
From: David Martin, Director, City Planning
Subject: Adoption of Resolution Authorizing the City Manager to Submit an Application
for the California Department of Housing and Community Development's
Prohousing Incentive Program (PIP) Grant and to Execute All Necessary
Documents to Accept Grant If Awarded
Recommended Action
Staff recommends that the City Council:
1. Adopt a finding of no possibility of significant effect pursuant to Section
15061(b)(3) (Common Sense Exemption) of the California Environmental Quality
Act (CEQA) Guidelines and find that uses of grant funding for short term housing
assistance are consistent with the certified 6th Cycle Housing Element
Environmental Impact Report;
2. Adopt the attached resolution authorizing the City manager to submit an
application for grant funds in the amount of $1,000,000 from the California
Department of Housing and Community Development’s Prohousing Incentive
Program (PIP) and to authorize the City Manager to execute all necessary
documents to apply for the grant, accept the grant, if awarded, and accept all
grant renewals and modifications, if awarded; and
3. Authorize budget changes as outlined in the Financial Impacts and Budget
Actions section of this report, in the event the grant is awarded.
Summary
Staff seeks authorization to apply for $1,000,000 in Round 2 grant funding through the
state of California’s Housing and Community Development’s (HCD) Prohousing
Incentive (PIP) Program. Award grant funding for PIP is available to jurisdictions that
are compliant with Housing Element requirements and have received the Prohousing
Designation. The Prohousing Designation recognizes local governments that promote
the production of housing and allows local governments with the designation to apply for
and receive priority funding under programs that support housing, transportation,
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infrastructure, land use, and related objectives. On January 31, 2024, Governor
Newsom announced that the City of Santa Monica had officially received its Prohousing
Designation, making the City eligible for PIP grant funding.
Discussion
On October 14, 2022, HCD certified the City’s 6th Cycle 2021-2029 Housing Element. A
key focus of the certified Housing Element is housing production, with substantial
emphasis on affordable housing production, to meet Santa Monica’s Regional Housing
Needs Allocation (RHNA) as mandated by Government Code Section 65584.05.
The City’s 6th Cycle RHNA for the next 8 years is 8,895 units, of which 6,168 or 69% are
to be affordable units.
Income Category RHNA Target
(# units) % of RHNA
Very Low 2,794 31%
Low 1,672 19%
Moderate 1,702 19%
Above Moderate 2,727 31%
Total 8,895 100%
The certified 6th Cycle Housing Element is a State-mandated plan for meeting the City’s
share of regional housing needs. State law requires that the Housing Element include
an inventory of land that demonstrates the City’s capacity to realistically accommodate
its RHNA of 8,895 units, of which 69% must be affordable to moderate and lower
income households.
Government Code section 65589.9 established HCD’s Prohousing Designation
Program, which recognizes cities and counties that adopt and implement policies that
facilitate the planning, approval, or construction of housing. Jurisdictions that receive the
Prohousing designation are incentivized with additional points or other preference in the
scoring of competitive housing, community development, and infrastructure programs.
The Prohousing Incentive Program (PIP) is a state investment from the Building Homes
and Jobs Trust Fund, established by Chapter 364, Statutes of 2017 (SB 2, Atkins) to
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create and conserve affordable housing. PIP awards funds to encourage cities and
counties to obtain the Prohousing Designation. PIP provides grant funding for eligible
Prohousing designated jurisdictions to use towards planning and implementation
activities related to housing and community development. Award amounts are based on
population estimates. With a population of approximately 93,000, the City is eligible for
a base of $500,000 in award funding. Additionally, bonus award funding is available
based on a jurisdiction’s prohousing score with a maximum bonus award of $500,000.
In early March 2023, the City applied for the Prohousing Designation program
concurrently with PIP program grant award Round 1. The award of the PIP program
grant Round 1 was contingent on the City receiving its Prohousing Designation by
March 30, 2023. The City did not receive the designation prior to the March 30 deadline
as its application was still pending review by HCD, and as such, the City was
determined to be ineligible for Round 1 PIP grant funding.
On January 23, 2024, HCD announced the release of a Notice of Funding Availability
(NOFA) for Round 2 grant funding of the PIP. This second round of PIP funding makes
in total an estimated $9.5 million available for eligible jurisdictions, with funds available
to Prohousing Designated jurisdictions on a competitive basis. On January 31, 2024, it
was officially announced that the City was awarded the Prohousing Designation with a
score of 75 points, the highest awarded to any jurisdiction in California. With this
designation and score, the City is eligible for PIP program grant Round 2 for a total
eligible award amount of $1,000,000 (base award $500,000 + bonus award $500,000).
This round of program funding provides awards for eligible jurisdictions to use towards
planning and implementation activities related to housing and community development.
Per HCD’s Notice of Funding Guidelines, eligible activities for grant funding include:
• The predevelopment, development, acquisition, rehabilitation, and preservation
of multifamily, residential live-work, rental housing that is affordable to extremely
low-, very low-, low-, and moderate-income households, including necessary
operating subsidies.
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• Affordable rental and ownership housing that meets the needs of a growing
workforce earning up to 120 percent of area median income, or 150 percent of
area median income in high-cost areas.
• Matching portions of funds placed into local or regional housing trust funds.
• Matching portions of funds available through the Low- and Moderate-Income
• Housing Asset Fund pursuant to subdivision (d) of Section 34176 of the Health
and Safety Code.
• Capitalized reserves for services connected to the creation of new permanent
supportive housing, including, but not limited to, developments funded through
the Veterans Housing and Homelessness Prevention Bond Act of 2014.
• Assisting persons who are experiencing or at risk of homelessness, including
providing rapid rehousing, rental assistance, navigation centers, emergency
shelters, and the new construction, rehabilitation, and preservation of permanent
and transitional housing.
• Accessibility modifications.
• Efforts to acquire and rehabilitate foreclosed or vacant homes.
• Homeownership opportunities, including, but not limited to, down payment
assistance.
• Fiscal incentives or matching funds to local agencies that approve new housing
for extremely low, very low, low-, and moderate-income households
Funds are available for encumbrance in June 2024 and must be expended by June
2026. To support implementation of the certified Housing Element and consistent with
the City Council’s adopted priority to prevent homelessness, grant funds would be used
in the category of assisting persons who are experiencing or at risk of homelessness,
including providing rapid rehousing, rental assistance, navigation centers, emergency
shelters, and the new construction, rehabilitation, and preservation of permanent and
transitional housing.
Specifically, grant funds would be used towards programs that aim to prevent
homelessness through short-term rental assistance for the full allocation amount of one
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million dollars, to be allocated to administration and disbursement of funds. These funds
will be used to provide assistance to eligible Santa Monica renters that are at risk of
losing their housing due to rent increases or eviction for non-payment of rent. Funds will
be prioritized for the most vulnerable tenants and follow the recommendations
requested in the 16 Item passed at the City Council meeting on August 22, 2023. City
Council requested an estimate of the funding required to provide flexible financial
assistance to eligible renters facing rent increases or eviction for non-payment of rent in
an effort to provide rapid problem-solving assistance to vulnerable renters to keep them
housed. These recommendations will be presented to City Council in Fall 2024 after the
consultant completes its study. The targeted allocation of these funds is an important
step towards combating homelessness in the City.
Funding these programs would further the City’s commitment to Housing Element
Program 6.B:
Program 6.B - Seek Funding Sources To Support Rental Assistance
For Vulnerable Individuals And Households At-Risk Of
Displacement
The City shall continue to pursue and identify new funding sources that
support rental assistance programs, including emergency rental
assistance for individuals and households at risk of displacement
throughout the City with a goal to provide emergency rental assistance to
at least 100 households throughout the city over the Housing Element
cycle.
Environmental Review
Application and acceptance of the Prohousing Implementation Program grant is exempt
from the California Environmental Quality Act (CEQA) pursuant to Section 15061(b)(3)
(Common Sense Exemption) in that participation in the programs and acceptance the
grant would have no possibility of significant effects. Furthermore, the proposed uses of
grant funding for short-term rental assistance are consistent with the goals, programs
and policies set forth in the adopted and certified 6th Cycle Housing Element EIR,
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including Program 6.B, which commits the City to seek funding sources to support
households at risk of experiencing homelessness.
Past Council Actions
Meeting Date Description
10/14/22 City Council adopts the 6th Cycle 2021-2029 Housing
Element
2/28/23 City Council authorizes staff to apply for Prohousing
Designation and Round 1 PIP Grant program funding
Financial Impacts and Budget Actions
Staff seeks authority to apply for a grant from the Department of Housing and
Community Development’s Prohousing Incentive Program. If awarded, staff
recommends the following budget changes establishing the awarded revenue budget
and appropriate the corresponding expenditure budget to the Housing and Human
Services Department in the Miscellaneous Grant Fund. If renewals are awarded,
budget changes will be included in subsequent year budgets, contingent on Council
budget approval.
FY 2023-2024 Grant Budget Changes
Establish Revenue Budget Appropriate Funds
Account Number(s) Amount Account Number(s) Amount
TBD 1,000,000 TBD 1,000,000
Total 1,000,000 Total 1,000,000
Prepared By: Rachel Kwok, Environmental Planner
Approved
Forwarded to Council
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Attachments:
A. Reso-CDD-PIP Round 2 Application
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City Council Meeting: February 27, 2024 Santa Monica, California
RESOLUTION NUMBER _________ (CCS)
(City Council Series)
A RESOLUTION OF THE CITY COUNCIL OF THE CITY OF SANTA MONICA
AUTHORIZING THE CITY MANAGER TO SUBMIT AN APPLICATION FOR
AND ACCEPT RECEIPT OF PROHOUSING INCENTIVE PROGRAM FUNDS
WHEREAS, pursuant to Health and Safety Code 50470 et seq., the California
Department of Housing and Community Development (“Department”) is authorized to
issue Guidelines as part of an incentive program (hereinafter referred to by the
Department as the Prohousing Incentive Program or “PIP”); and
WHEREAS, the City Council of the City of Santa Monica desires to submit a PIP
grant application package (“Application”), on the forms provided by the Department, for
approval of grant funding for eligible activities toward planning and implementation
activities related to housing and community development as a result of meeting eligibility
criteria, including, but not limited to, Prohousing Designation; and
WHEREAS, the Department has issued Guidelines and Application on January 23,
2024, in the amount of Nine Million, Four Hundred Eighty-Three Thousand, Four Hundred
Two Dollars and Seventeen Cents ($9,483,402.17) for PIP.
NOW, THEREFORE, THE CITY COUNCIL OF THE CITY OF SANTA MONICA
DOES RESOLVE AS FOLLOWS:
SECTION 1. The City Manager, or designee, is hereby authorized and directed to
submit an Application to the Department in response to the Notice of Funding Availability,
and to apply for the PIP grant funds in a total amount not to exceed $1,000,000.
5.E.a
Packet Pg. 180 Attachment: Reso-CDD-PIP Round 2 Application [Revision 1] (6246 : Request to Authorize the City Manager to apply for the Prohousing
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SECTION 2. In connection with the PIP grant, if the Application is approved by the
Department, the City Manager of the City of Santa Monica, or designee, is authorized
and directed to enter into, execute, and deliver on behalf of the City, as the Applicant, a
State of California Agreement (“Standard Agreement”) for the amount of One Million
Dollars ($1,000,000), and any and all other documents required or deemed necessary or
appropriate to evidence and secure the PIP grant, the City’s obligations related thereto,
and all amendments thereto.
SECTION 3. The City, as the Applicant, shall be subject to the terms and
conditions as specified in the Guidelines, and the Standard Agreement provided by the
Department after approval. The Application and any and all accompanying documents
are incorporated in full as part of the Standard Agreement. Any and all activities funded,
information provided, and timelines represented in the Application will be enforceable
through the fully executed Standard Agreement. Pursuant to the Guidelines and in
conjunction with the terms of the Standard Agreement, the City hereby agrees to use the
funds for eligible uses and allowable expenditures in the manner presented and
specifically identified in the approved Application.
SECTION 4. The City Clerk shall certify to the adoption of this Resolution, and
thenceforth and thereafter the same shall be in full force and effect.
APPROVED AS TO FORM:
_________________________
DOUGLAS SLOAN
City Attorney
5.E.a
Packet Pg. 181 Attachment: Reso-CDD-PIP Round 2 Application [Revision 1] (6246 : Request to Authorize the City Manager to apply for the Prohousing