City of San JosÃ© - City of San Jose

City of San José Housing & Community Development Commission District 1— Vacant District 3— Barry Del Buono District 5— Ruben Navarro District 7— Melissa Medina District 9— Julie Quinn Mayor — Nhi Nguyen

(VC) Alex Shoor — District 2 Huy Tran — District 4 Andrea Wheeler — District 6 Lee Thompson — District 8 Michael Fitzgerald — District 10 Martha O’Connell — CAAC-MR (C) Mike Graves — CAAC ML *Commissioners are appointed by corresponding Council Members, but do not represent the Council District.

REGULAR MEETING AGENDA April 12, 2018

5:45PM I. II.

San José City Hall Wing Rooms 118-120

Call to Order & Orders of the Day Introductions

III.

Consent Calendar A. Approve the Minutes for the Special Meeting of March 22, 2018 ACTION: Approve the March 22, 2018 action minutes

IV.

Reports and Information Only A. Chair B. Director C. Council Liasion

V.

Old Business None

VI.

New Business A. Public Hearing on the 2017-18 Substantial Amendment to Annual Action Plan (K. Clements, Housing Department) ACTION: Hold a public hearing on the proposed Substantial Amendments to the Fiscal Year 2017-2018 Annual Action Plan to reallocate approximately $650,000 in grant funding and to allocate an additional $200,000 in grant funding, and recommend to the City Council approval of the proposed Substantial Amendment to the Fiscal Year 2017-2018 Annual Action Plan. B. Housing Element Annual Report (A. Marcus, Housing Department) ACTION: Information only C. Code for San José – Presentation on Rental Rights Mobile App and Website (Y. Choy, Code for San José) (No memo) ACTION: Information only

Housing & Community Development Commission Regular Meeting April 12, 2018 VII.

VIII.

IX.

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Open Forum (Members of the Public are invited to speak on any item that does not appear on today’s Agenda and that is within the subject matter jurisdiction of the Commission. Meeting attendees are usually given two (2) minutes to speak on any discussion item and/or during open forum; the time limit is in the discretion of the Chair of the meeting and may be limited when appropriate. Speakers using a translator will be given twice the time allotted to ensure non-English speakers receive the same opportunity to directly address the Commission.) Meeting Schedule The next Special meeting will be Thursday, May 10, 2018 at 5:45PM, in the San Jose City Hall Wing Rooms 118-120. Adjournment The City of San José is committed to open and honest government and strives to consistently meet the community’s expectations by providing excellent service, in a positive and timely manner, and in the full view of the public. You may speak to the Commission about any discussion item that is on the agenda, and you may also speak during Open Fourm on items that are not on the agenda and are within the subject matter jurisdiction of the Commission. Please be advised that, by law, the Commission is unable to discuss or take action on issues presented during Open Forum. Pursuant to Government Code Section 54954.2, no matter shall be acted upon by the Commission unless listed on the agenda, which has been posted not less than 72 hours prior to meeting. Agendas, Staff Reports and some associated documents for the Commission items may be viewed on the Internet at http://www.sanjoseca.gov/hcdc. Correspondence to the Housing & Community Development Commission are public record and will become part of the City’s electronic records, which are accessible through the City’s website. Before posting online, the following may be redacted: addresses, email addresses, social security numbers, phone numbers, and signatures. However, please note: e-mail addresses, names, addresses, and other contact information are not required, but if included in any communication to the Housing & Community Development Commission, will become part of the public record. If you do not want your contact information included in the public record, please do not include that information in your communication. All public records relating to an open session item on this agenda, which are not exempt from disclosure pursuant to the California Public Records Act, that are distributed to a majority of the legislative body will be available for public inspection at the Office of the City Clerk, 200 East Santa Clara Street, 14th Floor, San José, California 95113, at the same time that the public records are distributed or made available to the legislative body. Any draft resolutions or other items posted on the Internet site or distributed in advance of the commission meeting may not be the final documents approved by the commission. Contact the Office of the City Clerk for the final document. On occasion the Commission may consider agenda items out of order.

Housing & Community Development Commission Regular Meeting April 12, 2018

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The Housing & Community Development Commission meets every Second Thursday of each month (except for July and December) at 5:45pm, with special meetings as necessary. If you have any questions, please direct them to the Commission staff. Thank you for taking the time to attend today’s meeting. We look forward to seeing you at future meetings. To request an accommodation or alternative format under the Americans with Disabilities Act for City-sponsored meetings, events or printed materials, please call (408) 535-1260 as soon as possible, but at least three business days before the meeting. Please direct correspondence and questions to: City of San José Attn: Viviane Nguyen 200 East Santa Clara Street, 12th Floor San José, California 95113 Tel: (408) 975-4462 Email: [email protected] Para residentes que hablan español: Si desea mas información, favor de llamar a Theresa Ramos al 408-975-4475. Riêng đối với quí vị nói tiếng Việt : Muốn biết thêm chi-tiết, xin vui lòng tiếp xúc với Viviane Nguyen, Đ.T. 408-975-4462.

對於說華語的居民: 請電 408-975-4450 向 Ann Tu 詢問詳細事宜。說粵語的居民則請撥打 408-975-4425 與 Yen Tiet 聯絡。 Para sa mga residente na ang wika ay tagalog: Kung kinakailangan pa ninyo ng inpormasyon, tawagan si Shirlee Victorio sa 408-975-2649. Salamat Po.

HCDC AGENDA: 4-12-18 ITEM: III-A HOUSING & COMMUNITY DEVELOPMENT COMMISSION SPECIAL MEETING ACTION MINUTES MARCH 22, 2018 MEMBERS PRESENT:

MEMBERS ABSENT:

STAFF:

Mike Graves Alex Shoor Lee Thompson Martha O’Connell Andrea Wheeler Barry Del Buono Michael Fitzgerald Ruben Navarro Nhi Nguyen

Chair Vice Chair (Arrived 5:49 PM) Commissioner Commissioner Commissioner Commissioner Commissioner (Exited 7:35 PM) Commissioner Commissioner

Huy Tran Julie Quinn Melissa Medina

Commissioner Commissioner Commissioner

Viviane Nguyen Selena Copeland Charles Oshinuga Rachel VanderVeen Kristen Clements Helen Chapman

Housing Department Housing Department Housing Department Housing Department Housing Department Councilmember Jimenez’s Office

(I)

Call to Order/Orders of the Day – Chair Graves opened the meeting at 5:48 PM. Commissioner O’Connell recommended to change the Orders of the Day to consolidate agenda items VI-C, VI-D, and VI-E into one action item. Chair Graves accepted the recommendation.

(II)

Introductions – Commissioners, staff, and audience introduced themselves.

(III) Consent Calendar A. Approve the Minutes for the March 8, 2018 Regular Meeting: Amendment made by Commissioner Thompson to include VI-A failed motion to direct Housing staff to clarify and summarize legality of RUBS from 1979 onwards to City Council. Motion was made by Commissioner Wheeler, seconded by Chair Graves, but failed 6-6 by roll call vote. Yes: O’Connell, Graves, Medina, Nguyen, Fitzgerald, Wheeler No: Tran, Quinn, Thompson, Shoor, Navarro, Del Buono Amendment made by Commissioner O’Connell to amend VII Open Forum to replace Ms. Martha to Ms. O’Connell and amend her comment to “concerned about request for an authorization to speak to constituents was not on the agenda and thus preventered her

DRAFT from speaking as a commissioner.” The amendment was accepted by Commissioner Thompson. The amended motion was seconded by Chair Graves and passed unanimously (9-0). (IV) Reports and Information Only A. Chair – No update. B. Director’s Report – Ms. Clements provided an update on the Council actions from the March 18, 2018 City Council meeting regarding a proposed Opt-in Program and land use changes for mobilehome parks. She will send the County Board update on the Santa Clara County Housing Authority governance as requested. C. Council Liaison – Ms. Chapman provided an update about a current Request for Proposal (RFP) regarding safe parking homeless services. Ms. Clements provided an update about a current RFP for legal services. (V)

Old Business - None

(VI)

New Business A. Potential Amendment to the Tenant Protection Ordinance Regarding Criminal Activity (R. VanderVeen, Housing Department) ACTION: Accept the report and provide recommendations to staff on potentially amending the Tenant Protection Ordinance to Criminal Activity just cause: 1. Requires a conviction; 2. Crime committed on the premise; and 3. Crime includes felonies that involve a weapon, assault, battery, selling or manufacturing drugs, and a reference to the Regulations for other crimes. Commissioner Shoor made the motion to maintain the Tenant Protection Ordinance as written and reject staff recommendation with a second by Commissioner O’Connell. The motion passed by 8-1 by roll call vote. Yes: Thompson, O’Connell, Graves, Shoor, Nguyen, Del Buono, Navarro, Wheeler No: Fitzgerald Commissioner Wheeler made a motion that whereas the primary recommendation is no change to the Tenant Protection Ordinance and defer to the nuisance just cause reason, should a criminal activity reason be brought forward to City Council, alternative #2 is recommended to include conviction as a basis for eviction, with a second by Commissioner Thompson. The motion passed by 8-1 by roll call vote. Yes: Thompson, O’Connell, Shoor, Nguyen, Del Buono, Navarro, Wheeler, Fitzgerald No: Graves

DRAFT B. Amendments to Procedures for Removal of Rent Stabilized Units from the Rental Market (Ellis Act Ordinance) (R. VanderVeen, Housing Department) ACTION: Accept staff report and provide recommendations to staff on potential changes to the Ellis Act Ordinance, including: 1. Amending the re-control provisions to: a. Subject the greater of either 50% of new apartments built or the number of apartments removed from the market, to the Apartment Rent Ordinance (ARO); b. Allow an exemption from the re-control provisions if 20% of the new apartments are deed-restricted affordable apartments built onsite with 14% at 80% of the Area Median Income (AMI) and 6% at 50% AMI; 2. Include apartments with three units or more limiting the relocation payments to include the base assistance; and 3. Require apartments with three units or more built after 1979 to provide 120-day notification to their tenants and the City and offer relocation services to impacted tenants. Commissioner Shoor made a motion to approve Staff recommendation on (1)(a) and (b) increase 5% to 10% at 80% AMI, and (3) require 180 days’ notification if allowed, with a second by Commissioner Thompson. The motion passed by 5-3 by roll call vote. Yes: Thompson, Graves, Shoor, Del Buono, Wheeler No: O’Connell, Nguyen, Navarro C. Consideration of a request from Commissioner O’Connell for Commission authorization pursuant to Council Policy 0-4 Part IV to hold meetings during 2018 using her title as HCDC Mobilehome Park Resident Representative in order to obtain feedback from park residents on mobilehome park related matters and to provide a report back to the Commission after the conclusion of such meetings. (K. Clements, Housing Department) Commissioner O’Connell made a motion to approve Staff recommendation for all three items VI-C, VI-D, and VI-E and obtain clarification from the City Attorney’s Office on Council Policy 0-4 Part IV, with a second by Commissioner Wheeler. The motion passed unanimously. D. Consideration of a request from Chair Graves for Commission authorization pursuant to Council Policy 0-4 Part IV to hold meetings during 2018 using his title as HCDC Mobilehome Parks Owner Representative in order to obtain feedback from park owners on mobilehome park related matters and to provide a report back to the commission after the conclusion of such meetings. (K. Clements, Housing Department) E. Consideration of a request from Commissioner Fitzgerald for Commission authorization pursuant to Council Policy 0-4 Part IV to hold meetings during 2018 using his title as HCDC Apartment Rent Ordinance Landlords Representative in order to obtain feedback from landlords on Apartment Rent Ordnance related matters and to provide a

DRAFT report back to the commission after the conclusion of such meetings. (K. Clements, Housing Department) Commissioner O’Connell made a motion to agendize Council Policy 0-4 Part IV on using title as a representative as the first item at the next meeting on April 12, 2018, with a second by Chair Graves. The motion passed unanimously. F. Commission Workplan Ms. Clements gave an update that all of the planned agenda items on the Commission Workplan have been brought forth to the Commission for consideration to date, except consideration of the inclusion duplexes in the Tenant Protection Ordinance and Apartment Rent Ordinance. Ms. Nguyen will send three possible retreat dates on Saturdays in July/August as a poll to Commissioners to determine availability. (VII) Open Forum Commissioner Wheeler read “Robert’s Rules of Order” and explained that a call to end discussion must be seconded, debated as a motion, and get a 2/3 vote not majority or otherwise; else, debate continues. (VIII) Meeting Schedule The next meeting will be on Thursday, April 12, 2018 at 5:45 PM, in the San José City Hall Wing Rooms 118-120. (IX)

Adjournment Chair Graves adjourned the meeting at 8:54 PM.

HCDC AGENDA: 4-12-2018 ITEM: VI-A

TO: HOUSING AND COMMUNITY DEVELOPMENT COMMISSION SUBJECT: FY 2017-18 Annual Action Plan Substantial Amendment Approved

FROM: David Bopf DATE: April 5, 2018

Date

RECOMMENDATION The Housing and Community Development Commission hold a public hearing on the proposed Substantial Amendments to the Fiscal Year 2017-2018 Annual Action Plan to reallocate approximately $650,000 in grant funding and to allocate an additional $200,000 in grant funding, and recommend to the City Council approval of the proposed Substantial Amendment to the Fiscal Year 2017-2018 Annual Action Plan. OUTCOME Approval of this Substantial Amendment will enable the City to complete its programming for the use of CDBG funds in the federally-funded homeless services and community development programs for Fiscal Year (FY) 2017-18. BACKGROUND On June 20, 2017, the City Council approved the FY 2017-2018 Annual Action Plan for expenditure of the entitlement funds and competitive grants that the City receives from the U.S. Department of Housing and Community Development (HUD). Staff submitted the City Councilapproved Plan to HUD in June 2017, and HUD approved it in July 2017. The City's Annual Action Plan details its funding strategy for the Community Development Block Grant (CDBG), Emergency Solutions Grant (ESG), HOME Investment Partnership, and Housing Opportunities for People with AIDS (HOPWA) programs each year. Annual Action Plans implement a jurisdiction’s Five-Year Consolidated Plan and are developed through significant public input, analysis, and planning. The City’s Citizen Participation Plan (CPP) describes the efforts that the City will take to encourage its residents to participate in developing federal spending plans. It also provides requirements for public process when a “substantial amendment” to the Annual Action Plan is proposed. The following changes constitute a substantial amendment per the CPP, thereby

HOUSING AND COMMUNITY DEVELOPMENT COMMISSION Subject: 2017-2018 Annual Action Plan Substantial Amendment April 5, 2018 Page 2

requiring public notice and public hearing by HCDC and the City Council as described in the CPP: 1. Increases or decreases by the greater of $100,000 or a 25% change in the amount allocated to a category of funding; 2. A significant change to an activity’s proposed beneficiaries or persons served; or, 3. Funding of a new activity not previously described in the Action Plan. ANALYSIS Substantial Amendment is Required The proposed changes to the City's FY 2017-2018 Annual Action Plan qualify as a substantial amendment because they meet criteria 1 and 2 above. Therefore, this Substantial Amendment proposal is being brought to HCDC and to the City Council as required by the CPP. Public notices were published in five newspapers, both in English and in four foreign languages, 30 days in advance of the planned City Council meeting on May 1, 2018. Causes of the Need to Amend Managing expenditures of the City’s annual federally-funded budget often requires mid-year adjustments to accommodate expenditures that were slower than anticipated or the influx of loan repayments that were more than expected. Specifically, the proposed changes are primarily a result of the need to: 1. Reprogram $500,000 in CDBG Public Services. The 2017-18 Annual Action Plan anticipated $500,000 to be awarded and spent in FY 2017-18 through a new Request for Proposal for Legal Services. However, the Legal Services RFP was not able to be published until February 21, 2018, which did not give enough time to award and allow grantees to draw down the projected funds within the fiscal year. This change reduces CDBG for Legal Services for the current fiscal year from $530,000 to $30,000. (Note that award of the Legal Services RFP will continue to carry the full funding amount of $500,000, but expenditures will shift to the FY 2018-2019 Annual Action Plan.) Because of this large change within the Public Services category of expenditures, this action triggered the requirement for a substantial amendment process. 2. Reprogram $150,000 in committed CDBG Community Development Investment (CDI) funds. These CDI funds were programmed to be spent on several Place-based Street and Infrastructure Enhancements. These funds were not disbursed due to slower than anticipated predevelopment and construction progress on several multiple-year contracts. This reduces CDI expenditures in FY 2017-18 from $1,830,000 to $1,680,000. 3. Program an additional $200,000 of unanticipated CDBG Program Income. Program Income is derived from repayments of previously-funded loans, and staff’s annual estimates sometimes differ from actual repayments.


Process of Determining Proposed Changes To determine the reallocation of funding, staff issued a request to existing awardees for proposals on their capacity to spend additional funds before the end of FY 2017-18. Staff assessed awardees' current satisfactory performance, their demonstrated ability to meet identified performance goals, and their proposals for expanded program delivery. Based on this assessment, staff proposes the changes to existing Public Service and CDI awards that are expected to be able to spend down the reallocated funds by June 30, 2018. The changes are outlined in Attachment A and summarized below. Proposed Changes The following changes are included in the Substantial Amendment: Program Income The additional $200,000 in Program Income over the estimate for FY 2017-18 creates an adjustment in Program Income from $2,400,000 to $2,600,000. Total Estimated Resources The additional Program Income and correction of an inadvertent error changes the Total Estimated Resources for all federal funding from $12,239,506 to $24,439,506. Senior Services Funding will increase to the Health Trust and the Portuguese Organization for Social Services and Opportunities (POSSO) for meal and senior nutrition services by $53,000. The additional funding is expected to feed an additional 50 seniors. Neighborhood Engagement Funding will increase to Somos Mayfair for neighborhood engagement programs by $35,000. This increases overall funding for Neighborhood Engagement Programs from $200,000 to $235,000. The additional funds are expected to serve an additional 40 people in Somos Mayfair's Home Grown Talent program. Minor Home Repair Program Funding will increase for Minor Home Repair Programs by $265,000 from $1,250,000 to $1,515,000. The change will add $75,000 to the Habitat for Humanity contract and will add $190,000 to the Rebuilding Together contract. The additional funds are expected to enable repair services to an additional 30 households.


Homeless Outreach and Engagement Services Funding will increase by $114,000 to HomeFirst and PATH for outreach and engagement services, which is expected to serve an additional 50 homeless individuals. With this increase and the switch in sources below, the total CDBG to be spent for Homeless Programs is therefore increased from $350,000 to $694,000. Section 108 Loan Guarantee Funding will increase by $53,000 for Section 108 Loan Repayments from $1,885,865 to $2,038,865, as required for existing loans secured by CDBG. Funding Source Shifts CDBG funding will increase to the Silicon Valley Law Foundation from $300,000 to $368,000, and its HOME funding will commensurately decrease from $100,000 to $32,000. The overall funding amount remains unchanged. CDBG funds of $230,000 will increase for PATH homeless outreach services, and its funding from a non-federal funds source, the Housing Authority Litigation Award (HALA), will commensurately decrease. The overall amount of funding remains unchanged but the amount of federal funds is increased. This change allows more flexible HALA funds to be used for other purposes. Next Steps After the HCDC public hearing and recommendation, the City Council will hold a public hearing on May 1, 2018 and staff will seek approval from the City Council on these recommendations. Staff will then submit the Substantial Amendment and the record of public comments to HUD for approval. /s/ DAVID BOPF Deputy Director, Housing Department For questions, please contact Kristen Clements, Division Manager, by email [email protected] or phone (408) 535-8236. Attachment A: Substantial Amendment to the FY 2017-2018 Annual Action Plan

ATTACHMENT A

City of San José Substantial Amendment to the 2017-2018 Annual Action Plan Background The City of San José’s federal Annual Action Plan details the funding strategy for the Community Development Block Grant (CDBG), Emergency Solutions Grant (ESG), HOME Investment Partnership, and Housing Opportunities for People with AIDS (HOPWA) programs each year. These Annual Action Plans implement a jurisdiction’s Five-Year Consolidated Plan and are developed through significant public input, analyses, and planning. The City’s Citizen Participation Plan (CPP) describes the efforts that the City will take to encourage its residents to participate in developing these plans. It also provides requirements for public process when a “substantial amendment” to the Annual Action Plan is proposed. The following changes constitute a substantial amendment and require public notice as described in the CPP: • Increases or decreases by the greater of $100,000 or a 25% change in the amount allocated to a category of funding • A significant change to an activity’s proposed beneficiaries or persons served • Funding of a new activity not previously described in the Action Plan Proposed Substantial Amendment The City is proposing the following amendments to the 2017-2018 Annual Action Plan in order to reprogram funds from projects/activities that did not move forward, and to program extra Program Income funds that were received. Each project listed below references the project number in AP-35 – 91.220(d) Table 11 - Project Information, AP-38 Project Summary Table 12 – Project Summary, and corresponding tables throughout the Annual Action Plan have been updated: 1. Increase CDBG’s “Estimated Program Income” from $2,400,000 to $2,600,00. This will also change the “Total Estimated Resources” for CDBG from $12,872,038 to $13,072,038, and the overall “Total Estimated Resources” for all federal funding to $24,439,506 (first found on page 32, Table 4 “FY 2017-18 Summary of Funding”). 2. Increase CDBG funding for Law Foundation from $300,000 to $368,000; AND, decrease HOME funding for Law Foundation from $100,000 to $32,000. The overall contract with the Law Foundation will not be increased. 3. Increase funding for Neighborhood Engagement Programs from $200,000 to $235,000. • Increasing funding to Somos Mayfair by $35,000.

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4. Increase funding for Homeless Programs from $350,000 to $694,000. • Increase funding to HomeFirst Services of Santa Clara County by $114,000 • Provide $230,000 of CDBG funds to PATH. These funds will replace Housing Authority Litigation Award (HALA). 5. Reduce funding for Legal Services for Low-Income Tenants from $530,000 to $30,000. The RFP for new Legal Services for FY17-18 could not be released until February 21,2018; thus the 2017 funding of $500,000 was reprogrammed to other public service activities. 6. Decrease funding for Place-Based Street and Infrastructure Enhancements, from $1,830,000 to $1,680,000. 7. Increase funding for the Minor Repair from $1,250,000 to $1,515,000. • Additional $75,000 for Habitat for Humanity. • Additional $190,000 for Rebuilding Together. 8. Increase funding for Section 108 Loan Repayments from $1,885,865 to $2,038,865. In addition to the above substantial amendment changes, the AAP has been updated to reflect the following changes: 1. Estimated FY 2017-18 Program Income has been adjusted from $2,400,000 to $2,600,000. 2. Change in Total Estimated Resources from $12,239,506 (error in original AAP) to $24,439,506. Analysis This proposal qualifies as a substantial amendment because it meets two of the three criteria: • A significant change to an activity’s proposed beneficiaries or persons served • Change in funding amount: Several of the project funding updates exceed the threshold level. Changes to the 2017-2018 Annual Action Plan are primarily a result of: 1. The reprogramming of $500,000 for Legal Services. The Legal Services RFP was not able to be published until February 21, 2018 not giving enough time to draw down funds in FY2017-2018. 2. Programming additional $200,000 of unanticipated Program Income. 3. The reprogramming of $150,000 of CDI funds that were not funded. Senior Services The additional $53,000 will provide services to an additional 50 people using Meals on Wheels (The Health Trust), and Senior Nutrition & Wellness (POSSO).

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Neighborhood Engagement The additional $35,000 will provide services to an additional 40 people in the Home Grown Talent program (Somos Mayfair). Minor Home Repair Program The additional $265,000 will provide services to an additional 30 households through Rebuilding Together, Silicon Valley, and Habitat for Humanity. Homeless Services The additional $344,000 will provide services to an additional 50 homeless individuals through HomeFirst and PATH outreach and engagement services. Public Process The City of San José provided a public notice in five newspapers as part of the CPP requirements. Additionally, two public hearings will be held to provide opportunities for public comment: • April 12, 2018 - Housing & Community Development Commission Meeting, 5:45pm, Wing Rooms 118-120 • May 1, 2018 - City Council consideration of Substantial Amendment adoption, 1:30pm, Council Chambers (Please review Council Meeting agenda when available to confirm item number) Comments may also be provided to Kristen Clements by email ([email protected]) or phone (408-535-8236), or in writing addressed to: City of San José Housing Department 200 E. Santa Clara Street, 12th Floor San José, CA 95113

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1. On page 32 of the approved 2017-2018 Annual Action Plan, amend Introduction and amend Table 4 – FY 2017-18 Summary of Funding as follows: (additions or deletions):

Expected Resources AP-15 Expected Resources – 91.220(c) (1, 2) Introduction The City of San José’s (City) Fiscal Year (FY) 2017-18 Action Plan covers the time period from July 1, 2017 to June 30 2018 (HUD Program Year 2017). The City Fiscal Year (FY) 2017-2018 entitlement amount is $12,463,415 $12,463,415. While HUD allocations are critical, they are not sufficient to overcome all barriers and address all needs that low-income individuals and families face in attaining self-sufficiency. The City will continue to leverage additional resources to successfully provide support and services to the populations in need. The FY 2017-2018 allocation amount for each of the federal housing and community development programs is broken down as follows: •

Community Development Block Grant (CDBG) - $8,196,038

•

HOME Investment Partnerships Program (HOME) - $2,512,787

•

Housing Opportunities for Persons with AIDS (HOPWA) - $999,261

•

Emergency Services Grant (ESG) - $755,329

In addition to the FY 2017-2018 allocation for CDBG and HOME, total program resources for the two programs will be higher than the allocation amount due to estimated program income (e.g., repayments of federally funded loans) and prior year balance. The prior year’s CDBG balance consists of unused balances from previous year’s projects. The “Prior Year Balance” of HOME funds consists of previous year’s funds that were left uncommitted, funds committed to the Tenant Based Rental Assistance (TBRA) program that were unspent (which will be rolled over into the new program year), program income, and CHDO funds set-aside but not committed to a specific project. The prior year balance in the HOPWA program consists of unused funds from previous year projects. Table 1 – FY 2017-18 Summary of Funding 2017-18 Funding Allocation

Total CDBG Total HOME Total HOPWA Total ESG TOTAL

$8,196,038 $2,512,787 $999,261 $755,329 $12,463,415

Prior Year Balance

$2,276,000 $6,950,091 $150,000

$0 $9,376,091

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Estimated FY 2017-18 Program Income

Total Estimated Resources

$2,400,000 $2,600,000 $0 $0 $0 $2,400,000 $2,600,000

$12,872,038 $13,072,038 $9,462,878 $1,149,261 $755,329 $12,239,506 $24,439,506

2. On page 33 of the approved 2017-2018 Annual Action Plan, amend Table 5 – Fiscal Year 2017-2018 CDBG Budget Priorities as follows (additions or deletions): Table 2 - Fiscal Year 2017-2018 CDBG Budget Priorities CDBG Fiscal Year 2017-2018 Annual Budgetary Priorities FY 2017-2018 Budget

$12,871,038 $13,072,038

Administration (includes City grant administrative costs and fair housing activities) Public Services Program

$2,014,106 $1,280,000 $1,212,000

Neighborhood Engagement Program Homeless Programs Senior Programs Legal Services for LI Tenants

$7,692,067 $7,807,067

Community Development Improvement Program

$200,000 $235,000 $350,000 $694,000 $200,000 $253,000 $530,000 $30,000

Place Based Projects (pedestrian safety improvements, green alleyway improvement, ADA Curb Ramps, Lighting Improvements)

$1,830,000 $1,680,000

Targeted Code Enforcement

$1,085,119

Minor Repair Job Training

$1,250,000 $1,515,000 $500,000

Non-profit Facility Rehab

$3,026,948

Section 108 Repayments

$1,885,865 $2,038,865

Total

$12,872,038 $13,072,038

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3. On pages 36 of the approved 2017-2018 Annual Action Plan, amend Table 9 – Expected Resources – Priority Table as follows (additions or deletions): Table 3 - Expected Resources – Priority Table Program

Uses of Funds

Source of Funds

Expected Amount Available Year 3 Annual Allocation: $

Program Income: $

Prior Year Resources: $

Total: $

Expected Amount Available Remainder of ConPlan

Narrative Description

$ CDBG

Public Federal

• • • • • •

Admin and Planning Acquisition Economic Development Housing Public Improvements Public Service

$8,196,038

$2,400,000

$2,276,000

$2,600,000

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$12,872,038

$9,145,528

$13,072,038

$9,346,528

This program funds various nonprofit agencies and other city departments to implement services that benefit low- and moderateincome persons and neighborhoods or address community and economic development needs.

4. On pages 44-45 of the approved 2017-2018 Annual Action Plan, amend Table 10 – Goals Summary (One Year) as follows (additions or deletions): Table 4 – Goals Summary (One Year) Sort Order 1

2

Goal Name Increase & Preserve Affordable Housing Opportunities Respond to Homelessness and Its Impacts on the Community

Start Year 2017

End Year 2018

2017

2018

Category

Geographic Area N/A

Needs Addressed Affordable Housing

• Homeless

N/A

Homelessness

• Affordable Housing

3

Strengthen Neighborhoods

2017

2018

• Non-Housing Community Development NonHomeless Special Needs

N/A

Strengthening Neighborhoods

4

Promote Fair Housing Choice

2017

2018

• Non-Housing Community Development

N/A

Fair Housing

Funding HOME: $6,712,878 HOPWA: $1,123,261

• HOME Rental Units Constructed = 50 housing units • Tenant-Based Rental Assistance/Rapid Re-housing = 90 households assisted

CDBG: $350,000 $694,000 HOME: $2,400,000 ESG: $755,329 CDBG: $8,622,067 $8,325,067

• Homeless overnight shelter = 250 persons assisted • HOME Tenant-Based Rental Assistance/Rapid Re-housing = 150 households assisted • Other – Outreach Contacts = 700 800persons assisted

CDBG: $300,000 $368,000 HOME: $100,000 $32,000

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Goal Outcome Indicator

• Public service activities other than LMI Housing Benefit = 450 490 persons assisted • Jobs created = 10 jobs • Housing code enforcement/Foreclosed property care = 775 housing units • Homeowner housing rehabilitated = 250 280 housing units • Public Facility or Infrastructure Activities other than Low/Moderate Income Housing Benefit = 21,000 16,000 • Public service activities other than LMI Housing Benefit = 220 persons assisted.

5. On pages 50-65 of the approved 2017-2018 Annual Action Plan, amend Table 12 – Project Summary as follows (additions or deletions): Table 5 – Project Summary Project Name

Target Area N/A

Needs Addressed

1

Senior Services

2

Neighborhood Engagement

N/A

• Strengthening Neighborhoods

3

Legal Services for LI Tenants

N/A


4

Job Training for Unhoused Individuals

N/A

5

Place Based Street and Infrastructure Enhancements Targeted Code Enforcement Minor Home Repair Program

N/A

• Strengthening Neighborhoods • Homelessness • Strengthening Neighborhoods

HOPWA – The Health Trust HOPWA – San Benito County Rental Housing Development HOME TBRA

N/A

N/A

• Affordable Housing • Affordable Housing • Affordable Housing • Homelessness

12

Services for Homeless and Unhoused Populations (CDBG)

N/A

• Homelessness

13

N/A

• Homelessness

14

Homeless Services (ESG17 City of San José) Fair Housing

N/A

• Fair Housing

15

Non-profit Facility Rehab

N/A

• Homelessness • Strengthening Neighborhoods

6 7 8 9 10 11

N/A N/A

N/A N/A


• Strengthening Neighborhoods • Strengthening Neighborhoods

-8-

Funding

GOI

CDBG: $200,000 $253,000 CDBG: $200,000 $235,000 CDBG: $530,000 $30,000 CDBG: $500,000

200 250 persons assisted

CDBG: $1,830,000 $1,680,000 CDBG: $1,085,119

20,000 15,000 persons assisted

CDBG: $1,250,000 $1,515,000 HOPWA: $1,073,261 HOPWA: $50,000 HOME $6,712,878 HOME: $2,400,000 CDBG: $350,000 $694,000

250 280 housing units

ESG: $755,329 CDBG: $300,000 $368,000 HOME: $100,000 $32,000 CDBG $3,026,948

250 290 persons assisted 300 15 persons assisted 10 Jobs created

775 housing units

105 persons assisted 5 persons assisted 50 housing units 100 persons assisted 150 200 persons assisted 700 800 outreach contacts 150 persons assisted 700 outreach contacts 220 persons assisted

1,000 persons assisted

16

Section 108 Repayment

N/A

• N/A

17

CDBG Administration and Monitoring

N/A

• N/A

18

HOME Administration and Monitoring

N/A

• N/A

19

HOPWA Administration and Monitoring

N/A

• N/A

CDBG: $1,885,865 $2,038,865 CDBG: $1,714,106 $1,646,106 HOME: $250,000 $318,000 HOPWA: $26,000

-9-

N/A N/A N/A N/A

1

Project Name

Senior Services

Target Area

N/A

Goals Supported


Needs Addressed


Funding

CDBG: $200,000 $253,000

Description

This project will provide community-based services – including Meals on Wheels and the Senior Nutrition and Wellness - to San José’s lowincome seniors in order to improve health and quality of life, prevent or reduce their isolation and depression, and/or increase their housing stability improving their opportunities to age in place.

Target Date

06/30/2018

Estimate the number and type of families that will benefit from the proposed activities

200 250 low-income seniors

Location Description

City-wide (service locations vary)

Planned Activities

Meals on Wheels – The Health Trust Senior Nutrition and Wellness - POSSO

2

Project Name

Neighborhood Engagement

Target Area

N/A

Goals Supported


Needs Addressed


Funding

CDBG: $200,000 $235,000 The goal of the Neighborhood Engagement program is to increase social capital (i.e., a form of economic and/or cultural capital in which social networks are essential components to community growth) in San José neighborhoods, increase community engagement and cohesion, build the capacity of local organizations, pilot solutions to solve neighborhood level problems, and develop leadership skills of residents to promote, support, and sustain civic engagement by residents that are typically underrepresented in city governance and civic processes. This work will build upon the previous successes of the Strong Neighborhoods Initiative and the work of the Housing Department’s Place Based Initiative.  

Description

Target Date

06/30/2018


250 290 low-income residents


East San José and Central San José

Planned Activities

Somos Mayfair – Home Grown Talent CommUniverCity – Community Leadership Program

- 10 -

3

Project Name

Legal Services for LI Tenants

Target Area

N/A

Goals Supported


Needs Addressed


Funding

CDBG: $530,000 $30,000 The goal of the Legal Services for LI Tenants is to increase housing stability by providing landlord/tenant counseling, education, referrals, and legal assistance to tenants facing unlawful evictions or other landlord/tenant issues. These services will include additional outreach and education to low income tenants Citywide.

Description

4

Target Date

06/30/2018


300 15 low-income residents


TBD – RFP to be issued.

Planned Activities

TBD – Agencies to be selected from RFP.

Project Name

Job Training

Target Area

N/A

Goals Supported

Strengthening Neighborhoods and/or Respond to Homelessness and Its Impacts on the Community

Needs Addressed

Strengthening Neighborhoods and/or Respond to Homelessness and Its Impacts on the Community

Funding

CDBG: $500,000 The program will support job training for low income individuals, focused on homeless individuals and/or youth/young adults (ages 16-24). Community outreach related to the Annual Action Plan highlighted a community need for job training, especially for unhoused individuals and youth/young adults. This program must meet the national objective of low/moderate job creation and retention (LMJ) as well as the required Public Benefit Standards Activities must create or retain permanent jobs to be made available or held by low/moderate income persons. This requirement is met when job training participants are placed in permanent jobs. In addition, in order to be eligible for CDBG funding the job training must be tied to assistance to for-profit businesses. Non-profit entities, including Community Based Development Organizations, are eligible to apply.

Description

Target Date

06/30/2018


10 jobs created


1671 The Alameda #306

- 11 -

San Jose, CA 95126

5

Planned Activities

Downtown Streets Team

Project Name

Place-Based Street and Infrastructure Enhancements

Target Area

N/A

Goals Supported


Needs Addressed


Funding

CDBG: $1,830,000 $1,680,000 CDBG funds will be used to support street and pedestrian safety improvements in low-moderate Income areas. This may include enhanced pedestrian crosswalks to increase pedestrian visibility to motorists, reduce conflicts between modes of transportation, and shorten crossing distances. Improvements may include adding and improving sidewalk ramps, installing high-visibility crosswalks with flashing beacons, adding signage and high visibility roadway markings, repair damaged sidewalks, and improving functionality of intersections. All approved projects will be located in low-income areas and are not included in the City’s budget for capital improvements.

Description

Additionally, this project will include support for alleyway improvements in low income neighborhoods. The poor condition of deteriorated alleyways has been an ongoing concern of the neighborhood residents. Several alleyways are unpaved or have deteriorating pavement, creating a rough roadbed and flooding in storms. The improvements will provide a reliable roadway surface, ensuring safe access for residents, improving accessibility, improved storm water management and raising awareness of storm water issues. This project will also support additional improvements at the King Road and San Antonio intersection to improve Pedestrian Safety and Accessibility. The project, originally funded in FY 15-16, involved improving the southern portion of the intersection and the additional funds will expand the project to improve the northern side of the intersection as well. Lastly, this project will support lighting and pedestrian safety improvements on Evans Lane, where a supportive housing project will be under developments soon. Target Date

06/30/2018


20,000 15,000 low and moderate-income households


TBD

Planned Activities

TBD

- 12 -

6

Project Name

Targeted Code Enforcement

Target Area

N/A

Goals Supported


Needs Addressed


Funding

CDBG: $1,085,119 Code Enforcement activities will be conducted in low-income, residential neighborhoods that meet the City’s definition of “Deteriorated/Deteriorating Areas”. Code Enforcement’s focus will be primarily on the inspections of multi-family units, with ancillary

Description

7

Target Date

06/30/2018


775 households in place-based neighborhoods


Santee, Mayfair, Five Wounds/Brookwood Terrace, and additional hotspots identified through the Mayor’s Gang Prevention Task Force

Planned Activities

Place-based Code Enforcement

Project Name

Minor Home Repair Program

Target Area

N/A

Goals Supported


Needs Addressed


Funding

CDBG: $1,250,000 $1,515,000 This program will repair housing units to address immediate health and safety needs for extremely low-income homeowners in San José. The focus of repairs will address emergency and critical repair needs, as well as accessibility and mobility needs within the home.

Description

The program also includes funding for limited rehabilitation to address more substantial safety issues in the home to ensure safe, affordable, decent living environment for the occupants. Target Date

06/30/2018


250 280 extremely low-income homeowners


Citywide

Planned Activities

Rebuilding Together Habitat for Humanity

- 13 -

8

Project Name

HOPWA – Santa Clara County

Target Area

N/A

Goals Supported

Affordable Housing

Needs Addressed

Affordable Housing

Funding

HOPWA: $1,073,261 The program will provide rent subsidies, permanent housing placement assistance, and supportive services to help low-income residents living with HIV/AIDS secure and maintain housing. Housing placement assistance includes working with an placement specialist and receiving security deposit assistance. Supportive services include medical and housing case management and self-sufficiency services.

Description

Target Date

06/30/2018


105 low-income individuals living with HIV/AIDS


Santa Clara County

Planned Activities

9

• • • •

Supportive Services TBRA Permanent Supportive Housing Administration

Project Name

HOPWA – San Benito County

Target Area

N/A

Goals Supported

Affordable Housing

Needs Addressed

Affordable Housing

Funding Description

HOPWA: $50,000 The City’s HOPWA entitlement grant to San Benito County will provide housing placement assistance, rental subsidies, and nutritional and dental assistance to low-income clients living with HIV/AIDS.

Target Date

06/30/2018


5 low-income individuals living with HIV/AIDS


San Benito County

Planned Activities

• • • •

Housing Placement Supportive Services TBRA Administration

- 14 -

10

Project Name

Rental Housing Development

Target Area

N/A

Goals Supported

Affordable Housing

Needs Addressed

Affordable Housing

Funding

HOME: $6,712,878 Consistent with the City’s goal to assist in the creation and preservation of affordable housing for low income households, the City has the option to use HOME funds for new construction of Rental Housing Development and/or Rehabilitation of existing Multi-family units.

Description

HUD requires that at least 15 percent of each year’s HOME allocations be set aside for Community Housing Developers (CHDOs). This requirement will be met through the rental housing development activity. At least $376,919 of the rental development activity funds will be committed to a CHDO developer within 24-months, as required by HOME regulations. For any HOME funds used to develop new housing units, the City will comply with the Federal Fair Housing Act and Section 504 of the Rehabilitation Act of 1973. Participation in the HOME Program will enhance the City’s funding sources for new construction, while at the same time providing flexibility in the use of funds for an overall gapfinancing program.

11

Target Date

06/30/2018


50 low-and moderate-income households


TBD

Planned Activities

TBD

Project Name

HOME Tenant Based Rental Assistance

Target Area

N/A

Goals Supported

Homelessness

Needs Addressed

Homelessness

Funding

HOME: $2,400,000

Description

Consistent with the City’s goal to assist in the creation and preservation of affordable housing for low-income households, the City will use HOME funds to provide tenant-based rental subsidies targeting employable homeless individuals and families. The City will contract with three (3) agencies to provide intensive case management services (funded with City General Funds) for TBRA clients. The program’s goal is to transition participants out of homelessness, and improve their long-term self-sufficiency.

Target Date

06/30/2018

- 15 -

12


100 homeless individuals/families


TBD

Planned Activities

Agency(s) will be selected from Request for Proposals released in Spring 2017.

Project Name

Services for Homeless and Unhoused Populations (CDBG)

Target Area

N/A

Goals Supported

Homelessness

Needs Addressed

Homelessness

Funding

CDBG: $350,000 $694,000 The City will utilize CDBG funds to support a Citywide Homeless Outreach, Engagement, and Shelter program. The program will focus on utilizing an integrated approach to provide a comprehensive response to addressing chronic homelessness in the City. Activities may include street outreach, emergency shelter operations, and rapid re-housing services for the chronic homeless population. The City will contract with HomeFirst Services of Santa Clara County to provide these services. CDBG funds will be utilized to support shelter or outreach services.

Description

Target Date

06/30/2018


150 200 unduplicated homeless individuals will be provided shelter services


Citywide HomeFirst - Homeless Outreach and Engagement PATH – Homeless Outreach and Engagement

Planned Activities 13

Project Name

ESG17 City of San José

Target Area

N/A

Goals Supported

Homelessness

Needs Addressed

Homelessness

Funding

ESG: $755,329 The City will utilize ESG funds to support a Homeless Outreach and Engagement program as well as a Supportive Services and Rapid Rehousing Program for homeless individuals and families.

Description

The Homeless Outreach and Engagement Program will focus on utilizing an integrated approach to provide a comprehensive response to addressing chronic homelessness in the City. The City will contract with HomeFirst to provide the Outreach and Engagement services. This program is combined with the CDBG Homeless Outreach, Engagement, and Shelter program.

- 16 -

The Supportive Services and Rapid Re-housing Program for Unsheltered Populations will utilize an integrated approach to provide shelter, interim housing, case management services, deposit/rental assistance, and other eligible services as needed. The City will contract with Bill Wilson Center, the lead agency in a consortium of homeless and domestic violence service providers to provide these services. ESG funds will be used to support the administration of the ESG program by the City’s Housing Department. ESG Allocations by Component Outreach = $260,000 Shelter = $76,550 Rapid Rehousing = $363,450 Administration = $55,729

14

Target Date

06/30/2018


100 unduplicated homeless individuals will be provided shelter services


Citywide

Planned Activities

•

Emergency Shelter

•

Homeless Outreach

•

Rapid Re-housing

•

Administration

700 outreach contacts will be made with homeless individuals 50 homeless individuals/families will receive rapid re-housing services (deposit/rental assistance)

Project Name

Fair Housing

Target Area

N/A

Goals Supported

Fair Housing

Needs Addressed

Fair Housing

Funding

CDBG: $300,000 $368,000

Description

Target Date

HOME: $100,000 $32,000 The City will continue to program some of its CDBG Administrative funds as well as some public service funds, and HOME Administrative Funds to support an agency(s) that will provide Fair Housing services. Services may include: outreach and education on fair housing issues; conducting fair housing testing; enforcing fair housing laws through litigation; and providing technical assistance to the Housing Department on how to monitor City-financed developments for fair housing compliance. The City will contract with a consortium of four agencies to provide these services, with the Law Foundation of Silicon Valley serving as the consortium lead. 06/30/2018

- 17 -

15


220 individuals/families


Various locations

Planned Activities

The Law Foundation Fair Housing Project

Project Name

Non-profit Facility Rehabilitation

Target Area

N/A

Goals Supported

Homelessness Strengthening Neighborhoods

Needs Addressed

Homelessness Strengthening Neighborhoods

Funding Description

CDBG: $3,026,948 CDBG funds will be used to support the Bill Wilson Center Rehabilitation project, originally funded in the FY14-15 Annual Action Plan. Funds will rehabilitate the homeless drop-in center, which includes three buildings on the corner of South 2nd and Margaret Street. Additionally, the City will issue a Request for Proposals (RFP) for nonprofit facility rehabilitation. Projects selected will be aligned with the 5year goals in the Consolidated Plan.

Target Date

06/30/2020


1,000 individuals/families


691 South 2nd Street, San José, CA 693 South 2nd Street, San José, CA 10 Margaret Street, San José, CA Additional locations TBD

Planned Activities

Bill Wilson Center Rehabilitation Additional Activities TBD

16

Project Name

Section 108 Loan Repayment

Target Area

N/A

Goals Supported

N/A

Needs Addressed

N/A

Funding

CDBG: $1,885,865 $2,038,865 The former Redevelopment Agency (RDA) borrowed funds under the Section 108 program intending to make amortized payments on the three loans from its share of the redevelopment tax increment. With the dissolution of RDAs statewide and the tax increment to cover all of the

Description

- 18 -

former Redevelopment Agency’s enforceable obligations, another source of funding is necessary to take on that debt service. Since the City’s General Fund is experiencing its own revenue shortfalls, CDBG funds are utilized to cover the debt service obligation. Of the three Section 108 loans, the proceeds from one were loaned by the Agency to developers who are making repayments; proceeds from the other two were disbursed to developers in the form of grants. In FY 2017-2018 the City will partially offset the Section 108 loan payment with $1,885,865 in loan repayments paid by those developers who were loaned, not granted, Section 108 loan proceeds.

17

Target Date

06/30/2018


N/A


N/A

Planned Activities

Section 108 Repayment

Project Name

CDBG Administration and Monitoring

Target Area

N/A

Goals Supported

N/A

Needs Addressed

N/A

Funding

CDBG: $1,714,106 $1,646,106 A portion of the CDBG grant allocation will be used for reasonable planning and administrative costs associated with the administration of the CDBG funds and other related federal requirements. Administration funds will support oversight activities of the housing department, legal services from the City Attorney’s Office, and environmental reviews.

Description

Target Date

06/30/2018


N/A


200 E. Santa Clara Street San José, CA 95113

Planned Activities

CDBG Planning and Administration

- 19 -

18

Project Name

HOME Administration and Monitoring

Target Area

N/A

Goals Supported

N/A

Needs Addressed

N/A

Funding

HOME: $250,000 $318,000 Up to 10 percent of the total HOME grant allocation will be used for reasonable planning and administrative costs associated with the administration of the HOME funds and other related federal requirements.

Description

19

Target Date

06/30/2018


N/A



Planned Activities

HOME Planning and Administration

Project Name

HOPWA Administration and Monitoring

Target Area

N/A

Goals Supported

N/A

Needs Addressed

N/A

Funding Description

HOPWA: $26,000 The City will allocate $25,500 (approximately 3 percent of the entitlement grant) to administrative costs associated with managing with the HOPWA grant.

Target Date

06/30/2018


N/A



Planned Activities

HOPWA Administration

- 20 -

6. On page 84 of the approved 2017-2018 Annual Action Plan, amend the estimated CDBG Program Income in section AP-90, as follows (additions or deletions): Community Development Block Grant Program (CDBG) Reference 24 CFR 91.220(l) (1) 1. The total amount of program income that will have been received before the start of the next program year and that has not yet been reprogrammed 2. The amount of proceeds from section 108 loan guarantees that will be used during the year to address the priority needs and specific objectives identified in the grantee's strategic plan 3. The amount of surplus funds from urban renewal settlements 4. The amount of any grant funds returned to the line of credit for which the planned use has not been included in a prior statement or plan 5. The amount of income from float-funded activities Total Program Income

- - - - END OF ANNUAL ACTION PLAN AMENDMENT - - - -

- 21 -

$2,400,000 $2,600,000 $0 $0 $0 $0 $2,400,000 $2,600,000

HCDC AGENDA: 4-12-18 ITEM: VI-B

COUNCIL AGENDA: FILE: ITEM: CITY OF Sr

3/20/2018 18-341 4.2

SSt

san Jose

Memorandum

CAPITAL OF SILICON VALLEY

TO: HONORABLE MAYOR AND CITY COUNCIL SUBJECT: SEE BELOW Approved

FROM: Rosalynn Hughey Jacky Morales-Ferrand DATE: March 7, 2018

3|a/ie

SUBJECT: ACCEPTANCE OF THE ANNUAL PROGRESS REPORT ON THE IMPLEMENTATION OF THE SAN JOSE GENERAL PLAN HOUSING ELEMENT AND THE HOUSING SUCCESSOR AGENCY ANNUAL REPORT

RECOMMENDATION (a) Accept the Calendar Year (CY) 2017 Annual Progress Report on the Implementation of the San Jose 2014-23 Housing Element. (b) Accept the Fiscal Year 2016-17 Housing Successor to Redevelopment Agency Annual Report. OUTCOME Following the passage of Assembly Bill 879 (Grayson), Charter cities are now required to submit an annual housing element report to the State. The City Council’s acceptance of the Annual Progress Report is required prior to submitting the report to the California Department of Housing and Community Development (HCD) and the Governor’s Office of Planning and Research (OPR). In addition, maintaining a housing element that complies with HCD’s reporting requirements allows the City to remain eligible for important State and regional funding.

EXECUTIVE SUMMARY State law requires jurisdictions to prepare an annual progress report each calendar year to detail the implementation of their Housing Element and to submit it to HCD and the Governor’s Office of Planning and Research (OPR). Maintaining a housing element that complies with HCD’s reporting requirements qualifies jurisdictions for State funding programs. The Housing Element establishes comprehensive goals to meet a jurisdiction’s share of Regional Housing Needs Allocation (RHNA). San Jose’s RHNA for the current 8.8-year projection

HONORABLE MAYOR AND CITY COUNCIL March 7, 2018 Subject: Acceptance of Annual Progress Report on Housing Element and Successor Agency Annual Report Page 2

period from January 2014 through October 2022 is 35,080 housing units. This equates to an annual production rate of 3,986 units. A large portion of San José’s current RHNA goal (42%) consists of homes that are affordable for Extremely-Low Income (ELI), Very-Low (VLI) Income, and Low Income (LI) households as defined by HCD. In calendar year 2017, the City issued building permits for 3,097 new residential units, a 48% jump since 2016. This includes 2,622 market-rate units (162% of the annualized goal) and 475 affordable units (20% of the annualized goal). During the first four years of the 8.8-year RHNA projection period, the City has met 33% of its cumulative housing goal. By income category, the City has met 72% of its market rate housing goal and 7% of its affordable housing goal to date. The Housing Department intends to bring a five-year Affordable Housing Investment Plan to City Council in Spring 2018. This report will detail the City’s affordable housing pipeline and estimate the amount of federal, state, regional, and local funding that will be available for the construction of affordable housing in San José during this period. The Housing Successor to Redevelopment Agency Annual Report for Fiscal Year 2016-17 is required to be submitted with the Annual Housing Element Progress Report. The report provides information on the Low and Moderate Income Housing Asset Fund (LMIHAF). The Successor Agency has addressed the expenditure tests as required in the Report.

BACKGROUND The Housing Element establishes a comprehensive policy framework to implement San José’s residential strategies. The Housing Element outlines the City’s plan to meet its affordable and market rate housing production goals also referred to as the Regional Housing Needs Allocation (RHNA). The determination of regional housing need is completed by HCD, the California Department of Finance (DOF) and regional Councils of Government (COGs). The State agencies calculate statewide housing needs based upon population projections and regional population forecasts used in preparing regional transportation plans. The Statewide need is then distributed to regional COGs throughout California, who work with cities and counties within their purview to assign each jurisdiction its share of the RHNA. The City of San José is a member of the Association of Bay Area Governments (ABAG), the Bay Area’s COG, which is composed of nine counties and 101 cities. ABAG is responsible for distributing the RHNA to the Bay Area local governments through an allocation methodology that is consistent with development and growth patterns. San José’s RHNA for the current 8.8year projection period from January 2014 through October 2022 is 35,080 housing units. This equates to an annual production rate of 3,986 units. (This is slightly higher than the previous 2007-14 RHNA cycle allocation of 34,721 units.) The RHNA itself is divided into five income categories that encompass all levels of housing need. A large portion of San José’s current RHNA goal (42%) is focused Extremely-Low Income (ELI), Very-Low (VLI) Income, and Low Income (LI) households, as defined by HCD and as shown in Figure A below.


Figure A – HCD 2017 Income Limits for Santa Clara County

Income Level % of AMI Extremely Low Income (30% AMI) Very Low Income (50% AMI) Low Income (80% AMI) Median Income (100% AMI) Moderate Income 120% AMI)

1 2 $25,100 $28,650 $41,800 $47,800 $59,400 $67,900 $79,300 $90,650 $95,150 $108,750

3 $32,250 $53,750 $76,400 $101,950 $122,350

Household Size 4 5 $35,800 $38,700 $59,700 $64,500 $84,900 $91,650 $113,300 $122,350 $135,950 $146,850

6 $41,550 $69,300 $98,450 $131,450 $157,700

7 $44,400 $74,050 $105,250 $140,500 $168,600

8 $47,300 $78,850 $112,050 $149,550 $179,450

The City Council adopted the 2014-23 Housing Element on January 27, 2015, and submitted it to HCD for approval on January 30, 2015. HCD certified the Housing Element on April 30, 2015. The adopted Housing Element can be found at: www.sanjoseca.gov/DocumentCenter/View/43711 There are two reporting periods associated with the Housing Element, as shown in Figure B below. While building permit goals will be measured against an 8.8- year projection period from January 1, 2014 to October 31, 2022, progress on policies and programs (Appendix D in the Housing Element) will be tracked (starting in 2015) against an 8.1-year planning period from January 1, 2015 to January 31, 2023. Figure B – RHNA 2014-23 Reporting Periods

Housing Element 2014 - 2023 Jan 1, 2014 - Jan 31, 2023

Projection Period RHNA Production Tracking Period January 1, 2014 - Oct 31, 2022

Planning Period Policies and Programs Tracking Period January 1, 2015 - Jan 31, 2023

State law requires jurisdictions to prepare an annual progress report each calendar year to detail the implementation of their Housing Element and to submit it to HCD and the Governor’s Office of Planning and Research (OPR). All jurisdictions, including charter cities, must now submit annual reports. The report covers the following topics:   

Progress on the City’s Extremely-Low, Very-Low, and Low-Income RHNA goals. Progress on the City’s Moderate- and Above Moderate- Income RHNA goals. Progress on the Housing Element workplan to increase, preserve and improve the supply of affordable housing; invest in activities to end homelessness; promote equitable development; and create healthy, sustainable, communities and neighborhoods.


With the acceptance of a completed annual report by the City Council, the City of San José submits the report to HCD and OPR. It is important to note that maintaining a housing element that complies with HCD’s reporting requirements qualifies jurisdictions important funding opportunities including but not limited to: The Sustainable Communities Grant, PDA Planning Grant, Affordable Housing and Sustainable Communities funding, Housing Related Parks Program, Infill Infrastructure Grant, One Bay Area Grant, and the Building Equity and the Growth in Neighborhoods program. The Housing Successor to Redevelopment Agency Annual Report for Fiscal Year 2016-17 (Housing Successor Agency Report) is included with the Housing Element Annual Report to satisfy the requirements of Senate Bill 341, which took effect on January 1, 2014. This report describes how the City (as the successor to the former Redevelopment Agency of the City of San José) has utilized its former redevelopment agency funds on housing activities in conformance with State Health and Safety code.

ANALYSIS The Housing Department and the Department of Planning, Building and Code Enforcement have completed Housing Element Annual Progress Report for Calendar Year (CY) 2017. This report is provided as an attachment to this memorandum. Highlights of the report are discussed below. In calendar year 2017, the City issued building permits for 3,097 new residential units, a 48% jump since 2016. This includes 2,622 market-rate units (162% of the annualized goal) and 475 affordable units (20% of the annualized goal). Affordable units are those units deemed affordable to Extremely-Low, Very-Low, Low- and Moderate-Income households (as detailed in Figure A above). For CY 2017, the City developed a methodology to determine market-rate units that can reasonably be categorized as moderate-income units for RHNA reporting purposes. HCD’s guidelines indicate that where information pertaining to unit affordability is unavailable, units can be counted in the moderate-income category based on market conditions. Staff projected average effective rents for apartments permitted in 2017 using CoStar and found three zip codes where rents were naturally affordable for moderate-income households. Staff analysis looked at buildings with 10 or more apartments and assumes HCD occupancy guidelines. This analysis identified 285 apartments that issued building permits in 2017 and that are projected to rent at moderate-income levels in 2019. A detailed description of the methodology used in this analysis is included as an attachment to the Housing Element Report. The number of secondary dwelling unit permits issued significantly increased from 38 units in 2016 to 92 units in 2017. In 2017, secondary dwelling units were counted as “above moderate” because staff does not have data on the rents being charged. Figure C breaks down the City’s housing permits by income category.


Figure C – CY 2017 RHNA Production Performance

During the first four years of the 8.8-year RHNA projection period, the City has met 33% of its cumulative housing goal. By income category, the City has met 72% of its market rate housing goal and 7% of its affordable housing goal to date. Figure D breaks down the City’s RHNA performance to date by income category.


Figure D – 2014 – 2022 RHNA Production Performance

Market Conditions: The San José Metro Area (Santa Clara and San Benito counties) is the second most expensive rental and homeownership market in the Country.1 Market rents are significantly out of reach for many San José workers including teachers, construction workers, and retail salespersons. Annual rents have increased 30% over the past five years2 and only 14% of homes that are for sale are affordable to a family earning the median income3. Resources: Financial challenges across all levels of government have severely reduced the ability of the public sector to help house lower-income households. The primary challenge for affordable housing in California is the loss of redevelopment agencies (RDA) which provided the largest and most flexible revenue stream for low- and moderate-income housing. In San José, the RDA produced approximately $40 million per year for affordable housing and this source has not been

1

National Housing Conference, Paycheck to Paycheck Report for 2017; https://www.nhc.org/publication/paycheckto-paycheck-2017/ 2 Real Answers Quarterly Statistics 2010 - 2015 3 National Association of Home Builders (NAHB) Housing Opportunity Index Q3 2017


replaced. In addition, the decrease in federal funding for housing and community development has exacerbated the funding shortfall. In response to the housing crisis, state lawmakers have passed several pieces of legislation that will assist cities in addressing affordable housing. AB 1505 allows San José to fully implement its Inclusionary Housing Ordinance for rental and ownerships developments. SB 2 will generate on-going funding from real estate transfer taxes, and SB 3 will bring a $4 billion affordable housing bond measure to the voters this November. Finally, Santa Clara County voters approved Measure A which will raise $950 million for affordable housing development. Together, these new sources will leverage existing resources to provide a much-needed boost to affordable housing production in Silicon Valley. The Envision San José 2040 General Plan (General Plan), which incorporates the HCD-certified Housing Element, includes capacity for 120,000 new housing units through 2040. Within the provisions of this capacity, there is sufficient capacity to meet the requirements of the current Housing Element projection period. In spite of limited funding for below-market rate units, San José continues to facilitate the creation of new affordable housing units. The City’s affordable pipeline is growing and contains approximately 800 units from projects that have received a funding commitment but have not yet pulled building permits. The City also intends to issue a Notice of Funding Availability (NOFA) for approximately $100 million in Spring 2018. The funds, derived mostly from repayments of redevelopment-funded loans, are expected to help create more than 800 new affordable homes at varying affordability levels. As noted in the Annual Housing Element Report, the Housing Department intends to bring a five-year Affordable Housing Investment Plan to City Council in Spring 2018. This report will include information about the City’s affordable housing pipeline as well as estimates on the amount of federal, state, regional, and local funding that will be available for the construction of affordable housing in San José. Housing Successor to Redevelopment Agency Annual Report Staff has also attached the Housing Successor to Redevelopment Agency Annual Report for Fiscal Year 2016-17 (Successor Agency Report). As mentioned previously, this Report is required to be submitted with the Annual Housing Element Progress Report. The report provides information on the Low and Moderate Income Housing Asset Fund (LMIHAF). The Housing Successor Agency report is included as an attachment to the Housing Element Annual Progress Report. The Successor Agency Report shows that the City had $561,528,541in LMIHAF assets at the end of the fiscal year. Besides information on aggregate expenditures, the document includes several expenditure “tests” that the Successor Agency must meet. The “Excess Surplus Test” requires that the Agency cannot have unencumbered funds that exceed the aggregate amount deposited into the fund during the preceding four fiscal years. The Report indicates that the aggregate amount during the four prior years is $121.2 million. The unencumbered amount is


$85.8 million. Therefore, the Successor Agency meets this test because the balance does not exceed the aggregate amount deposited for the test period. Redevelopment law also places a limit on the amount of funds that can be spent on affordable units for senior citizens. If this percentage exceeds 50% of units funded over the last ten years, the Housing Successor cannot expend future LMIHAF funds on new senior housing until the Housing Successor or City has reduced this percentage to 50% or below. The report indicates that 21% of expenditures over this period went to fund senior housing. Therefore, the Successor Agency meets the “senior housing test” and can continue to fund senior affordable housing developments with the LMIHAF.

EVALUATION AND FOLLOW-UP After the City Council accepts this annual progress report, staff will submit the approved document to HCD and OPR by the State-mandated April 1, 2018, deadline.

PUBLIC OUTREACH This report will be posted on the City’s website. The individual City programs and projects described in the attachment have had appropriate public outreach pursuant to City Council policy.

COORDINATION This memorandum was coordinated with the City Attorney’s Office and the City Manager’s Budget Office.

COMMISSION RECOMMENDATION/INPUT No commission recommendation or input is associated with this action.

FISCAL/POLICY ALIGNMENT The current certified Housing Element aligns with the City’s federal Consolidated Plan. In addition, it aligns with the Housing Department’s Affordable Housing Investment Plan which prioritizes funding commitments towards the production of affordable housing. The construction of ELI housing aligns with the regional “All The Way Home” campaign to end Veteran’s homelessness in Santa Clara County as well as the Community Plan to End Homelessness.


Additionally, the Housing Element is consistent with the General Plan’s Major Strategies, goals, policies, and actions. In particular, the Housing Element is consistent with the General Plan action item to increase, preserve and improve San José’s affordable housing stock.

CEQA Not a Project, File No. PP17-009, Staff Reports, Assessments, Annual Reports, and Informational Memos that involve no approvals of any City action.

/s/ ROSALYNN HUGHEY, ACTING DIRECTOR Planning, Building and Code Enforcement

/s/ JACKY MORALES-FERRAND, DIRECTOR Department of Housing

For planning related questions, please contact Jared Hart, Supervising Planner at (408) 535-7896. For housing related questions, please contact Adam Marcus at (408) 975-4451.

Attachment: Annual Housing Element Progress Report for Calendar Year 2017 and Housing Successor to Redevelopment Agency Annual Report Fiscal Year 2016-17

Housing Element Annual Progress Report March 20, 2018 City Council Agenda Item 4.2

1

Envision San José 2040 Seven Required Elements: 1) Land Use 2) Circulation 3) Housing 4) Conservation 5) Open-space 6) Noise 7) Safety 2 www.sanjoseca.gov/planning

Housing Needs Assessment California HCD/DOF

MTC 187,990 units

San José 35,080 units

3 www.sanjoseca.gov/planning

San José’s Housing Needs (RHNA) Income Category*

60% of RHNA is affordable housing

RHNA 2014 – 2022 (Units)

Annual Goal (Units)

Extremely Low

4,617

525

Very Low

4,616

525

Low

5,428

617

Moderate

6,188

703

Market-Rate

14,231

1,817

Total

35,080

3,987

Extremely Low

Up to 30% Area AMI

$25,100 - $47,300 (based on household size)

Very Low

31% - 50% AMI

$41,800 - $78,850 (based on household size)

Low

51% - 80% AMI

$59,400 - $112,050

Moderate

81% - 120% AMI

$95,150 - $179,450

Market-Rate

Above 120%

AMI – Area Median Income; HCD 2017 Income Limits for Santa Clara County

4

Building Permits Issued for New Units (2017) Income Category*

Units (2017)

Annual Goal (Units)

Percent of Annual Goal Achieved

Extremely Low

68

525

13%

Very Low

122

525

23%

0

617

0%

285

703

41%

Market-Rate

2,622

1,617

162%

Total

3,097

3,987

78%

Low Moderate

5

Overall Progress Towards RHNA Income Category

Building Permits Issued for new Units (2014 – 2017)

Total RHNA Goal (2014 – 2022)

Percent of Total RHNA Goal Achieved

Extremely Low

182

4,617

4%

Very Low

667

4,616

14%

Low

231

5,428

4%

Moderate

285

6,188

5%

Market-Rate

10,300

14,231

72%

Total

11,665

35,080

33%

6

New Opportunities to Build Market Rate Housing • > 6,000 units entitled • > 6,000 units with pending entitlements • Urban Village Implementation • Downtown Strategy & EIR Update • North San José Area Development Policy • Accessory Dwelling Units 7 www.sanjoseca.gov/planning

Market Rate Production Impediments • High land and construction costs • Declining rents • Absorption of current homes under construction


Affordable Production Impediments • Loss of the Redevelopment Agency • Reductions in Federal and State funding • Decreases in tax credit equity due to tax reform • High land and construction costs • Competition for land


New Opportunities to Build Affordable Housing • Funding opportunities • Inclusionary Housing Ordinance • GP affordable housing policy updates • VTA Joint Development Sites


San José Housing Programs Highlights (2017) • Invested $57.5 M* in new affordable apartments • Pipeline of 1,143* affordable apartments • Created more than 800* housing opportunities for formerly homeless individuals/families • Apartment Rent Ordinance modifications and new Ellis Act and Tenant Protection Ordinance • General Plan text amendments to protect mobilehome parks • 140% growth in ADU permits from 2016 to 2017 * Source: Q4 2017 Affordable Housing Production & Preservation Report 11 www.sanjoseca.gov/planning

Next Steps for the 25K Housing Goal • April 23: CEDC: Affordable Housing Investment Plan & Mayor’s

Housing Goal • April 26: CC Study Session: Cost of Development • May 1: CC: Urban Village Implementation

• Mid May: CC: Affordable Housing Investment Plan & Mayor’s Housing Goal 12 www.sanjoseca.gov/planning