SAN JOSE - Granicus

COUNCIL AGENDA: 9/22/15 ITEM: CITY OF

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SANJOSE

Memorandum

CAPITAL OF SILICON VALLEY

TO: HONORABLE MAYOR AND CITY COUNCIL SUBJECT: PILOT TRANSITIONAL HOUSING COMMUNITY FOR THE HOMELESS Approved

FROM: Jacky Morales-Ferrand

DATE: September 3, 2015

Date

11\o Its'

RECOMMENDATION Accept the staff report on the proposed pilot transitional housing program for the homeless.

OUTCOME The City Council's acceptance of this report will allow the Housing Department to move forward with creating a pilot transitional housing community to address the immediate housing needs of homeless residents. If the City Council approves this action, then the City staff will pursue steps to site, fund, develop, and operate a pilot transitional community.

BACKGROUND Permanent supportive housing development is a best practice model that communities across the nation have implemented as an effective tool for ending homelessness. Supportive housing enables persons with a history of long-term homelessness to remain housed and live as independently as possible by providing comprehensive wrap-around supportive services. These services include case management, medical care, and life skills training. The Housing Department has prioritized the development of such opportunities, however, the construction of apartments that provide these services requires significant time, planning, and financial investment. As a result, the Housing Department has undertaken review of a number of interim strategies to address the need for more immediate housing and shelter in San Jose. These options include: • Purchasing a hotel; • Developing a safe car parking program; • Implementing a hotel/motel lease program; and • Exploring the development of a transitional housing community.

HONORABLE MAYOR AND CITY COUNCIL September 3, 2015 Subject: Pilot Transitional Housing Communities

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On April 23, 2014, the Rules and Open Government Committee considered a memorandum from Councilmembers Herrera and Liccardo directing the administration to evaluate the construction of "tiny homes" as an option to provide transitional housing for homeless individuals. The Committee referred the item to the Community and Economic Development Committee (CEDC). On May 19, 2014, the Housing Department provided a verbal presentation on microhousing developments. CEDC directed staff to return with a comprehensive report on the range of options and available funding to support the development of this interim housing. On September 5, 2014, the Housing Department provided a comprehensive report to CEDC on alternative interim housing solutions. In addition to micro-housing, the Department provided additional analysis and review on prefabricated wood-frame sheds, sheds with power and foundations, shipping containers, portable cabins, and conventional travel trailers either to be used as a shelter or transitional housing. Each option was evaluated based on cost, code issues and potential obstacles. On June 9, 2015, Mayor's FY 2015-2016 Mayor's Budget Message was approved by City Council. This document directed the administration to focus on innovative approaches to rapidly housing people through the construction of small homes, conversion of motels to residential housing and the implementation of an overnight safe-parking program. The Budget Message also directed the City Manager to identify potential sites for a pilot "tiny homes" project within the next fiscal year. The best practice, evidence-based "housing-first" model - moving people immediately off the streets and into permanent homes - remains the City's preferred approach. However, it can take three to five years before an affordable housing development is financed, entitled and constructed. In addition, the high cost of housing and the low vacancy rate in San Jose have prevented homeless participants in the City-funded rental subsidy programs from accessing affordable apartments. Even with a guaranteed rental payment from the City, program participants remain on the streets for months unable to locate a place to live. It is possible that within approximately 12 months, the City may be able to establish a transitional community that would provide habitable, quality housing. Proposed Pilot Transitional Housing Communities Transitional communities can provide interim housing options for homeless program participants and serve to address the demand for a more economical way to house people quickly. The proposed pilot will serve a minimum of 100 individuals. Approximately 16 modular housing units will be purchased and delivered to the site. Each 2,000 square-foot modular structure will contain six to eight private rooms with a shared bathroom and kitchen. One or more central communal buildings will provide meeting spaces for resident services. The buildings will meet the California Building Code and will include energy efficiency features, insulation, heating, and weatherproofing to provide a comfortable living environment both in the

HONORABLE MAYOR AND CITY COUNCIL September 3, 2015

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Subject: Pilot Transitional Housing Communities

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winter and the summer. Each room will have a locking door to ensure privacy and security. The interior space will include storage and convertible or modular furniture to accommodate multiple needs. The central community center will contain communal rooms for activities, laundry facilities, and meeting and office space for supportive services. Limited security will be provided as well as onsite management. Additional community amenities may include parking (as needed), a smoking area, a dog run, and a community garden. Key features of the proposed transitional housing community are listed below. 1. A qualified nonprofit will manage the community. The nonprofit will be responsible for property management, locating permanent housing, and neighborhood relations. 2. The City will identify a funding plan to develop the site and provide ongoing financial support for the community. Donations from private individuals and/or foundations may also be considered. 3. The proposed priority target population for the pilot will be homeless individuals with a high potential for economic self-sufficiency and a sustained rental history, but who have been unable to find an affordable home due to lack of available rental apartments, poor credit, gaps in recent rental history, or lack of sufficient income. Currently there are 30 people enrolled in the City rental subsidy program who are searching for housing. An additional 100 people will be enrolled in the program during this fiscal year. Local estimates for the larger modular structures range from approximately $100,000 to $120,000, resulting in a per-unit cost of approximately $15,000 to $20,000. The annual cost to operate and provide supportive services for the site is estimated at approximately $725,000 for 50 participants.

ANALYSIS In San Jose, over 45% of homeless individuals became homeless as a result of a financial or a domestic crisis. According to the most recent homeless survey and census count completed earlier this year, the primary event that resulted in a person becoming homeless was from a job loss (30%). The third most cited reason was a divorce/separation/brealc-up (16%). Obstacles to obtaining housing were almost solely income related. Over two-thirds of respondents reported an inability to afford rent, followed by 57% reporting a lack of job or income. Most people who are homeless have previously lived in independent permanent housing and they can generally return and remain housed when provided with limited assistance. The more time someone remains on the street, the longer it will take to transition back into permanent housihg. The goal of the pilot is to move program participants off the streets into the transitional housing community and offer services to locate permanent housing as quickly as possible.


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While there are a small number of existing transitional communities scattered across the Country, very few have been in operation for a significant period of time. None have been evaluated by any outside source for programmatic effectiveness. As this is a new model for San Jose, the following factors will be critical to the success of the pilot program: 1. 2. 3. 4.

The design of the operations; The program's integration into the overall community; The services delivery model for residents; and The overall quality site design and living conditions.

Nonprofit Partner Selecting a nonprofit partner is vital to the success of the pilot because the long-term viability depends on the partner's ability to develop a comprehensive program. The nonprofit must be nimble, be willing to respond to all unexpected challenges, have excellent communication skills, and be willing and able to work with the surrounding neighbors. No local nonprofit has experience managing a transitional housing community. To date, the City has released two Requests for Proposals (RFP) for the implementation of new, innovative homeless housing programs and has received no responses to either RFP. As a result, the Department has had to select a partner willing and able to design new programs. The City has selected Abode Services to operate the pilot transitional housing communities. Abode Services (Abode) was selected to operate this project because of their diverse experience developing supportive housing and managing a wide range of homeless programs. Founded in 1989, the organization serves more than 4,400 adults and children in Alameda, Santa Clara and Santa Cruz. Abode currently manages a homeless housing and employment program for Alameda County and a homeless rental assistance program for Santa Clara County. Abode is also developing a master-lease transitional housing program for the City. Because the masterlease program will serve a similar population that will be prioritized for the pilot transitional housing communities project, Abode was deemed the only local nonprofit who has the capacity and the experienced staff needed to operate the program successfully. Next Steps Staff is completing its review of City-owned sites to identify a suitable location for the pilot development. The site must be large enough to accommodate a minimum of 100 units, the community building and the proposed amenities. Pending City Council's acceptance of this report, the Housing Department will complete its review of potential sites and select a proposed site. The Department and Abode will hold meetings with the surrounding neighborhood to identify and address community concerns. The Department will then present a memorandum to City Council recommending a proposed site for the Transitional Housing Community. The memorandum may also include a recommendation to


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approve a developer for the site, as well as the authorization of funds for site design and construction oversight. Depending on the final configuration and design of the structures, and the habitability needs of the target population, the overall cost of the project could vary. Since the California Building Code and all regulatory requirements will be met, there are several potential funding sources which the Housing Department may use for this pilot. It is projected that development of the site can begin as early as the summer of 2016 with a goal to open the community by the fall of 2016. A detailed timeline will be provided when the Housing Department returns to City Council with a recommended site and a request for a funding appropriation.

EVALUATION AND FOLLOW-UP The Housing Department will return to Council and seek authorization to provide Abode Services with a predevelopment grant and construction financing once the CEQA clearance has been obtained. Progress on other key program elements such as funding, the development plan, and the services management plan will also be provided.

POLICY ALTERNATIVES To arrive at this proposal, Staff considered the following options: Alternative #1: Pros: Cons:

Reason for not Recommending:

Seek other housing options for homeless populations Several existing housing and shelter types exist in the community with more established track records. Other options will either take significant time to become operational (permanent supportive housing development) or provide very short-term shelter and are inefficient in addressing homelessness (homeless shelters).

While shelter and permanent housing remain considerations for homeless housing in the community, the proposed pilot provides one of the most cost effective and expedient ways to house homeless individuals in a suitable living environment that meets all of the necessary health and safety standards. While the Housing Department continues to evaluate other options, none present a more immediate solution than the proposed transitional community.


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PUBLIC OUTREACH This memorandum will be posted on the City's Council Agenda website for the September 22, 2015 Council Meeting.

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

FISCAL/POLICY ALIGNMENT The proposed transitional housing community pilot and legislation are consistent with the goals described in the City's adopted Community Plan to End Homelessness and with the housing policies in the Envision San Jose 2040 General Plan including but not limited to the following: Housing - Social Equity and Diversity Policy H-1.2 Facilitate the provision of housing sites and structures across location, type, price and status as rental or ownership that respond to the needs of all economic and demographic segments of the community including seniors, families, the homeless and individuals with special needs.

CEOA Not a Project, File No. PP10-069(a), Staff Report.

/s/ JACKY MORALES-FERRAND Interim Director of Housing

For questions, please contact Patrick Heisinger Senior Development Officer, at (408) 975-2647.