AGENDA STAFF REPORT

Agenda Item AGENDA STAFF REPORT ASR Control 22-001235
MEETING DATE:	02/28/23
legal entity taking action:	Board of Supervisors and Orange County Housing Authority
board of supervisors district(s):	All Districts
SUBMITTING Agency/Department:	OC Community Resources (Approved)
Department contact person(s):	Dylan Wright (714) 480-2788
	Julia Bidwell (714) 480-2991

Subject: 2023 Supportive Housing Notice of Funding Availability

ceo CONCUR

County Counsel Review

Clerk of the Board

Concur

No Legal Objection

Discussion

3 Votes Board Majority

Budgeted: Yes

Current Year Cost: See Financial Impact Section

Annual Cost: N/A

Staffing Impact:

# of Positions:

Sole Source: N/A

Current Fiscal Year Revenue: N/A

Funding Source: See Financial Impact Section	County Audit in last 3 years: No

Prior Board Action: 10/4/2022 #18, 12/17/2019 #20

RECOMMENDED ACTION(S):

Acting as the Board of Supervisors, the Board of Commissioners to the Orange County Housing Authority and as the Board of Commissioners to the Orange County Housing Authority, acting in its capacity as Housing Successor Agency:

Approve the recommended changes in policy and process for the 2023 Supportive Housing Notice of Funding Availability.

Authorize the OC Community Resources Director or designee to issue the 2023 Supportive Housing Notice of Funding Availability with an emphasis on developing extremely low-income housing with up to $67.1 million in available funding as outlined in the Financial Impact Section and utilize up to 210 Housing Choice, Mainstream and/or Veterans Affairs Supportive Housing Project-Based Vouchers and return to the Board of Supervisors for funding commitments to individual projects.

SUMMARY:

Approval of the recommended changes in policy and process for the 2023 Supportive Housing Notice of Funding Availability and issuance of the 2023 Supportive Housing Notice of Funding Availability will allow continued investment to support the production of affordable and supportive housing in Orange County.

BACKGROUND INFORMATION:

On December 17, 2019, the Board of Supervisors (Board) approved the changes in policy and process for the 2020 Supportive Housing Notice of Funding Availability (2020 NOFA) and authorized the OC Community Resources (OCCR) Director or designee to issue the 2020 NOFA with an emphasis on developing extremely low-income housing in a combination of up to $13 million in Orange County Housing Successor Agency funds, Federal HOME Investment Partnerships Program (HOME) funds and Mental Health Services Act (MHSA) funds and utilize up to 200 Housing Choice Project-Based Vouchers (PBVs) and return to the Board for funding commitments to individual projects. The 2020 NOFA was released on January 27, 2020.

Since issuance of the 2020 NOFA and subsequent amendments to increase funding and PBVs, the County of Orange (County) has received 19 applications requesting 367 PBVs and approximately $31.6 million in combined capital funding requests to fund the development of 599 units of supportive housing for extremely low-income households experiencing homelessness. Except for one application that is still currently in the review process, all applications have been processed and approved by the Board with funding and/or PBVs committed to individual projects. As such, all funding and PBVs from the 2020 NOFA have been exhausted. In addition, the County’s capital funds and PBV commitments to these developments helped leverage additional funding for the development of 578 units of affordable housing.

OCCR staff worked with other County departments and agencies to gather input and feedback on the current NOFA policies and process and its implementation. Subsequently, OCCR held a NOFA input session on November 14, 2022, to discuss the 2020 NOFA and proposed recommended changes in policy and process stemming from internal County review. In an effort to understand the challenges developers are currently experiencing in developing supportive housing in the County, OCCR staff also held a Developer Roundtable on January 23, 2023, with a focus on addressing increasing construction costs and the potential strategies to reduce development costs.

The final recommended changes in policy and process for the 2023 Supportive Housing Notice of Funding Availability (2023 NOFA) resulting from internal and external feedback are included in Attachment C. The recommended changes are updates that clarify County policy or process, reflect industry standards, address inflation/increasing costs, including costs incurred by the County and prioritize funding and PBVs for the development of supportive housing. The recommended changes will also support the creation of housing resources that will follow the best practices, guiding principles and commitments of the Homeless Service System Pillars Report, which was created by the Commission to End Homelessness and accepted by the Board on October 4, 2022.

The recommendations for issuance of the 2023 NOFA with up to $67.1 million in funding and up to 210 Housing Choice, Mainstream and/or Veterans Affairs Supportive Housing PBVs will continue to place an emphasis on developing extremely low-income supportive housing as part of a comprehensive approach to support the Housing Funding Strategy to develop supportive housing units.

OCCR staff will present the recommended changes in policy and process to the Project Review Advisory Panel at their February 9, 2023 meeting.

Compliance with CEQA: This recommended action is not a project within the meaning of CEQA Guidelines Section 15378(b)(4) and is therefore not subject to CEQA, since it does not have the potential for resulting in either a direct physical change in the environment, or a reasonably foreseeable indirect physical change in the environment. The approval of this agenda item does not commit the County to a definite course of action regarding a project since it is for approval of funding and vouchers to allow the continued support of the production of supportive housing in Orange County. This proposed activity is therefore not subject to CEQA. Any future action connected to this approval that constitutes a project will be reviewed for compliance with CEQA.

Compliance with NEPA: The proposed activity is Exempt under Section 24 CFR 58.34(a)(3).

FINANCIAL IMPACT:

Up to $67.1 million (a combination of Federal HOME Investment Partnerships Program [HOME], HOME American Rescue Plan Act [HOME-ARPA], Mental Health Services Act [MHSA] and American Rescue Plan Act Coronavirus State and Local Fiscal Recovery Funds) will be issued as loans. These loans only affect the notes receivable balance sheet accounts of the funds. Per budgeting practice, the loans are not built into the fiscal year appropriations. The 210 Housing Choice, Mainstream and/or Veterans Supportive Housing Project-based vouchers were received and are included in appropriations in Fund 15F OC Housing Authority FY 2022-23 Budget.

STAFFING IMPACT:

N/A

REVIEWING AGENCIES:

Orange County Health Care Agency

ATTACHMENT(S):

Attachment A – California Code of Regulations Title 14 Section 15378
Attachment B – Code of Federal Regulations Title 24 Subtitle A Part 58
Attachment C – Recommended Changes in Policy and Process for the 2023 Supportive Housing Notice of Funding Availability