Agenda Item   

AGENDA STAFF REPORT

 

                                                                                                                        ASR Control  22-001090

 

MEETING DATE:

12/20/22

legal entity taking action:

Board of Supervisors

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:  Receive and File the 2022 Housing Funding Strategy Update

 

      ceo CONCUR

County Counsel Review

Clerk of the Board

Concur

No Legal Objection

Discussion

 

 

3 Votes Board Majority

 

 

 

    Budgeted: N/A

Current Year Cost: N/A

Annual Cost: N/A

 

 

 

    Staffing Impact:

No

# 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: 6/12/2018 #S2A

 

RECOMMENDED ACTION(S):

 

Receive and File the 2022 Housing Funding Strategy Update.

 

 

 

 

SUMMARY:

 

 

Receiving and filing the 2022 Housing Funding Strategy Update as presented by OC Community Resources and developed in conjunction with Corporation for Supportive Housing provides an update to the previous 2018 Housing Funding Strategy and acknowledges the County's efforts in the development of permanent supportive housing for people experiencing homelessness in Orange County.

 

 

 

BACKGROUND INFORMATION:

 

On June 12, 2018, the Board of Supervisors received and filed the 2018 Housing Funding Strategy (2018 Strategy) which identified the goal of developing 2,700 units of supportive housing by 2025 and the required financial resources to achieve that goal. The 2018 Strategy generated the goal based on the 2017 Point in Time Count (PIT). As the 2019 PIT count was conducted only one year into the 2018 Strategy, OC Community Resources (OCCR) made no update to the 2018 Strategy at that time.

 

Based on the most recent 2022 PIT count, OCCR worked with their consultant Corporation for Supportive Housing, who helped to complete the 2018 Strategy, to provide an update to the 2018 Strategy. The 2022 Housing Funding Strategy Update (2022 Strategy) provides a progress report on the regional efforts to produce the 2,700 units of supportive housing, a review of the current homeless numbers from the 2022 PIT count and subpopulations, reviews current market forces and housing needs, and updates the financial model based on the updated housing production goal for supportive housing units in consideration of current needs.

 

From June 2018 to 2022, a significant regional effort has been made to leverage funding and develop supportive housing across Orange County. Current projections indicate that at the end of seven years (2025) there will be 1,643 supportive housing units produced towards the 2,700 unit goal. This includes the current supportive housing units in the pipeline totaling 1,232 units which are currently at various stages of completion, under construction and/or in the process of obtaining financing. It is also important to note that within the developments in the pipeline there are an additional 1,046 of general affordable housing units. Projecting out through 2025, there is currently a gap of 1,057 supportive housing units still needed to achieve the goal of 2,700 units. 

 

During this same time period (2018-2022), the County of Orange (County) has been successful at leveraging its funding investment in about a $1 to $5.50 ratio of other non-County funding (e.g. tax credit equity, tax-exempt bond funding or other state/federal monies). In other words, the county’s investment has attracted other significant financial investments in quality supportive housing within the Orange County region and done so in a fiscally prudent manner which allows for maximum housing production with the available resources.

 

Although capital funding for supportive housing development has increased, so have the costs of housing construction. The impacts of the COVID-19 global pandemic have resulted in significant increases to construction costs due to supply chain issues and related delays, staffing shortages and inflation. This unanticipated significant increase in costs has greatly impacted the supportive housing pipeline and limited unit production. It is anticipated that the costs of production will continue to increase due to market forces for at least the next couple of years resulting in the need for additional investments that exceed prior projections.

 

The 2022 Strategy identifies an updated goal of producing 2,396 units of supportive housing by 2029 to meet the current needs based on the 2022 PIT. Current projections estimate a funding gap of $458 million in capital and $495 million in operating subsidies for 2,396 units. The 2022 Strategy also includes information on how these units are a subset of the region's Regional Housing Needs Assessment unit numbers that are being incorporated into Cities and County Housing Elements. The 2022 Strategy does acknowledge that achieving the aforementioned updated goal is not without its challenges; however, the 2022 Strategy continues to highlight existing opportunities to help mitigate the challenges.

 

The 2022 Strategy includes Recommendations and Next Steps that will help guide the Orange County region to continue to maximize supportive housing production, including:

  • Maximize competitiveness for capital and operating funding by aligning local, flexible resource commitments.
  • Dedicate additional funding to housing development and operating subsidies, continue to refine funding policies that maximizes supportive housing developers’ ability to attract other investors.
  • Maximize the ability of all Public Housing Authorities (PHAs) in the region to use Special Purpose Vouchers and Project-Based Section 8 Housing Choice Vouchers (HCV); up to the caps allowed for the available tenant-based vouchers managed by a PHA to be project-based to a specific unit in a development, based on available funding (the subsidy remains with the unit).
  • Continue building investments from the 34 cities and the County in the Orange County Housing Finance Trust.
  • Explore the outcomes of the Permanent Local Housing Allocation funding and the possibility of investing funds in supportive housing production or operations.
  • Prioritize supportive housing for people experiencing chronic homelessness and design and invest in supportive housing resources for special populations, including veterans, seniors, transitional aged youth and people with a history of justice involvement.
  • Build partnerships with mainstream supportive services (e.g., Federally Qualified Health Centers; Managed Care Plan/CalOptima Health; California Advancing and Innovating Medi-Cal (CalAIM) and Program for All Inclusive Care for the Elderly (PACE) initiatives, etc.).
  • Build on collaborative regional investments in supportive housing development and pursue an expanded Coordinated Funding structure. This allows funders to develop shared priorities to target beneficiaries and improve service delivery. Coordinate discussions between funders focused on breaking down barriers and “silos” and helping to realize common goals and benefits.
  • Incorporate the best practices, guiding principles and commitments of the Housing Pillar as detailed in the Homeless Systems Pillar Report into the development of supportive housing to ensure stability and sustainability for people exiting from homelessness into housing.

 

 

 

FINANCIAL IMPACT:

 

There is no financial impact associated with the receiving and filing of the 2022 Housing Funding Strategy Update. As specific housing projects are brought forward to the Board for approval, the funding sources and appropriation needs will be identified at that time.

 

 

STAFFING IMPACT:

 

N/A

 

ATTACHMENT(S):

 

Attachment A- Housing Funding Strategy-2022 Update