Agenda Item AGENDA STAFF REPORT ASR Control 23-000872
MEETING DATE:	12/19/23
legal entity taking action:	Board of Supervisors
board of supervisors district(s):	2
SUBMITTING Agency/Department:	OC Community Resources (Approved)
Department contact person(s):	Dylan Wright (714) 480-2788
	Julia Bidwell (714) 480-2991

Subject: Concurrence with Orange County Housing Finance Trust Recommended Projects

ceo CONCUR

County Counsel Review

Clerk of the Board

Concur

No Legal Objection

Consent Calendar

3 Votes Board Majority

Budgeted: N/A

Current Year Cost: N/A

Annual Cost: N/A

Staffing Impact:

# of Positions:

Sole Source: N/A

Current Fiscal Year Revenue: N/A

Funding Source: N/A	County Audit in last 3 years: No
Levine Act Review Completed: N/A

Prior Board Action: 6/6/2023 #8, 4/25/2023 #25, 12/20/2022 #3, 10/4/2022 #5

RECOMMENDED ACTION(S):

Concur with the recommended housing projects using allocated County of Orange funds and as approved by the Orange County Housing Finance Trust, as described in Attachment A.

Authorize OC Community Resources Director or designee to concur with future funding changes to projects previously recommended by the Orange County Housing Finance Trust and concurred with by the Board of Supervisors, so long as the funding and projects are consistent with provisions within the County’s Grant Agreement with the Orange County Housing Finance Trust, funding sources and County policy.

SUMMARY:

Concurrence with the recommended housing projects using allocated County of Orange funds as approved by the Orange County Housing Finance Trust will support the development of affordable and supportive housing in Orange County.

BACKGROUND INFORMATION:

On June 25, 2019, your honorable Board of Supervisors (Board) appropriated $5 million as part of the approved FY 2019-20 Budget for the Orange County Housing Finance Trust (Trust) to support the development of affordable and supportive housing throughout Orange County. The Trust was formed as a joint powers authority between the County of Orange (County) and cities (currently 26 cities) throughout Orange County. The Trust was created for the purpose of funding housing, specifically assisting persons experiencing homelessness and households of extremely low, very low and low income within Orange County.

On May 19, 2020, the Board approved two (2) Grant Agreements with the Trust to provide a legally binding commitment which was needed to apply for additional funding under the State Local Housing Trust Fund (LHTF) Program for the development of affordable and supportive housing: (1) the Grant Agreement between the County and Trust allocating $20.5 million in Mental Health Services Act (MHSA) and the previously appropriated $5 million in County general funds over a five year period as dedicated and matching funds to the Trust for development of affordable and supportive housing; and (2) the County Administrative Costs Grant Agreement, allocating $200,000 per year in County general funds for a minimum of five years for a total of $1 million for the County’s contribution toward the administrative cost allocation for Trust members adopted by the Trust Board of Directors (Trust Board). The Grant Agreement required the Trust to coordinate with the OC Health Care Agency and OC Community Resources (OCCR) staff for administration of County allocated funding for supportive housing, including review of requests/applications for funding and services. The Grant Agreement also required the Trust to submit recommended projects utilizing County General Fund and/or MHSA funding to the Board for concurrence prior to committing and disbursing funds for a project.

On June 28, 2022, the Board approved the FY 2022-23 MHSA Three-Year Program and Expenditure Plan, which included an additional $40 million for the development of supportive housing for eligible MHSA households, of which $10 million of the $40 million in appropriated MHSA funds were allocated to the Trust for development of affordable and/or supportive housing. On April 25, 2023, the Board approved the Amended and Restated Grant Agreement between the County and the Trust, transferring an additional $10 million in MHSA funds upon execution of the Agreement, through July 31, 2028, to act as matching funds for the development of affordable and supportive housing.

Since its formation, the Trust has issued five (5) Notices of Funding Availability (NOFAs) making funding available to promote the new construction or acquisition/rehabilitation of supportive housing and affordable housing for extremely low-income households in Orange County. The Trust has committed to funding 18 affordable housing projects which has helped finance nearly 1,309 affordable housing units. In addition to the County funding, the Trust has applied for and been awarded over $31 million in grant funding from the State of California, Federal Department of Housing and Urban Development, CalOptima, Orange County Council of Governments and Southern California Association of Governments.

On January 26, 2023, the Trust released their 2023 NOFA making $18 million in funding available for development of supportive housing and affordable housing. The Trust received three applications, and on June 6, 2023, the Board concurred with the Trust’s recommended housing projects located in the cities of Costa Mesa, Garden Grove and Westminster.

As the Trust’s 2023 NOFA still had available funding, applications continued to be accepted through October 16, 2023, and were reviewed on a rolling basis. OCCR is returning to the Board for concurrence with the Trust’s recommended housing projects, located in the cities of Orange and Santa Ana, approved by the Trust Board on December 12, 2023, using allocated County funds (see Attachment A). The Trust 2024 NOFA is expected to be released in January 2024. Concurrence with the recommended housing projects will continue to support the Trust’s ongoing administration of County funding, match funding under the LHTF Program and other leveraged funding sources, thereby increasing the amount of subsidy funding for affordable housing in Orange County. All uses of the MHSA funds by the Trust will be in accordance with the applicable provisions of the Grant Agreement between the County and Trust.

One of the projects recommended by the Trust reflects a funding increase to a project previously approved by the Trust Board and concurred by the Board. OCCR requests authorization to concur with future funding changes to projects previously recommended by the Trust Board and concurred with by the Board, so long as the funding and projects are consistent with provisions within the County’s Grant Agreement with the Trust, funding sources and County policy. This will help expedite the Trust’s ability to provide enforceable funding commitments to projects which have already received previous Board concurrence, ensuring funding deadlines requiring evidence of firm funding commitments are not missed and that funding can be made available for construction financing, as needed, to help projects complete construction or bring units online faster. All projects will continue to initially come to the Board for concurrence as prescribed in the County’s Grant Agreement with the Trust.

The recommended action in this Agenda Staff Report supports the 2022 Housing Funding Strategy Update received and filed by the Board on December 20, 2022, which outlines the recommendations for a strategic approach to achieve an updated goal of developing 2,396 supportive housing units by 2029. The recommended housing projects 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 received and filed by the Board on October 4, 2022.

Compliance with CEQA: This action is not a project within the meaning of CEQA Guidelines Section 15378 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 concurrence with projects using previously transferred County funds as approved by the Trust to allow for the continued investment to support the production and operation of affordable and 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.

FINANCIAL IMPACT:

N/A

STAFFING IMPACT:

N/A

REVIEWING AGENCIES:

OC Health Care Agency
CEO Office of Care Coordination

ATTACHMENT(S):

Attachment A - Recommended Orange County Housing Finance Trust 2023 NOFA Projects with County Funding