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CC:HA - CONSENT ITEM: Authorization to Release a Request for Proposals to Award up to 50 Section 8 Housing Choice Voucher Program Project-Based Vouchers for the Creation of New Construction or Substantial Rehabilitation Affordable Housing Projects.
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Meeting Date: November 11, 2024
Contact Person/Dept.: Tevis Barnes/Housing and Human Services
Phone Number: 310.253.5780
Fiscal Impact: Yes [X] No [] General Fund: Yes [] No [X]
Attachments: Yes [] No []
Public Notification: (E-Mail) Meetings and Agendas - City Council (11/07/2024)
Department Approval: Tevis Barnes, Housing and Human Services Director (10/21/2024)
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RECOMMENDATION
Staff recommends the City Council and the Culver City Housing Authority (Authority) Board authorize the release of a Request for Proposals (RFP) to award up to 50 Section 8 Housing Choice Voucher (HCV) Program Project-Based Vouchers (PBVs) for the creation of new construction or substantial rehabilitation affordable housing projects.
BACKGROUND
Housing Opportunity through Modernization Act of 2016/ National Standards for the Physical Inspection of Real Estate
For Fiscal Year 2024/2025, the Authority plans to implement policy changes derived from the US Department of Housing and Urban Development (HUD) Housing Opportunity through Modernization Act of 2016 (Act) and the HUD-required National Standards for the Physical Inspection of Real Estate (NSPIRE) inspection protocols.
Under the Act, HUD is instituting changes in how Public Housing Agencies (PHAs) like the Authority implement Section 8 HCV PBVs to support the creation of affordable housing units through either new construction or substantial rehabilitation. The Act also makes changes to the way the Section 8 HCV Program calculates income and income deductions, including PBVs. The rule aims to align the Section HCV Program with industry standards by considering cost-of-living adjustments based on current economic circumstances.
In addition to the Act, effective October 1, 2025, the Authority will begin conducting housing inspections based on the HUD mandated NSPIRE guidelines. This new method for inspecting and assessing HUD-assisted housing ensures that residents live in safe, habitable homes. It also guarantees that the items, both inside and outside of the unit, are functionally adequate, operational, and free of health and safety hazards.
Under NSPIRE, projects utilizing PBVs must undergo an initial inspection prior to occupancy to ensure a safe and healthy living environment. In addition, upon project completion, units with PBV assistance will be randomly selected for inspection to assure the proper maintenance of the units.
DISCUSSION
Project-Based Vouchers
HUD provides funding for affordable housing production through PBVs. PBVs provide developers/owners with a set amount of funding per affordable unit, reducing the rent that unit’s tenant must pay, and providing a consistent income stream to the developer/owner. PBVs are part of the way affordable development projects are financed and built. The Authority administers the program for HUD in Culver City. HUD must approve the Authority’s budget authority to support the annual PBV rental subsidies.
Through the release of the PBV RFP, the Authority will seek to award up to 50 PBVs, on or about January 1, 2025. The selected developer(s)/owner(s) will enter into a HUD approved Housing Assistance Payment (HAP) contract that defines the terms and amount of approved funding. The HAP contract process relies on a decision by HUD to allocate a certain number of PBVs to Culver City, and a subsequent Authority RFP process for developers/owners to apply for those PBVs.
Public Outreach/Public Noticing
Federal regulations under HUD require the Authority to offer the PBVs via a public and competitive solicitation such as an RFP. As required by HUD, the Authority must place public notices in the local newspapers announcing the availability of PBV through RFP. The Authority will also transmit direct mailings to local area housing developers and to developers who have expressed an interest in PBVs. In addition, at least one technical assistance workshop will be held by the Authority to answer questions about the RFP submission and selection process.
Project Eligibility Threshold
The HAP Contract process relies on a decision by HUD to allocate a certain number of PBVs to Culver City, and a subsequent Authority RFP process for developers/owners to apply for those PBVs.
If approved by the City Council and Authority Board, the Authority anticipates the release of the PBV RFP in November 2024 with selection of a developer/owner on or about January 1, 2025. The selected developer/owner will enter into a HAP contract with the Authority which defines the level and duration of PBV funding.
In order for an owner/developer to be considered under this RFP, the proposed project must meet all of the following eligibility thresholds:
• The proposed project must be located in the City of Culver City.
• The proposed project must not have started at the time of selection for PBV assistance. Before selecting a new construction project, the Authority will make a site inspection to verify this condition.
• The proposed project must be ready to start construction within 18 months of selection for PBV assistance.
• Proposed projects must be located in a census tract with a poverty rate no higher than 20% based on 5-year tabulations from the American Community Survey (ACS).
• Owner/Developer must have site control or submit evidence to indicate that the needed approval/documentation for site control is likely to be obtained and will not delay the project; and must submit evidence that the proposed new construction is permitted by current zoning ordinances or regulations or submit evidence to indicate that the needed rezoning is likely to be obtained and will not delay the project.
• The proposed project must be financially feasible as determined by the Authority and the City’s financial analyst.
• The Proposed project must provide supportive services to project residents. Supportive services may be provided onsite or offsite. The supportive services at a minimum shall include:
o Educational and vocational training
o Transportation Assistance
o Finance and Budgeting Skills
o Childcare Assistance
o Life Skills Training
o Nutrition Support
o Mental Health Services
Factors for Scoring and Ranking Proposals
Proposed projects will be evaluated based on the following criteria:
• Experience/ Administrative Capacity- Owner/operator with experience creating affordable housing units and working with PBVs. Owner/operator shows evidence of being able to bring the project to completion and properly manage the completed project per HUD PBV rules/regulations and other requirements set by the Authority.
• Need- The extent to which the proposed housing project addresses the housing needs and proposes to provide permanent supportive housing intended to serve homeless individuals and families.
• Financial/Marketability- The proposed project’s operating budget evidence project financial stability and sustainability. Proposed rents and expenses are reasonable per market standards. Replacement and operating reserves are adequate.
FISCAL ANALYSIS
Based on an analysis performed by the City’s financial consultant, Keyser Marston and Associates (KMA) and through discussion with the HUD Los Angeles Field Office, the Authority has the budget authority to provide up to 50 PBVs for an estimated subsidy of $825,000 annually.
The allotment of PBVs under this RFP does not impact the City’s General Fund. Funding for the PBVs is through the Authority’s HUD Annual Contribution Contract (ACC). The ACC is a grant agreement between HUD and Public Housing Agencies, such as the Authority, that defines the terms and conditions of HUD funding.
ATTACHMENT
None
MOTIONS
That the City Council and Housing Authority Board:
Authorize the release of a Request for Proposals to award up to 50 Section 8 Housing Choice Voucher Project-Based Vouchers for the creation of new construction or substantial rehabilitation affordable housing projects.