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AGENDA ITEM NO. 10.
CITY OF HAWTHORNE City Council AGENDA BILL For the meeting of 01/27/2026 Originating Department: Planning |
City Manager:
Department Head:
SUBJECT:
Joint Powers Agreement (JPA) to participate in the South Bay Regional Housing Trust (SBRHT).
RECOMMENDED MOTION:
That the City Council approve joining the SBRHT and authorize the Mayor to execute the JPA, which will help fund the development and construction of affordable housing in the South Bay.
DISCUSSION:
BACKGROUND
As part of a REAP 2.0 project funded through SCAG, the South Bay Cities Council of Governments (SBCCOG) is creating a South Bay Regional Housing Trust (SBRHT). If formed, the SBRHT will help fund the development and construction of affordable housing units in cities that are members of the Trust, and only for development projects supported by the City in which it is proposed. Although the SBCCOG is leading the early feasibility work, the SBRHT will be a separate joint powers authority with its own Board of Directors. Four cities must approve the JPA for the SBRHT to form.Over the past year, the SBCCOG’s consultant, CivicHome, has been developing a SBRHT strategic plan, joint powers agreement, staffing plan, budget, and programs for the SBRHT Board to consider adopting when formed. A strategic plan advisory committee consisting of SBCCOG Board members, City staff, housing experts/, and affordable housing developers provided input over a series of four meetings throughout the process. CivicHome presented an update to the SBCCOG Board at its October 2025 meeting and to the South Bay City Managers group on November 19th. At its meeting on November 20, 2025, the SBCCOG Board of Directors voted to recommend member agencies move forward with the formation of the SBRHT.
DISCUSSION
Since the SBCCOG began working on the SBRHT, more information about funding coming to the South Bay through Measure A has become available. In particular, the SBCCOG will be receiving approximately $7.3 million annually through the Los Angeles County Affordable Housing Solutions Agency's (LACAHSA) “Production, Preservation, and Ownership (PPO)” program. LACAHSA also has agency matching funds that may be available and could increase that amount to around $14 million. Additionally, these funds, along with other Measure A funding, could be used to offset most or all the SBRHT administrative costs, particularly during the startup period.The SBCCOG is limited in its use of LACAHSA funds in ways that the Housing Trust would not be. Primarily, the SBCCOG is not allowed to make or develop loans, so all allocations of PPO funds made by the SBCCOG would have to be in the form of grants or subsidies. These funds would be given out to a project and never returned for additional use. The SBRHT will have lending authority and could also provide soft development loans, construction and pre-development loans, preservation and acquisition stakes, master leasing, and direct service or homebuyer assistance programs. These approaches will be revenue generating and allow for these public dollars to come back to the Trust over time and be reprogrammed to maximize their use. The San Gabriel Valley Regional Housing Trust (formed several years ago) is generating over $230,000 annually in interest and loan fee revenue.
Although there will be administrative costs to operate the SBRHT, SBCCOG staff believes that most or all those costs could be covered through administrative dollars available through LACAHSA’s programs. This will allow for the SBRHT to offer low to no membership fees, particularly during the first year or two as the organization gets formed. Orange County and Gateway Cities trusts have also started with little or no membership fees and have been able to offset them through administrative funding received through grants and other funding going into their trusts. It is important to note, however, that whether there will be membership costs for the SBRHT after the first year will be determined by the Trust Board of Directors, not the SBCCOG. For the first year, start-up costs can be covered completely with the LACAHSA funds that the SBCCOG received with SBCCOG Board approval.
If the SBRHT is not formed and the SBCCOG ultimately provides grants using PPO funds, many administrative costs will still be incurred. For example, the SBCCOG will still be required to hire consultant experts to evaluate and vet the housing developments seeking grant funding. These costs are practically unavoidable but are covered through Measure A funding.
Pending Legislation to Modify SBRHT
SBCCOG staff has been working with SBCCOG Legal Counsel and Senator Allen’s office to explore amendments to the initial SBRHT formation legislation. Although modeled on legislation for other trusts such as the one in San Gabriel Valley, several items have been re-evaluated since passage of that bill (SB 1444). The amendments being sought include:
- Removing the SBCCOG from involvement in determining the number of SBRHT Board of Directors, their selection, and the responsibility for filling vacancies.
- Adding language to provide flexibility for the SBRHT Board to determine when they choose their Chair and Vice-Chair.
- Addition of the ability to fund the development and construction of moderate-income housing.
- Allowing member agencies to appoint non-elected officials for SBRHT Board alternates
When a bill to revise SB 1444 is drafted, the SBCCOG will be soliciting support letters from South Bay cities to encourage the Legislature to approve these changes. Despite these pending changes, the SBCCOG Board of Directors recommends approval of the SBRHT JPA with its current language and would recommend SBRHT members approve an amended JPA in the future after any SB 1444 revisions are enacted. The current JPA is written to follow the current SB 1444 language and was developed by the South Bay City Managers working group and SBCCOG Legal Counsel Michael Jenkins.
ECONOMIC DEVELOPMENT STRATEGIC PLAN:
Goal 5: Develop a strategy for major developments.
FISCAL IMPACT:
There is no immediate fiscal impact associated with approving the South Bay Regional Housing Trust Joint Powers Agreement. If determined necessary and approved by its Board of Directors in the future, membership dues may be required.
NOTICING PROCEDURE:
72 hours posted notice pursuant to the Ralph M. Brown Act.