Staff recommends that the City Council:
1. Open public meeting on this topic;
2. Accept public comments;
3. Close public meeting;
4. adopt the resolution to authorize the application and amend the PLHA Plan for the Permanent Local Housing Allocation Program.

The Permanent Local Housing Allocation (PLHA) provides permanent, ongoing funding allocated over five-year planning periods under the Building Homes and Jobs Act (SB 2, 2017). SB 2 established a $75 recording fee on documented real estate property transfers and provides dedicated funding for local affordable housing-related projects and programs that assist in addressing unmet housing needs.
The first cycle PLHA Guidelines detailed various eligible activities for funds aimed at increasing housing accessibility. Such activities include:

• Activity 1 - The predevelopment, development, acquisition, rehabilitation, and preservation of multifamily, residential live-work, rental housing that is affordable to extremely low-,very low-, low-, or moderate-income households, including necessary operating subsidies.
• Activity 2 - The predevelopment, development, acquisition, rehabilitation, and preservation of affordable rental and ownership housing, including accessory dwelling units (ADUs), that meets the needs of a growing workforce earning up to 120 percent of AMI, or 150 percent of AMI in high-cost areas. ADUs shall be available for occupancy for a term of no less than 30 days.
• Activity 3 - Matching portions of funds placed into local or regional housing trust funds.
• Activity 4 - Matching portions of funds available through the Low- and Moderate-income Housing Asset Fund pursuant to subdivision (d) of HSC Section 34176.
• Activity 5 - Capitalized reserves for services connected to the preservation and creation of new permanent supportive housing.
• Activity 6 - Assisting persons who are experiencing or at risk of homelessness, including, but not limited to, providing rapid rehousing, rental assistance, supportive/case management services that allow people to obtain and retain housing, operating and capital costs for navigation centers and emergency shelters, and the new construction, rehabilitation, and preservation of permanent and transitional housing.
• Activity 7 - Accessibility modifications in lower-income owner-occupied housing.
• Activity 8 - Efforts to acquire and rehabilitate foreclosed or vacant homes and apartments.
• Activity 9 - Homeownership opportunities, including, but not limited to, down payment assistance.
• Activity 10 - Fiscal incentives made by a county to a city within the county to incentivize approval of one or more affordable housing projects, or matching funds invested by a county in an affordable housing development project in a city within the county, provided that the city has made an equal or greater investment in the project. The county fiscal incentives shall be in the form of a grant or low-interest loan to an affordable housing project. Matching funds investments by both the county and the city also shall be a grant or low-interest deferred loan to the affordable housing project.

ANALYSIS:
The first five-year cycle of PLHA allocations (2019-2023) granted the City of Hawthorne $3,541,577. The City’s original five-year PLHA plan and status are summarized in the following table:

Table 1: Original PLHA Plan

Funding Allocation Year	Award Amount	Planned Activity	Funds Drawn Down?	Funds Expended?
Year 1 (2019)	$612,819	Activity 6	Yes	Yes
Year 2 (2020)	$952,511	Activity 6	Yes	Yes
Year 3 (2021)	$1,048,208	Activity 2	Yes	Yes
Year 4 (2022)	$525,365	Activity 2	No	No
Year 5 (2023)	$402,674	Activity 2	No	No

Year 4 and Year 5 allocations have historically been intended to support a housing development on the City-owned property immediately south of 14115 Cordary Avenue (APN 4051-030-902). Staff previously understood that multifamily rental housing was eligible under Activity 2. However, the State of California Department of Housing and Community Development (HCD), which administers PLHA, has clarified that Activity 2 is intended for projects consisting of four units or fewer and that the Cordary project is eligible under Activity 1. Accordingly, HCD is allowing the City to amend Years 4 and 5 of the PLHA Plan to reallocate the funds from Activity 2 to Activity 1. The City will continue to use Years 4 and 5 PLHA funds for the Cordary project as previously planned, after accounting for the allowable 5% administrative allowance.
The City’s PLHA plan amendment will reflect the following:

Table 2: PLHA Plan Amendment

Funding Allocation Year	Award Amount	Planned Activity
Year 1 (2019)	$612,819	Activity 6
Year 2 (2020)	$952,511	Activity 6
Year 3 (2021)	$1,048,208	Activity 2
Year 4 (2022)	$525,365	Activity 1
Year 5 (2023)	$402,674	Activity 1

The attached Exhibit, Section 302(c)(4) PLHA Plan, further details the PLHA plan amendment as formatted by HCD. After the plan amendment is authorized by Council, staff will initiate the fund drawdown from HCD for the Cordary project.
 

Not applicable.

72 Hours posted notice pursuant to the Ralph M. Brown Act.