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HomeMy WebLinkAbout2021-02-23 - AGENDA REPORTS - EMERGENCY RENTAL ASSIST FUNDING (2)Agenda Item: 16 P CITY OF SANTA CLARITA AGENDA REPORT NEW BUSINESS CITY MANAGER APPROVAL:1 DATE: February 23, 2021 SUBJECT: EMERGENCY RENTAL ASSISTANCE FUNDING FOR LOW- AND MODERATE -INCOME RESIDENTS DEPARTMENT: Community Development PRESENTER: Michael Villegas RECOMMENDED ACTION City Council receive a presentation on funding available through the federal Emergency Rental Assistance program for low- and moderate -income residents, and provide direction to staff on which option to pursue. BACKGROUND The Consolidated Appropriations Act, signed into law on December 27, 2020, authorized $25 billion in federally -funded emergency rental assistance to support low- and moderate -income households nationwide that are unable to pay rent and utilities due to the COVID-19 pandemic. The U.S. Department of Treasury (Treasury Department) provided funds to states, local governments with a population that exceeds 200,000, U.S. Territories, and Indian tribes. The City of Santa Clarita (City) received a direct allocation from the Treasury Department in the amount of $6,332,235 to provide emergency rental assistance to eligible households within the City's boundaries. As a condition of this funding, the City would be required to design a program in accordance with the requirements set forth by the Treasury Department. Funds must be used for direct financial assistance, including rental, rental arrears, and utilities and home energy costs, for a covered period not to exceed 12 months per household. In order to establish eligibility, at least one or more individuals of the household must meet the following criteria: • Qualifies for unemployment or has experienced a reduction in household income, incurred significant costs, or experienced a financial hardship due to COVID-19; • Demonstrates a risk of experiencing homelessness or housing instability; • Has a household income at or below 80 percent of area median income (AMI); and, • Is not receiving any other federally funded rental assistance Page 1 Packet Pg. 82 Additionally, the City would be required to prioritize assistance to eligible households that include an individual who has been unemployed for the 90 days prior to application for assistance and households with income at or below 50 percent of AMI. Separately, on January 29, 2021, Governor Newsom signed Senate Bill 91 (SB 91) into law, which appropriated the State of California's (State) direct allocation from the Treasury Department and established the parameters under which the State Rental Assistance Program (SRAP) must operate. Pursuant to SB 91, landlords participating in the SRAP would receive 80 percent of any unpaid rent owed from April 1, 2020, through March 31, 2021, and agree to forgive the remaining 20 percent. If a landlord chooses not to participate, the tenant can receive 25 percent of unpaid back rent directly. Assistance for prospective rental payments is additionally capped at 25 percent and subject to funding availability. In addition, the SRAP provides three rounds of funding with priority on households at or below 50 percent of AMI. The State is making individual block grants available to local governments with a population of over 200,000 who are willing to conform their local programs to the SRAP. The City is eligible to receive a $6,815,019 block grant, which would be in addition to the $6,332,235 received directly from the Treasury Department. Should the City choose to accept the State Block Grant, the City must conform its Treasury allocation to the State's program requirements. The City currently has three options for Council to consider for the administration of the total $13.1 million in emergency rental assistance funding for eligible households. Option A — State Administered Program for both State and Federal Dollars Under this option, the State would administer the rental assistance program following State guidelines. The State would hold the $6.8 million block grant reserved for City residents and the City would remit the $6.3 million received from the Treasury to the State, for a total amount of $13.1 million. This option would require a Standard Agreement between the City and State. Option B — City Administered Program for both State and Federal Dollars Under this option, the City would develop and administer a rental assistance program following State guidelines. The City would formally request a block grant in the amount of $6.8 million from the State and combine this funding with the $6.3 million received from the Treasury, for a total amount of $13.1 million. This option would also require a Standard Agreement between the City and State. Option C — City Administered Program for Federal Dollars Only Under this option, the City would forego the $6.8 million in State funds and develop and administer a rental assistance program using the $6.3 million in Treasury funds. The program would be designed to fit the needs of City residents within the parameters set out by the Treasury. This option would require the City to enter into a Memorandum of Understanding with the State, but would not require the City to follow State guidelines. All options would follow State or Treasury guidelines and target individuals at or below 50 percent of AMI and up to 80 percent of AMI, which is currently $39,450 and $63,100 for a single -member household, respectively. It is important to note that the total household income is Page 2 Packet Pg. 83 used to determine eligibility. ALTERNATIVE ACTION Other actions as determined by the City Council. FISCAL IMPACT An additional item will be brought to the City Council, at a later date, to appropriate the revenues and make assistance payments available to eligible households. Page 3 Packet Pg. 84