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Home My WebLink About2026-01-27 - AGENDA REPORTS - FY 2025-26 LACO AFFORDABLE HOUSING ANNUAL BUDGETO Agenda Item: 6 CITY OF SANTA CLARITA .` AGENDA REPORT CONSENT CALENDAR CITY MANAGER APPROVAL: DATE: January 27, 2026 SUBJECT: FISCAL YEAR 2025-2026 LOS ANGELES COUNTY AFFORDABLE HOUSING SOLUTIONS AGENCY ANNUAL BUDGET FOR MEASURE A FUNDS DEPARTMENT: Community Development PRESENTER: Tracy Sullivan RECOMMENDED ACTION City Council: Approve the Fiscal Year 2025-26 budget for Los Angeles County Affordable Housing Solutions Agency funding and authorize its submission. 2. Increase Measure A LACAHSA revenues and corresponding appropriations as follows: increase revenue account 275-462101 (LACAHSA PPO) by $2,424,030 and appropriate the same amount to expenditure account 2753208-517101; increase revenue account 277-462101 (LACAHSA TA) by $147,707 and appropriate the same amount to expenditure account 2773210-516102. 3. Authorize the City Manager or designee to execute all contracts and associated documents, subject to City Attorney approval. BACKGROUND The Los Angeles County Affordable Housing Solutions Agency (LACAHSA) was established through Senate Bill (SB) 679 (Chapter 557, Statutes of 2024) as a regional entity responsible for administering voter -approved funding to support affordable housing solutions throughout Los Angeles County (County). Funding for LACAHSA is provided through Measure A, a permanent one-half cent countywide sales tax approved by County voters in November 2024. Measure A revenues are intended to support the production and preservation of affordable housing, renter protections, and homelessness prevention efforts across the County. Page 1 Packet Pg. 43 O Under SB 679, the City of Santa Clarita (City) is designated as an Eligible Jurisdiction and is therefore entitled to receive a direct annual allocation of Measure A funds from LACAHSA. Fiscal Year (FY) 2025-26 marks the City's first year of receiving Measure A funding directly from LACAHSA. FISCAL YEAR 2025-26 ALLOCATION For FY 2025-26, the City's Measure A allocation from LACAHSA totals $3,457,981 in baseline funding. The allocation is primarily based on the City's share of the County's overall lower - income housing need established through the Regional Housing Needs Assessment (RHNA) and will be subject to change every year based upon consumer spending in the County. In addition, due to the City's participation in LACAHSA's planning process, LACAHSA is providing 5 percent in one-time matching funds for Renter Protection and Homelessness Prevention, bringing the City's total allocation to $3,502,293. As required by LACAHSA, the City's FY 2025-26 allocation is divided into three funding categories as summarized below: LACAHSA Funding Category FY 2025-26 Allocation Administering Agency Production, Preservation, and Ownership $2,424,030 city Technical Assistance $ 147,707 City Renter Protection and Homelessness Prevention RPHP $ 886,244 LACAHSA LACAHSA 5% Match for RPHP one-time $ 44,312 ILACAHSA Total 1 $3,502,293 LACAHSA BUDGET PROCESS To receive Measure A funds, the City is required to submit an annual budget to LACAHSA describing how the fiscal year allocation will be used. The budget must be approved by the City Council, each year, prior to submission to LACAHSA. For this initial year of funding, LACAHSA adopted Transitional Program Guidelines (Guidelines) and established a February 1, 2026, deadline for Eligible Jurisdictions to submit proposed budgets. In accordance with the Guidelines, City staff has prepared the FY 2025-26 budget, which is provided as an attachment and summarized below. The budget is intended as a planning document, and any expenditures will follow the City's Purchasing Policy, requiring further City Council action above established thresholds. PROPOSED USE OF FUNDS BY CATEGORY Production, Preservation, and Ownership (PPO) - Administered by City The intent of the PPO category is to support the production, preservation, and ownership of Page 2 Packet Pg. 44 O affordable housing through investments that help close financing gaps and accelerate development. In the City's FY 2025-26 budget, PPO funds are proposed to provide direct project investments to address financing gaps for affordable housing development. Funding will support entitled affordable housing projects in need of gap financing and/or incentivize additional affordable housing projects to help meet RHNA production targets. This approach reflects direction provided by the City Council during the October 2025 Study Session on Affordable Housing, which recommended a grant program to facilitate affordable housing development in the City. Technical Assistance (TA) - Administered by City The intent of the TA category is to provide resources for Eligible Jurisdictions to obtain professional expertise to support the planning, design, and administration of their housing programs. In the City's FY 2025-26 budget, TA funds are proposed to retain a professional consultant to design and implement the City's PPO program. A consultant will ensure the program is structured in accordance with all applicable legal requirements, best practices in affordable housing finance, and market conditions. The consultant will develop program guidelines, eligibility criteria, funding priorities, and administrative procedures, including monitoring, reporting, and compliance protocols. Once the PPO program design is complete, it will return to the City Council for consideration. Renter Protection and Homeless Prevention (RPHP) - Administered by LACAHSA Renter Protection and Homeless Prevention funds are intended to address housing instability, reduce evictions, and prevent people from falling into homelessness. Program requirements are designed to provide temporary, short-term assistance to Santa Clarita residents who are currently housed in order to prevent the loss of housing or resolve a housing crisis in a timely manner. Staff recommends that LACAHSA administer the RPHP program on the City's behalf, in collaboration with the City. As the designated Countywide administrator of Measure A funds, LACAHSA provides centralized program oversight and ensures compliance with program requirements, which helps streamline the City's administrative responsibilities while supporting coordinated delivery of RPHP services. Throughout program implementation, the City will work closely with LACAHSA to ensure that program activities reflect local priorities and that assistance is targeted to eligible Santa Clarita residents, consistent with all program and legal requirements. The one-time matching funds provided by LACAHSA for the City's participation in the planning process are required to be applied to the RPHP program, thereby increasing the total resources available to support residents at risk of housing instability. Inclusive of the 5 percent match, LACAHSA will administer a total of $930,556 in RPHP funds on the City's behalf for FY 2025- 26. Program delivery is expected by July 1, 2026. Page 3 Packet Pg. 45 O NEXT STEPS Upon City Council approval, the FY 2025-26 budget will be submitted to LACAHSA for final approval. Following LACAHSA's approval, staff will begin the process of soliciting proposals for a consultant to develop the PPO program. Consideration of awarding a contract for the consultant will return to the City Council for approval. The PPO incentive program, once developed by staff and the consultant, will be brought before the City Council for approval prior to solicitation of grant proposals and distribution of funds. ALTERNATIVE ACTION Other actions as determined by the City Council. FISCAL IMPACT Approval of the FY 2025-26 LACAHSA budget will increase Measure A revenues and corresponding appropriations in the City's budget. Revenue account 275-462101 (LACAHSA PPO) will increase by $2,424,030 with a corresponding appropriation to expenditure account 2753208-517101. Revenue account 277-462101 (LACAHSA TA) will increase by $147,707 with a corresponding appropriation to expenditure account 2773210-516102. In addition, $930,556 from the City's FY 25-26 allocation, inclusive of a 5 percent match from LACAHSA, will be retained by LACAHSA to administer an RPHP program on the City's behalf. The FY 2025-26 LACAHSA budget is fully supported by Measure A revenues and will have no net impact on the General Fund. ATTACHMENTS FY 25-26 Draft LACAHSA Budget Page 4 Packet Pg. 46 6.a Attachment A 2025-26 LACAHSA Budget for the City of Santa Clarita Eligible Category Activity Detail PRODUCTION, . OWNERSHIP (PPO) Developer incentive program for new construction of affordable PPO Direct Project Investments housing projects in Santa Clarita 2,121,026 1 2,121,026 PPO Administration (12.5%) Administration of PPO Program 303,0041 1 303,004 RENTER PROTECTIONS AND HOMELESSNESS PREVENTION Total PPO (RPHP) 2,424,0301 1 2,424,030 Twenty percent expenditure requirement for legal services and renter Legal Services and Renter Education education to be administered fully by LACAHSA. 177,249 8,862 186,111 Temporary rental assistance for homelessness prevention to be Emergency Rental Assistance administered fully by LACAHSA. 708,995 35,450 744,445 Total RPHP 886,2441 44,312 930,556 TECHNICAL ASSISTANCE (TA) PPO Program Design, Administration, Monitoring Consultants and training to support PPO Program development, and Evaluation implementation, and compliance monitoring. 129,244 129,244 TA Administration (12.5%) Administration of TA Program 18,463 18,463 Total TA 147,707 147,707 TOTAL ALLOCATION 3,457,981 3,502,293 Packet Pg. 47