REPORT TO THE CITY COUNCIL
FROM: JERRY DYER, Mayor
Office of Mayor & City Manager
BY: MATTHEW GRUNDY, Deputy Mayor
Office of Mayor & City Manager
PHIL SKEI, Assistant Director
Planning & Development Department
SUBJECT
Title
Actions related to the One Fresno Housing Strategy to fund a Mixed Income Neighborhood Trust:
1. Adopt a finding of Categorical Exemption pursuant to Section 15301/Class 1 of the California Environmental Quality Act (CEQA) Guidelines
2. ***RESOLUTION - Approving funding for Central Fresno Neighborhood Trust to Implement a Mixed Income Neighborhood Trust Program (Subject to Mayor’s Veto)
3. Approve a State and Local Fiscal Recovery Funds Grant Agreement with the Central Fresno Neighborhood Trust for $1,950,000 to acquire and rehabilitate 50 rent restricted affordable housing units
Body
RECOMMENDATION
Staff recommends approval of funding for the Mixed Income Neighborhood Trust (MINT) as recommended in the One Fresno Housing Strategy
EXECUTIVE SUMMARY
As part of the fiscal year 2023 budget planning cycle efforts, the City proposed the allocation of $40 million of American Rescue Plan Act (ARPA) funding to support the execution of the One Fresno Housing Strategy. This was affirmed by City Council in its adoption of the budget on June 30, 2022.
On September 29, 2022, the Mayor recommended Central Fresno Neighborhood Trust be funded with State and Local Fiscal Recovery Funds (SLFRF) funds (Exhibit “B” - SLFRF Agreement) for the acquisition and subsequent rehabilitation of 50 affordable rental housing units in central Fresno. The attached Agreement provides for the terms and conditions of the proposed eligible activities to be funded with SLFRF. Funding will be in the form of a grant that will reimburse eligible activities including acquisition of existing rental properties, rehabilitation, and leasing of the affordable rental units to income eligible households for a minimum affordability period of 55 years. Due to the needs of the local rental market, and the severe underproduction of homes for families of low- and moderate-income, the community as a whole is negatively impacted such that an income restriction of up to 80% of the annual median income (AMI) is justified in Fresno.
CFNT’s goal is to create long-term, quality affordable rental housing by acquiring properties, rehabilitating the rental units, and then leasing them to income eligible households at an affordable rent while holding title to the properties. This owner/operator structure will provide central Fresno communities with more control over how rental properties are operated, maintained, and preserved as affordable housing.
BACKGROUND
On December 9, 2021, the City Council elected to use a portion of the City’s SLFRF allocation to support the COVID-19 Public Health and Economic Response by addressing the impact on lower income households by using funds to help increase the supply of affordable housing and the creation of affordable housing, which is an eligible use of funds under the Act.
An intense four-month effort involved research, thought, and collaboration from a broad group of stakeholders, including City Staff, Councilmembers, housing developers (for-profit and non-profit), housing advocates and individuals who care deeply about the present and future state of Fresno's housing.
The One Fresno Housing Strategy incorporates input from public, community, nonprofit, philanthropic and corporate representatives. Recommendations found within this strategy took into account feedback from over 3,000 Fresnans who have formed our city's housing vision through public meetings and the crafting of various reports from 2017 to the present. At its unveiling, the strategy has been received well.
The housing component of the strategy called for a three-year investment of $101,645,000. The $40 million ARPA commitment was a key appropriation added to existing housing entitlement dollars to realize the housing strategy’s goal, and thereby make significant progress toward meeting Fresno’s housing needs. This agreement, in addition to others being considered by Council and those already implemented, account for 20 of the 47 total strategy recommendations.
What is key to realizing the desired outcomes of the strategy is its execution. The Administration firmly believes that the strategy can serve as a powerful tool and roadmap to help us make significant progress towards addressing Fresno's affordable housing and unhoused population challenges by fully executing its recommendations. The recommendations found within the strategy aim to create an environment that leads to the 3-year completion, rehabilitation, and preservation of 6,926 affordable and 4,110 market-rate housing units.
The project participants include the Lowell Community Development Corporation and Trust Neighborhoods. These two agencies have joined to co-sponsor the creation of a Mixed-Income Neighborhood Trust (MINT) known as the Central Fresno Neighborhood Trust (CFNT). If the Agreement is approved as recommended, CFNT is proposing to develop, own, and operate mixed-income, affordable rental properties throughout central Fresno neighborhoods.
Lowell Community Development Corporation has a 9-member Board with half of the Directors either residents of Lowell or a business owner in the Lowell neighborhood. Its mission is to improve the quality of life in the Lowell Neighborhood through community engagement, equitable housing, and historic diversity. Trust Neighborhoods is a non-profit organization that launched similar housing partnerships in Kansas City, Tulsa, and Boston. Developed in 2019, the non-profit works with existing neighborhood-based organizations to offer support, project management, capital raising, workshops, and similar resources to help these neighborhood organizations with their specific local community development projects. CFNT has already secured control over two small rental properties for the proposed rehabilitation activities.
ENVIRONMENTAL FINDINGS
Staff has performed a preliminary environmental assessment of this Project and has determined it falls within the Categorical Exemption set forth in CEQA Guidelines Section 15301/Class 1 (existing facilities) which exempts projects involving a negligible or no expansion of an existing facility. This exemption applies because this project involves the purchase and rehabilitation of existing multi-family housing units without expansion of the facilities. Staff has determined that none of the exceptions to Categorical Exemptions set forth in the CEQA Guidelines, Section 15300.2 apply to this project. However, any expansion of the scope of this project would be subject to additional CEQA review.
Pursuant to the Coronavirus State and Local Fiscal Recovery Funds Final Rule: Frequently Asked Questions published on July 27, 2022, NEPA does not apply to Treasury’s administration of the funds.
LOCAL PREFERENCE
Local preference was not used based upon conditions of federal funding.
FISCAL IMPACT
The source of funding for the agreement is American Rescue Plan (ARPA) funding. An appropriation of $40 million dollars in ARPA funds was made as part of the adoption of the fiscal year 2023 City Budget. The General Fund is not impacted.
Attachments:
Class 1 - CatEx - Central Fresno Neighborhood Trust
Resolution
SLFRF Agreement