REPORT TO THE CITY COUNCIL
FROM: JERRY DYER, Mayor
Office of Mayor & City Manager
BY: MATTHEW GRUNDY, Deputy Mayor
Office of Mayor & City Manager
KELLI FURTADO, Chief of Staff
Office of Mayor & City Manager
SUBJECT
Title
Actions related to the One Fresno Housing Strategy:
1. ***RESOLUTION - Approving funding for the Voucher Incentive Program (Subject to Mayor’s Veto); and
2. Affirm the City Manager’s finding that the Fresno Housing Authority is uniquely qualified to implement the Voucher Incentive Program; and
3. Approve a State and Local Fiscal Recovery Funds Agreement under the American Rescue Plan Act (ARPA) with Fresno Housing Authority for $1,000,000 to implement the Voucher Incentive Program
Body
RECOMMENDATION
Staff recommends approval of funding for the Voucher Incentive Program as recommended in the One Fresno Housing Strategy.
EXECUTIVE SUMMARY
On December 9, 2021, the City Council elected to use a portion of the City’s State and Local Fiscal Recovery Funds (SLFRF) allocation under the American Rescue Plan Act (ARPA) 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.
As part of the fiscal year 2023 budget planning cycle efforts, Mayor Dyer announced allocation of $40 million dollars of ARPA funding to support the execution of the One Fresno Housing Strategy (Housing Strategy). This was codified by City Council in its adoption of the Fiscal Year 2023 Budget on June 30, 2022.
The Voucher Incentive Program aims to assist up to 500 existing, low-income Housing Choice Voucher holders who are unable to lease-up and leverage existing vouchers. The program will be implemented by the Fresno Housing Authority, who is uniquely qualified to administer. The Voucher Incentive Program will establish signing incentives designed to attract both new partner landlords and new affordable units in high opportunity areas, assist tenants with deposits and credit checks, establish a damage repair fund, and offer vacancy loss payments.
BACKGROUND
As part of the Housing Strategy, the Administration is advancing several action items related to the Voucher Incentive Program. The program will be funded with $1 million dollars in SLFRF funds and administered by the Fresno Housing Authority, to assist up to 500 low-income households.
Fresno Housing Authority is a public housing authority responsible for the administration of affordable housing programs, including the Housing Choice Voucher program and an Emergency Housing Voucher program. While the number of vouchers available does not fluctuate often, current market conditions have exasperated the housing crisis. Vacancy rates in Fresno have stagnated around 2-3%, which has driven up the price of rent. On average, approximately 1,000 low-income households who have already been issued vouchers, are actively searching for housing, and are unable to secure (lease-up) safe, affordable-housing using their valuable vouchers. Over the course of the past five years, the Housing Choice Voucher program has experienced a decline in successful lease-up rates by 30%. Currently, only one in three families who receives a voucher can successfully lease-up. For two out of three, this means they will never get the opportunity to leverage or use their housing assistance, facing unnecessary rent-burden.
Recognizing the importance in securing and preserving more affordable units, and to increase the number of property owners and landlords participating in Frenso Housing Authority programs, they launched a small-scale landlord incentive pilot effort ending December 2021. The six-month pilot effort led by Fresno Housing Authority resulted in approximately 140 additional homes made available for voucher holders, 92 of which were new units. Best practices and lessons learned from the pilot effort helped craft the proposed Voucher Incentive Program, adding several enhancements landlords and voucher holders expressed as being essential.
Property owners and landlords are a key partner in Fresno’s fight against the housing affordability crisis. The Voucher Incentive Program aims to increase the number of property owners renting units to voucher holders, resulting in up to 500 low-income families having greater choice and opportunities for housing stability.
The proposed Voucher Incentive Program does not create a new voucher system but improves leasing success rates for existing voucher holders and assists low-income families through a variety of program elements. Signing incentives will encourage new landlords to join Fresno Housing Authority and rent to voucher holders. The program incentivizes housing units that are made available in Small Area Fair Market Rent Payment Standard, or high opportunity neighborhoods. Housing stability in areas of high opportunity deconcentrates poverty, desegregates neighborhoods and provides higher rates of upward mobility and outcomes for children. The Voucher Incentive Program will also assist residents struggling with housing barriers, such as security deposits, credit check fees and much more. Landlords will have access to a damage repair fund, although according to Fresno Housing Authority, it is a myth that voucher holders cause more damage to housing units than non-voucher tenants.
Prioritization:
VOUCHER HOLDERS: While all eligible Housing Choice Voucher holders and Emergency Housing Voucher holders may benefit from the Voucher Incentive Program, funds will be prioritized for the following voucher holders:
• Families
• Seniors
• Persons with Disabilities
• Veterans
• Households in temporary or emergency shelters, and/or unhoused
• Length of time vouchers have been unused/length of time on the list
• Households who have received a certificate from a tenant education program
PRIVATE LANDLORDS: While eligible landlords can apply to become Fresno Housing partner landlords, funds from the Voucher Incentive Program will be prioritized as follows:
• Small, “mom and pop” landlords (own no more than 10 units)
• New Landlords to Fresno Housing
• Landlords with properties having no code violations in last 12 months
• Landlords with vacancies
ENVIRONMENTAL FINDINGS
Pursuant to California Environmental Quality Act (CEQA) Guidelines Section 15378, this item is not a project for the purposes of CEQA. 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
This grant agreement is not subject to local preference.
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:
Resolution
Uniquely Qualified Memo
Agreement