TO: ADAM PIRRIE, CITY MANAGER
FROM: KATIE WAND, ASSISTANT TO THE CITY MANAGER
DATE: APRIL 23, 2024
Reviewed by:
City Manager: AP
SUBJECT:
Title
UPDATE ON THE CLAREMONT TEMPORARY HOUSING STABILIZATION AND RELOCATION PROGRAM (FUNDING SOURCE: GENERAL FUND AND AMERICAN RESCUE PLAN ACT FUND)
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SUMMARY
On April 25, 2023, understanding both the importance of keeping people housed and maintaining/increasing Claremont’s rental housing supply, staff recommended that the City Council allocate $300,000 in American Rescue Plan Act (ARPA) funding to provide rental assistance through a temporary program, known as the Claremont Temporary Housing Stabilization and Relocation Program (“Program”). The City Council voted to increase the allocation to allocate $1 million in ARPA funding towards the program, which has been providing rental assistance to Claremont households since July 1, 2023, and is currently set to sunset on June 30, 2026.
Due to the high demand for rental assistance as evident in the first cycle of the program, the total funding of $1 million may be exhausted in less than three years. Accordingly, staff recommends that the City Council allocate additional funding to extend the program. Staff has identified the additional funding source as $680,000 of the $3.4 million in proceeds from the sale of the 451 W. Arrow Highway property, representing a twenty percent “set-aside” for affordable housing.
Should the City Council allocate this additional funding, the program would be able to support additional households within the three-year program cycle and/or have the potential to extend the program beyond its current sunset date. The Program Guidelines have been revised to reflect the additional funding (pending City Council approval), and other non-substantive changes have been made to clarify some of the program’s existing processes (Attachment). No changes relating to eligibility criteria and/or subsidy amounts are being proposed.
RECOMMENDATION
Recommended Action
Staff recommends the City Council:
A. Approve the revised Program Guidelines; and
B. Appropriate $680,000 of the $3.4 million in proceeds from the sale of the 451 W. Arrow Highway property, bringing the program budget to $1,680,000 in total.
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ALTERNATIVES TO RECOMMENDATION
In addition to the recommendation, there are the following alternatives:
• Request additional information.
• Do not approve the revised Program Guidelines and/or do not allocate additional funds to the program.
FINANCIAL REVIEW
Due to the high demand for rental assistance as evident in the first cycle of the program, the total funding of $1 million may be exhausted in less than three years. Accordingly, staff recommends that the City Council allocate additional funding to extend the program. Staff has identified the additional funding source as $680,000 of the $3.4 million in proceeds from the sale of the 451 W. Arrow Highway property, representing a twenty percent “set-aside” for affordable housing. If approved, this would bring the total program budget to $1,680,000. In accordance with the rules set forth by the federal government, ARPA funding will be spent by December 31, 2026.
Since the program’s inception, rental assistance has been provided to 143 Claremont households and to date, $350,010.96 has been allocated for the first program cycle, with several additional applications pending approval.
The staff cost to prepare this report and administer this program is conservatively estimated at $65,000 so far, with staff costs on-going depending upon the volume of applications received. This cost is currently being absorbed by Administrative Services and Financial Services Departments’ operating budgets.
ANALYSIS
On April 25, 2023, understanding both the importance of keeping people housed and maintaining/increasing Claremont’s rental housing supply, staff recommended that the City Council allocate $300,000 in American Rescue Plan Act (ARPA) funding to provide rental assistance through a temporary program, known as the Claremont Temporary Housing Stabilization and Relocation Program (“Program”). The City Council voted to increase the allocation to allocate $1 million in ARPA funding towards the program, which has been providing rental assistance to Claremont households since July 1, 2023, and is currently set to sunset on June 30, 2026.
Due to the program’s success, significant staffing resources have been required to review applications, meet with applicants, and process payments. Staff estimates that 120+ payments are issued each month, which has resulted in an approximate 15-20 percent increase in workload for Accounts Payable alone. Staff in the City Manager’s Office have also had to dedicate several hours each month towards this program, adding to already-full workloads. Although this program has resulted in more staff time than originally anticipated, now that there is an internal application processing plan in place, staff feels as though the City is able to maintain the current program, which will remain temporary in nature unless the City Council directs otherwise.
At the March 12, 2024 City Council meeting, staff identified a portion of the proceeds from the sale of the 451 W. Arrow Highway property, in the amount of $680,000, as a potential source of funding to extend the Program. This amount represents a twenty percent “set-aside” of the property sale proceeds for affordable housing. The City Council indicated their support for the use of the $680,000 to provide additional funding for the rental assistance program. Staff recommends the appropriation of this funding and if approved, this would bring the total program budget to $1,680,000.
Should the City Council appropriate this additional funding, the program would be able to support additional households within the three-year program cycle and/or have the potential to extend the program beyond its current sunset date. The Program Guidelines have been revised to reflect the additional funding (pending City Council approval), and other non-substantive changes have been made to clarify some of the program’s existing processes. No changes relating to eligibility criteria and/or subsidy amounts are being proposed.
RELATIONSHIP TO CITY PLANNING DOCUMENTS
Staff has evaluated the agenda item in relationship to the City’s strategic and visioning documents and finds that it applies to the following City Planning Documents: Council Priorities, Sustainable City Plan, Economic Sustainability Plan, General Plan, 2022-24 Budget.
CEQA REVIEW
This item is not subject to environmental review under the California Environmental Quality Act (CEQA).
PUBLIC NOTICE PROCESS
The agenda and staff report for this item have been posted on the City website and distributed to interested parties. If you desire a copy, please contact the City Clerk’s Office.
Submitted by:
Katie Wand
Assistant to the City Manager
Attachment:
Revised Program Guidelines