Title
Adopt a Resolution to Approve and Authorize the City Manager to Negotiate and Execute an Agreement with Bay Area Community Services (BACS) to Manage the Permanent Local Housing Allocation (PLHA) Homelessness Prevention Rental Assistance Shallow Subsidy Program for an Eighteen-Month Period within the Fiscal Years 2025-2026 and 2026-2027 In An Amount of $1,368,952
Staffreport
COUNCIL PRIORITY
• Housing and Homelessness
SUMMARY
In 2020, the City of San Leandro submitted its PLHA Five-Year Plan (2019-2023) and PLHA Application to the California Department of Housing and Community Development (HCD) (Attachment B). As a PLHA entitlement jurisdiction, the City of San Leandro is estimated to receive $2,099,970 in grant funds over this five-year period.
On July 20, 2020, the City Council adopted the PLHA Five-Year Plan, which included affordable housing development. The PLHA Five-Year Plan was amended in May 2024 to redirect a portion of funds given the local need to prevent and address homelessness (Attachment C). A portion of the funds were redirected to provide rental assistance for people at risk of homelessness through a Shallow Subsidy program.
Shallow rental subsidy programs are partial rent payments made on behalf of a tenant directly to their landlord to reduce their household rent burden and increase their available income. Attachment D provides an overview of San Leandro’s proposed Rental Assistance Shallow Subsidy Program, including the proposed program design and budget.
On July 14th, the City issued a Request for Proposal (RFP) to select a provider to manage the PLHA Homeless Prevention Rental Assistance Shallow Subsidy program for an 18-month period. The City of San Leandro received three competitive proposals, which were carefully reviewed and scored based on rubric outlined in the RFP. The two applicants with the highest scores advanced to the interview round held on September 23rd and 24th. Through this process, BACS was selected as the most qualified provider.
BACS has 72 years of experience supporting vulnerable populations in Alameda County, and nearly 30 years of specialized experience working with unhoused adults. Currently, BACS manages a portfolio of approximately $2.5 million per month in shallow subsidies across the wider Bay Area region.
RECOMMENDATIONS
Staff recommend Council adopt the attached resolution (Attachment A) authorizing the City Manager to negotiate and execute an agreement with BACS to manage the PLHA Homeless Prevention Rental Assistance Shallow Subsidy program for an 18-month period within the Fiscal Years 2025-2026 and 2026-2027 in an amount of $1,368,952.
BACKGROUND
As of the February 2024 Point-In-Time (PIT) Count, there are 284 people experiencing homelessness in San Leandro, which is a 31% reduction in overall homelessness since the last PIT Count in 2022. The City of San Leandro continues to invest in housing and homelessness efforts, which includes the implementation of the PLHA Five-Year Plan.
In September 2017, Governor Brown signed the Building Homes and Jobs Act, which established the PLHA Program and provided funding through recording fees on real estate documents to increase the supply of affordable homes in California.
On July 20, 2020, the City Council approved submittal of the PLHA application to the CA Department of HCD for 2019-2023 PLHA funding and approved the PLHA Five-Year Plan for use of an estimated $2,099,760 in grant funds. In fiscal year 2024-2025, the City used its first tranche of PLHA funds to provide the 15101 Washington Avenue affordable housing project with a $349,960 predevelopment loan. On May 20, 2024, the City amended the PLHA Five-Year Plan (2019-2023) and submission to California Department HCD. The amended PLHA Five-Year Plan redirects $1,370,432 in funding to address the local need to prevent and address homelessness. The amendment reallocated years 2-5 funding to two new programs:
1. Rental assistance for people at risk of homelessness
2. Lewelling Interim Homeless Shelter and Navigation Center operator cost
Under the PLHA program, funding is provided through formula grants to entitlement jurisdictions such as the City of San Leandro based on the formula prescribed under federal law for the Community Development Block Grant (CDBG) program over a five-year funding period.
As outlined in the amended PLHA Five-Year Plan, the City must identify funds for and develop a shallow subsidy program for extremely low-income and high rent burden households. On July 14th, the City issued a Request for Proposal (RFP) to select a provider to manage the PLHA Homeless Prevention Rental Assistance Shallow Subsidy program for an 18-month period. The City of San Leandro received three competitive proposals, which were carefully reviewed and scored based on rubric outlined in the RFP. The two applicants with the highest scores advanced to the interview round held on September 23rd and 24th. Through this process, BACS was selected as the most qualified provider.
Analysis
BACS has 72 years of experience supporting vulnerable populations in Alameda County, and 30 years of specialized experience working with homeless adults. BACS has provided supportive services to more than 100,000 people and helps more than 20,000 people each year. BACS provides regional value given the existing partnerships with the cities of Oakland, Berkeley, Hayward, as well as throughout Alameda County, and Northern and Central California. Their current portfolio includes over 65 programs, with 45 of those based in Alameda County alone.
BACS is committed to safeguarding the privacy and conditionality of all individuals served through their programs and adheres to all applicable federal and state laws, including HIPPA. Confidentiality policy governs the use and disclosure of Protected Health Information, financial records, and any personally identifiable information. Every employee is trained in privacy and confidentiality practices upon hire and receives annual refresher trainings.
BACS’ successes specific to rental assistance include:
• Over 92% of the people BACS has helped keep their housing have maintained their housing.
• Administered more than $75 million in rental subsidies.
• Processes over $2.5 million in rent payments monthly to landlords (supporting over 10,000 landlords).
Shallow rental subsidies are a strategy to prevent and address homelessness. Shallow rental subsidies are partial rent payments made on behalf of a tenant directly to their landlord to reduce their household rent burden and increase their available income. They are different from deeper subsidies, like those provided through permanent supportive housing programs, which provide enough assistance to ensure renters only pay 30% of their income in rent. It also differs from guaranteed income or universal income programs, which typically provide funds without spending restrictions.
Shallow subsidies are an important solution in the suite of tools for stemming the in-flow of people and families into homelessness, as highlighted by Alameda County’s Home Together 2026 plan and the Regional Action Plan (RAP) developed by the Bay Regional Impact Council and endorsed by the City of San Leandro City Council in October 2021. The Home Together plan recommends focusing prevention resources on those most likely to lose their homes, including implementing and expanding shallow subsidy availability for people with fixed or limited income with housing insecurity to relieve rent burden and reduce the risk of becoming homeless. Both reports highlight the need for flexible subsidies, including shallow subsidies, for halting the inflow of people into homelessness in the region.
The City’s Shallow Rental Subsidy program will have an economic impact on both the specific households served as well as the broader San Leandro community. The program will reduce the housing cost burden and increase the available income for approximately 70 households per year for an 18-month period. Those served will be at risk for homelessness, meaning that more households will be able to remain housed in San Leandro. This puts less economic stress on existing services that support individuals experiencing homelessness, including emergency response services, the criminal justice system, emergency shelters, and other essential services. In addition, the State requires entitlement jurisdictions to use PLHA program funds on eligible activities that increase access to affordable housing. To receive PLHA program funds, the City of San Leandro is required to implement the PLHA Five-Year Plan, which has been reviewed and adopted by a resolution of the City Council. This strategy supports the Housing and Homelessness Council priority.
Previous Actions
• On July 20, 2020, the City Council approved the City’s PLHA Five-Year Plan (2019-2023) and submittal of the PLHA Application to HCD for an estimated $2,099,760 in grant funds.
• October 2021, Council endorsed the Regional Action Plan (RAP) developed by the Bay Regional Impact Council.
• On May 20, 2024, the City Council adopted a resolution to amend the City of San Leandro’s PLHA Five-Year Plan (2019-2023), and authorized submittal of the Amended PLHA Plan and Amended Plan Application to the California Department HCD.
Legal Analysis
The City Attorney reviewed the documents and agreements and approved them as to form.
Financial Impacts
The PLHA Shallow Rental Subsidy program is funded through the State of California’s HCD and will have no impact on the City’s General Fund.
ATTACHMENTS
A: Resolution to authorize the City Manager to negotiate and execute agreement with BACS
B: Original PLHA Five-Year Plan (2019-2023)
C. Amended PLHA Five-Year Plan (2020-2023)
D. Overview of San Leandro’s Rental Assistance Shallow Subsidy Program
E. Homelessness Prevention Rental Assistance Shallow Subsidy Program RFP
PREPARED BY: Pedro Naranjo, Manager, Human Services Department
APPROVED BY: Jessica Lobedan, Director, Human Services Department