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HomeMy WebLinkAboutReso - CC - 083-2025 RESOLUTION NO. 083-2025 RESOLUTION OF THE CITY COUNCIL OF THE CITY OF BURLINGAME ESTABLISHING AFFORDABLE HOUSING FUND GOALS AND PRIORITIES AND AUTHORIZING THE CITY MANAGER TO ESTABLISH AND ADMINISTER A NOTICE OF FUNDING AVAILABILITY FOR DISBURSEMENT OF ACCRUED FUNDS IN THE AFFORDABLE HOUSING FUND WHEREAS, on June 19, 2017, the City Council adopted Ordinance No. 2000, establishing Commercial Linkage Fees for new commercial development (codified in Burlingame Municipal Code Chapter 25.44 et seq.) and establishing Residential Impact Fees for new multi-unit residential development (codified in Burlingame Municipal Code Chapter 25.45 et seq.); and WHEREAS, these two fees are intended to provide a dedicated source of funding for programs supporting affordable housing and affordable workforce housing in Burlingame; and WHEREAS, in 2023, the City convened the Housing, Opportunities, Priorities and Education (HOPE) Community Advisory Committee, which developed recommendations on what type of projects the City should consider funding with the Affordable Housing Fund; and WHEREAS, the City Council wishes to use the HOPE Committee’s recommendations as a basis for establishing Affordable Housing Fund Goals and Priorities and a Notice of Funding Availability; and WHEREAS, on July 7, 2025 the City Council reviewed a draft Affordable Housing Fund Goals and Priorities document (Exhibit A) and a draft Notice of Funding Availability (Exhibit B) for the disbursement of accrued Commercial Linkage Fees and Residential Impact Fees to produce, preserve, and protect affordable housing and affordable workforce housing. NOW, THEREFORE, BASED ON THE STAFF REPORT, AND THE WRITTEN AND ORAL TESTIMONY AT THE HEARING, THE CITY COUNCIL OF THE CITY OF BURLINGAME RESOLVES AND ORDERS AS FOLLOWS: 1. The above recitals are true and correct and are material to this Resolution and are incorporated into this Resolution as findings of the City Council. 2. The City Council approves and establishes the Affordable Housing Fund Goals and Priorities (Exhibit A). Docusign Envelope ID: FDA91954-4F02-4521-9245-D4AA72B2AE31 3. The City Council approves the Notice of Funding Availability (NOFA) (Exhibit B), and the City Manager is hereby authorized and directed to administer the NOFA on behalf of the City of Burlingame, with terms substantially consistent with the terms outlined in this resolution, subject to such minor modifications as may be approved by the City Manager in consultation with the City Attorney. Peter Stevenson, Mayor I, Meaghan Hassel-Shearer, City Clerk of the City of Burlingame, do hereby certify that the foregoing Resolution was introduced at a regular meeting of the City council held on the 7th day of July 7, 2025, and was adopted thereafter by the following vote: AYES: Councilmembers: Brownrigg, Colson, Pappajohn, Stevenson, Thayer NOES: Councilmembers: None ABSENT: Councilmembers: None ABSTAIN: Councilmembers: None Meaghan Hassel-Shearer, City Clerk Exhibits: A - Affordable Housing Fund Goals & Priorities B - Notice of Funding Availability Docusign Envelope ID: FDA91954-4F02-4521-9245-D4AA72B2AE31 CITY OF BURLINGAME AFFORDABLE HOUSIING FUND GOALS AND PRIORITIES PURCHASE EXISTING MULTI-UNIT RESIDENTIAL PROPERTIES Loan or award funding to acquire, preserve and maintain naturally occurring affordable housing (NOAH). DEVELOP CITY-OWNED OR PUBLIC AGENCY OWNED LAND Loan or award funding to acquire City-owned land or land owned by other public agencies (e.g., school district or health care district) to build affordable multi-unit residential projects. FUND MIXED-INCOME MULTI-UNIT RESDENTIAL PROJECTS Loan or award funding to a project building deed-restricted affordable housing to lower-income households with a priority emphasis for projects including on-site childcare facility space. City of Burlingame 501 Primrose Road Burlingame, CA 94010 www.burlingame.org Docusign Envelope ID: FDA91954-4F02-4521-9245-D4AA72B2AE31 AFFORDABLE HOUSING FUNDS NOTICE OF FUNDING AVAILABILITY CONTACT US Joseph Sanfilippo Economic Development and Housing Specialist (650) 558-7264 jsanfilippo@burlingame.org Docusign Envelope ID: FDA91954-4F02-4521-9245-D4AA72B2AE31 City of Burlingame Affordable Housing Funds NOFA 2 OVERVIEW The City of Burlingame is announcing the availability of local funds for affordable housing projects in Burlingame (the “Program”). The funding will be provided as part of an ongoing program, and projects will be reviewed as they are received. The Affordable Housing Funds Notice of Funding Availability (NOFA) is intended to support City Council allocation of any available funds in FY2025-26 and FY2026-27. There is no deadline to apply under this NOFA but please check with the City before applying to confirm the availability of funds. The City’s primary objectives for this NOFA are to: • Create new affordable housing; • Preserve existing affordable housing; • Preserve properties occupied by low-income renters; and • Preserve or create the greatest number of affordable housing units possible by funding projects with the lowest per unit subsidy cost to the City. City staff will consider these objectives when evaluating Applications, as well as threshold eligibility requirements and project-specific criteria described in this document. Applicants are responsible for reviewing this NOFA and all relevant exhibits and attachments to ensure project eligibility and consistency with the above Program objectives. Applicants should seek additional funds to minimize the cost to the City of Burlingame. The City is seeking Applications that demonstrate: • An understanding of the community, the unique attributes, and opportunities of the neighborhood where the project would be located; • Experience successfully developing, preserving, and/or managing affordable housing; and • Commitment to and experience in managing public participation processes. A. Eligibility Requirements 1. Eligible Applicants Eligible applicants may submit one or more Applications under this Affordable Housing Funds NOFA . Organization Type - Eligible applicants include for-profit or nonprofit corporations, general or limited partnerships, joint ventures, joint powers authorities, or limited liability companies. Experience - Applicants must have demonstrated experience and capacity in the management, preservation, and/or development of affordable housing. Applicants must Docusign Envelope ID: FDA91954-4F02-4521-9245-D4AA72B2AE31 City of Burlingame Affordable Housing Funds NOFA 3 have experience and capacity in at least three projects. This experience may include ongoing management of affordable housing properties, management of affordable housing rehabilitation projects, and/or construction of new or conversion of existing buildings to produce affordable housing. 2. Eligible Costs Costs eligible for City funds include any costs of the project, such as acquisition, hard costs, soft costs, developer fees, and reserves related to the development, preservation, or rehabilitation of projects, in accordance with the underwriting guidelines contained herein. Program funds may be used to pay off a bridge/acquisition loan for preservation projects acquired within six months of Application submission. 3. Eligible Projects This NOFA intends to solicit a wide array of eligible project types, including but not limited to: • New construction of affordable housing for rent or ownership, including mixed-use projects or mixed-income projects, providing up to 49% of the units affordable to lower- income households; • New construction of affordable housing for rent or ownership, including mixed-use projects or mixed-income projects, providing up to 49% of the units affordable to lower- income households that incorporate space for onsite childcare facilities; • Rehabilitation of existing affordable housing; • Preservation of existing multi-family affordable housing nearing the end of affordability terms; • Conversion of existing deed restricted units to deeper income affordability; • Conversion of unrestricted units occupied by low-income tenants to income-restricted housing; • Adaptive reuse/conversion of existing buildings into affordable housing, providing up to 49% of the units affordable to lower-income households; • Acquisition of building or land to build or preserve affordable housing; and • Affordable housing-related predevelopment activities. Income limits for each category of affordability for the City of Burlingame and San Mateo County are as follows: Income Limits by Household Size ($) Income Category Household Size Income Category 1 2 3 4 5 6 Extremely Low (30% AMI) $41,150 $47,000 $52,900 $58,750 $63, 450 $68,150 Very Low (50% AMI) $68,550 $78, 350 $88,150 $97,900 $105,750 $113,600 Docusign Envelope ID: FDA91954-4F02-4521-9245-D4AA72B2AE31 City of Burlingame Affordable Housing Funds NOFA 4 HOME Limit (60% AMI) $82,260 $94,020 $105,780 $117,480 $126,900 $136,320 Low (80% AMI) $109,700 $125,350 $141,000 $156,650 $169,200 $181,750 Source: County of San Mateo, Department of Housing, 2025 County Income Limits, April 30, 2025: https://www.smcgov.org/media/154289/download?inline=), B. Funding The source of funds for this NOFA are generated by private market development through the payment of residential impact fees and/or commercial linkage fees, held in the City of Burlingame’s Affordable Housing Fund. As such, the availability of funds may vary over time, and there is no guarantee that funds will be available to fully fund a project request. Long-term financing is generally available in the form of a 55-year loan, depending on the circumstances of the project’s financial need and other funding sources. The loan must be secured by a promissory note and deed of trust, and a regulatory agreement securing project affordability. Loans will be residual receipts notes and require a split of residual receipts between the project sponsor, the City, and other lenders, if any. C. Required Project Information and Selection Process City staff cannot approach the City Council to request an award of funds until the Application is complete and it has been reviewed for eligibility and determined whether it meets the criteria set forth herein. Given that applicants may face circumstances where they cannot produce certain documentation (for example, the developer does not yet have sufficient site control to complete a property needs assessment), prospective applicants are encouraged to meet with City staff prior to Application so that City staff can provide guidance. Funding Applications will be reviewed on a first-come, first-served basis. All projects that meet the minimum criteria below will be eligible for funding. If multiple projects have applied within a 60 day period, p rojects that meet the threshold will be scored against each other (see Evaluation Criteria). The City will use the Evaluation Criteria to score eligible projects to determine the priority for awarding funds. D. Minimum Criteria for Evaluation (Applicable to All Projects) 1. The Application must be complete. 2. The funding request must be within the amount available (at the time of the request). 3. The Application must meet the Program requirements. 4. The applicant must meet the eligible applicant, project, and cost criteria as outlined in Section A. 5. All projects must meet the underwriting criteria outlined in Section F. Docusign Envelope ID: FDA91954-4F02-4521-9245-D4AA72B2AE31 City of Burlingame Affordable Housing Funds NOFA 5 6. Applicants with existing City loans must be in good standing with the City’s annual monitoring requirements. 7. Applicants must have site control. A purchase and sale agreement, option, disposition and development agreement, exclusive negotiating agreement, or grant deed are acceptable forms of evidence of site control. Applicants with only an offer to purchase may be considered for funding, but final approval is contingent upon having site control as defined above. 8. Requested funds must fill a financing gap or pay off short-term financing, such as a bridge loan or acquisition loan. The project must not already be fully funded with permanent financing, and the City funds cannot replace other permanent funding on the project. Exceptions to this rule will be made only when a permanent funding source is no longer financially viable. 9. Applicants must be in compliance with all local, state, and federal laws. The Affordable Housing Funds NOFA Application instructions, Application form, and other Application supporting materials are designed to assist the City Council in determining whether to award funding. The materials should describe how each project would meet City goals and priorities for affordable housing in Burlingame. More information on the City’s affordable housing needs can be found online at the Burlingame Housing Element Page, located at https://www.burlingame.org/268/Housing- Element. Staff will review all Applications for completeness and verify that the applicant and project are eligible. Applicants may be requested to provide additional information or tours of similar projects in their portfolio. Staff will score Applications and make funding recommendations to the City Council for consideration. The City Council will be the final decisionmaker on all Applications. E. City Underwriting Guidelines Affordable Housing Funds Program Loan Underwriting Guidelines Item Requirement Loan Term 55 Years Interest 3% annual simple interest, paid from residual receipts. Docusign Envelope ID: FDA91954-4F02-4521-9245-D4AA72B2AE31 City of Burlingame Affordable Housing Funds NOFA 6 Regulatory Term 55 years from the Certificate of Occupancy for new construction or upon the closing of financing for preservation projects. Income Limits Up to 80% Area Median Income (AMI). Refer to the County website for current income limits https://www.smcgov.org/housing/income-limits- and-rent-payments Maximum Rents (Including Utility Allowances) Lower Income, as published by the County at https://www.smcgov.org/housing/income-limits- and-rent-payments Utility Allowances Utility allowances, as published by the County of San Mateo (see https://www.smcgov.org/housing/utility- allowance-schedules) must be subtracted from gross rents for any utilities paid by tenants, to determine the actual rent paid by tenants. The developer must outline any monthly fees that may be charged to tenants. All required monthly fees must be included in the Utility Allowance. For projects within 0.5 miles of any existing high- quality transit corridor, parking fees can be excluded from the Utility Allowance if renting a parking space is not required. Rent Increases Maximum rents published by the County (see above) or 5% annually, whichever is less. City Monitoring Fee Except where not allowed by law (AB2430) $125/unit per year. Developer Fee (new construction projects) 5% to 10% of total project costs, depending on project complexity and size. Any deferred developer fees may be paid after all required operating costs and asset management fees but prior to residual receipts payments. Construction Management Fee (preservation projects) 5% to 10% of hard costs, depending on project complexity and size. Replacement Reserves Replacement reserve funding covers the cost of all repairs needed through year 15 of the project as described in a Property Needs Assessment (PNA) prepared by a qualified third-party consultant. The reserve must include a 3% price escalator, if not included in the PNA. Docusign Envelope ID: FDA91954-4F02-4521-9245-D4AA72B2AE31 City of Burlingame Affordable Housing Funds NOFA 7 The reserve can be funded through an initial reserve deposit at acquisition or loan closing, or through annual deposits from cash flows (or a combination thereof). A minimum of $500 per unit per year is required if the initial reserve deposit does not cover 50% of the 15-year PNA cost. Capitalized Operating Reserves Minimum 3 months’ expenses, including: hard debt, monitoring fees, and replacement reserves. Vacancy Loss Percentage Minimum 5% for residential units and 20% for any commercial space. Debt Coverage Ratio 1.15, except for the purchase/restriction of existing units, which may have a DCR of 1.1 over the first two years of the project and 1.15 thereafter. Subsidy Limit $300,000/unit Asset Management Fee Lesser of $1,000/unit per year or $25,000/year with a 3.5% escalator. Subordination The City will subordinate its deed of trust to public and private lenders that require it as a condition of funding. City will not subordinate its regulatory agreement to any deed of trust but will subordinate its regulatory agreement to a senior lender’s regulatory agreement. Insurance See Exhibit A Hard Cost Contingency At least 10% of hard costs, including general requirements, overhead, profit, and contractor’s contingency. Soft Cost Contingency At least 5% of all costs except acquisition, hard costs, reserves, and developer fees. Contingency Funds Contingency funds shall first be used to cover cost over runs, and the remainder shall be deposited into the replacement reserve. Relocation Displacement or permanent relocation of existing tenants is not allowed. Temporary relocation during renovation is allowed. All relocation must follow local, state, and federal relocation laws. Docusign Envelope ID: FDA91954-4F02-4521-9245-D4AA72B2AE31 City of Burlingame Affordable Housing Funds NOFA 8 Property Welfare Tax Budget must clearly show when the property welfare tax exemption is expected to begin, if applicable. F. Application Submittal Requirements Applications will be accepted anytime until funds are expended. The Application should be submitted to Joseph Sanfilippo, Economic Development and Housing Specialist, via email at jsanfilippo@burlingame.org. Applications are to be straightforward, clear, concise, and specific to the information requested. For Applications to be considered complete, the applicant must provide responses to all information requested. Submission to this Program is at the applicant’s expense and no part of the costs of preparation shall be reimbursed by the City. Applications in whole or in part are NOT to be marked confidential or proprietary. The City may refuse to consider any Application or part thereof so marked. Applications submitted in response to this Program may be subject to public disclosure. The City shall not be liable in any way for disclosure of any such records. Under the California Public Records Act, all documents submitted in response to this Program are considered part of the public record and will be made available to the public, upon request. Applications must include the following, in the following order: 1. Cover letter with applicant name, amount requested, project location, and project summary (max 1 page). 2. Description of the project, including units, incomes served, occupancy status, special populations served (if applicable), commercial spaces (if any), on-site amenities, neighborhood amenities, and accessible units (if any) (max 2 pages). 3. Map identifying location of project. 4. Rent roll dated within 30 days of Application with lease start date, rent, and subsidy information (if applicable). 5. Description of the applicant, including years of experience, types of projects, role in projects, and key principals with contact information (max 2 pages). Docusign Envelope ID: FDA91954-4F02-4521-9245-D4AA72B2AE31 City of Burlingame Affordable Housing Funds NOFA 9 6. Organizational documents from the State, organizational chart, non-profit status (if applicable), and operating agreements for partnerships. 7. Last 3 Years of Audited Financial Statements of entity or principals. Small organizations that do not conduct audits may request a waiver but must submit 3 years of their financial statements (balance sheets and annual profit and loss statements), and three most recent years of their IRS Form 990. For individuals, 3 years of tax returns may be accepted. 8. List of properties developed or preserved within the last 10 years that include Applicant’s role, funding sources, income levels served, acquisition/new construction/rehabilitation/preservation, special populations served, and total development costs. 9. Description of property management company, including years of experience and types of projects managed (max 2 pages). 10. Proof of site control with a date that extends through the acquisition closing (deed, purchase/option contract, lease, exclusive negotiating agreement, Disposition and Development Agreement). 11. Schedule listing key dates through turnover of over-income tenants (if applicable), full lease-up, including acquisition, funding Applications (if applicable), inspections completed, acquisition closing, building permits (if applicable), rehabilitation start and completion (if applicable), etc. 12. Appraisal dated within 60 days of the Application. 13. Preliminary title report dated within 60 days of the Application. 14. Property inspections, as applicable (lead, asbestos, mold, seismic, structural) 15. Proof of Planning approvals, if applicable. 16. Budget spreadsheets with unit mix by bedroom type and income restriction, development sources and uses, operating budget, 20-year cash flow, and debt coverage ratios. Applicants should provide the information in a spreadsheet (not a PDF) that provides substantially similar information. 17. Financing commitments, if any. 18. Operating subsidy commitment, if applicable. 19. Supportive services plan and budget (if applicable) including FTE, staff/client ratios, types of onsite and offsite services, memorandums of understanding between external service provider (if applicable), and funding commitment documents. 20. Relocation Plan and Budget, if applicable. Docusign Envelope ID: FDA91954-4F02-4521-9245-D4AA72B2AE31 City of Burlingame Affordable Housing Funds NOFA 10 21. Physical Needs Assessment with replacement reserve analysis completed within 6 months prior to the Application. 22. Signed Certifications in Exhibit B. 23. Description of any changes to the City Underwriting Guidelines requested. 24. Any other materials that the applicant believes will assist the City in evaluating the Application. Due before closing: 1. Insurance as required by Exhibit A. 2. A Phase 1 environmental assessment dated within 1 year of the Application. G. Application Evaluation Applications will be evaluated and scored based on compliance with the criteria below. Since projects are considered on a rolling basis, achievement of a particular score does not guarantee City Council approval of the Application or award of any funding, and scores among various Applications that ultimately receive grants may vary. Category Maximum Points 1. Organizational Capacity and Relevant Experience The organization is well qualified to complete and operate the project, considering years of relevant experience and the number of similar projects completed. 20 2. Nonprofit Organizations 10 3. Project Need Project clearly addresses the housing goals and priorities listed in this NOFA and the City’s Housing Element and Comprehensive Plan. 10 4. Project Design and Readiness Project design (physical and operational) is cost-effective, feasible, and compatible with the neighborhood, includes green building/sustainability considerations, and effective in meeting the stated goals and objectives. Applicant is ready and able to apply for other financing upon issuance of conditional funding award. 20 5. Budget and Financial Management Financial Management points are based on clean financial audits and a strong record of financial and regulatory compliance at other projects owned or managed by the applicant. 15 6. Percentage and depth of Affordability 15 Docusign Envelope ID: FDA91954-4F02-4521-9245-D4AA72B2AE31 City of Burlingame Affordable Housing Funds NOFA 11 Points are awarded based on the percentage and depth of affordability of units in the project. For example, projects that are 49% income restricted at 80% of AMI will get 10 points, and if the project is 49% affordable and half the units are at 60% of AMI and half are at 80% of AMI, will get 15 points. 7. Percentage of Matching Funds Points are awarded based on the following formula: No match: 0 points 100% to 199% match: 5 points 200% to 299% match: 10 points 300% match or more: 15 points 10 Total Points Available 100 H. Application and Evaluation Timeline Please send application materials to Joesph Sanfilippo, Economic Development and Housing Specialist, via email at jsanfilippo@burlingame.org. Typical application processing times are in business days as follows: Program Application Process Timing/Duration Application Submission Ongoing Staff initial review of complete Applications 10 days Submittal of additional information, if requested by staff 5 days Staff final review 5 days Staff notification of results 10 days Recommendation made to City Council Dependent on City Council schedule City Loan Closing Within 6 months of award I. Funding Award Recommendations At the conclusion of the Application evaluation process, applicants will be notified by letter and email of the funding award recommendation(s), if any, by the City. To receive an award, City staff must make a recommendation to the City Council for approval. An approval by the City Council may be conditional and include requirements that must be met before final funding is approved. J. Questions/FAQs All questions must be submitted to Joseph Sanfilippo, Economic Development and Housing Specialist, via email at jsanfilippo@burlingame.org. The City will periodically post on its website a list of questions and answers. Docusign Envelope ID: FDA91954-4F02-4521-9245-D4AA72B2AE31 City of Burlingame Affordable Housing Funds NOFA 12 K. General Information 1. Revisions The City Manager or designee, in his/her sole discretion, is authorized to make changes to the City Underwriting Guidelines. Alternatively, the City Manager or designee may request that the City Council consider and approve changes to the City Underwriting Guidelines. If any such changes are made, the City will post an addendum to this NOFA on the City of Burlingame website. 2. Expense of Preparation The City is not responsible for any expense incurred in preparation of submittals or taking any action in connection with the process, or for the costs of any services performed in connection with submittal, interviews, or approval process. 3. Modifications Applicants may not modify their submittal, except in direct response to a request from the City for clarification. Any submittal and proposed information items must be valid for at least 180 days after submission. 4. City Loan Documents Available upon request. 5. Contact Information Questions and technical assistance regarding this Affordable Housing Funds NOFA may be directed to Joseph Sanfilippo, Economic Development and Housing Specialist, via email at jsanfilippo@burlingame.org 6. City Reservation The City of Burlingame reserves the unqualified right to request additional information from applicants, reject any and all Applications (including incomplete and ineligible Applications), discuss modifications to Applications with the applicants, waive any irregularities in the submittal requirements, or cancel, suspend, or amend the provisions of this NOFA. Submission of an Application in response to this NOFA constitutes agreement on the part of the applicant to comply with this and all other rules and conditions of this NOFA. The City reserves the right to refuse funding for any and all Applications and the City reserves the right to award funds to more than one applicant. Commented [MG1]: See above question about definition of “Guidelines.” If this term is referring to the NOFA document, and the document is approved by the City Council, then the CM can only make amendments if the Council delegates authority to the CM in its resolution. Docusign Envelope ID: FDA91954-4F02-4521-9245-D4AA72B2AE31 City of Burlingame Affordable Housing Funds NOFA 13 EXHIBIT A – INSURANCE REQUIREMENTS Property Coverage. Evidence of insurance demonstrating fire, lightning, and extended coverage insurance on the facility in a form of commercial property policy, in an amount equal to one hundred percent (100%) of the then current replacement cost of the facility, excluding the replacement cost of unimproved real property constituting the site. Proof of Coverage Related to Site Control. Evidence of insurance as required by those documents demonstrating site control as described in Section D.7. Docusign Envelope ID: FDA91954-4F02-4521-9245-D4AA72B2AE31 City of Burlingame Affordable Housing Funds NOFA 14 EXHIBIT B – APPLICANT CERTIFICATIONS Applicant hereby certifies under penalty of perjury: 1. Truth of Application That the information submitted in the project application and any supporting materials is true, accurate, and complete to the best of our knowledge. Applicant acknowledges and understands that if facts and/or information herein are found to be misrepresented or otherwise false, funding may not be granted or may be withheld. 2. Applicant Will Abide by Program Rules That if Applicant is successful in receiving funds as a result of this Application, it will abide by all applicable rules and regulations governing the Program. 3. Applications are Public Records That Applicant acknowledges that the information submitted as part of this application may be made available to the public pursuant to a request under the California Public Records Act. 4. Material Changes to Project That Applicant acknowledges that any material changes to the project not disclosed to and approved by the City may result in termination of funding for the project. Material changes include but are not limited to: changes to the project’s design, amenities, and number and size of units; changes to the development budget; changes to the proposed sales prices, rents or operating expenses; changes to the sources, amounts or terms of financing; changes to the ownership entity or key staff and consultants identified in the Application, or changes to other Application items. 5. Acknowledgement of Financing Commitment Timeline That Applicant acknowledges their understanding that after receiving approval for the project’s financing commitment, the project will be subject to commitment and expenditure deadlines as applicable to the rules and regulations governing the Program for which funding is sought. Applicant Name and Title: Organization: ___________________________________ ______________________________________ Signature Date ___________________________________ ______________________________________ Docusign Envelope ID: FDA91954-4F02-4521-9245-D4AA72B2AE31 Burlingame HOPE Community Advisory Committee Report June 2023 1 HOPE Community Advisory Committee Members’ Input to Burlingame City Council June 9, 2023 The City of Burlingame convened a Community Advisory Committee (CAC), known as the “Housing Opportunity, Priorities, and Education (HOPE)” committee, to help the Burlingame City Council shape guidelines for the disbursement of the City’s housing funds. The Council Housing Fund Subcommittee, comprised of Mayor Michael Brownrigg and Vice Mayor Donna Colson, identified community members representing a range of experiences and relationships with different parts of the Burlingame community. Over a dozen community members participated in some part of the HOPE Committee’s proceedings. Nine CAC members have chosen to be part of an ongoing discussion with staff and the Council Subcommittee. The following report shares highlights from the Committee’s four public meetings. BACKGROUND: THE OPPORTUNITY & CONTEXT The City’s housing funds are generated by commercial linkage fees, which are a non-recurring source of revenue, tied to what commercial development projects get approved and built. These funds complement other ways that affordable housing can be provided in Burlingame for people who have incomes below the Area Median Income (AMI) – such as affordable units built as part of market rate residential developments in lieu of impact fees or “naturally occurring affordable housing” from landlords who charge rents below market rate. Another current example of a way to stimulate affordable housing is the Village at Burlingame where the City donated land to a development instead of direct financial support. The City of Burlingame recently completed its first draft Housing Element for the 2023-2031 cycle. Providing access to homes for people with very low and extremely low income was identified as a priority. During the HOPE CAC discussions and with support from industry experts, it has been clarified that the housing funds generated by commercial linkage fees need to have a use that relates to providing housing for Burlingame’s workforce, based on the premise that commercial development generates new jobs and, by extension, increased housing demand. Therefore, to be clear about intent, the Committee referred these funds as funds affordable workforce housing. Burlingame HOPE Community Advisory Committee Report June 2023 2 HOPE COMMUNITY ADVISORY COMMITTEE INPUT Committee members were invited in to join the HOPE Community Advisory Committee in January 2023. The first two meetings were conducted on Zoom (January 25 and February 15) and the third and fourth meetings were in person on March 29 and April 12 at the Burlingame Community Center. The HOPE CAC has a webpage and Q&A resources (www.burlingame.org/HOPE). While the group was not charged with reaching consensus, many interests and perspectives overlapped through the four meetings. 1 – CLARIFYING PURPOSE – The Who and Why Committee members were presented with the demographics of who lives and works in Burlingame, as well as information about pay rates for different types of jobs compared to Adjusted Area Median Income (AMI). Affordable housing policy and financing uses the nomenclature of Extremely Low Income (ELI), Very Low income (VL), Low and Moderate. Across the Committee, there was broad confirmation of a deep-seated interest in helping Burlingame both retain and increase socio-economic and occupational diversity. Multiple voices explicitly stated respect for the value and dignity of all professions, independent of pay scale. When asked whether they wanted to prioritize housing opportunities for ELI, VL, Low or Moderate income, a majority of Committee members expressed an interest in wanting to help all of those categories. Some were particularly dedicated to helping extremely low and very low-income households because they need the most assistance. A few others specifically indicated that they wanted to include housing opportunities for people earning closer to the median income because they see a "missing middle” in terms of housing supply. Burlingame HOPE Community Advisory Committee Report June 2023 3 Several of the meetings included discussion of specific types of households and work categories that could be supported. Examples of what was shared: - People making less than $50,000 (<50% of Area Median Income (AMI)) - Households making 60-80% of AMI (income range for professions such as teachers, public service employees, etc.) - Low-income families (single head of household as well as other family configurations) – a recurring theme was to provide children with a stable home with access to good schools and expanded opportunities - Essential workers making minimum wage – e.g., caregivers; early childhood educators - Employees that sustain small businesses – retail, restaurants - Low-wage workers for larger employers, such as housekeepers at hotels, to reduce long commutes By the fourth CAC meeting, after several specific types of potential residents were discussed, a majority of the Committee landed on a broad priority category of “people who work in Burlingame” as long as they met the income criteria. Some specifically called out public employees as a first priority, but most preferred a less restrictive criteria screen since the need for workforce housing crosses all sectors of employment. For a given set of affordable homes that would be offered, some suggested an eligibility hierarchy of: - People who work in Burlingame - People who live in Burlingame - People who work in San Mateo County - People who live in San Mateo County The above were discussed as criteria for eligibility to be offered and move into an affordable home. After that, Committee members did not want residents to have to move out if they got a raise, got married or increased their income in other ways. Several on the HOPE CAC articulated different approaches to give people a chance to improve their opportunities. For example, if household income increased, hold rent stable to enable savings to add to education tuition and/or build a nest egg for future home ownership. Another way the Committee thought through the “who” for these affordable housing funds was to discuss the “why” of how Burlingame as a community will benefit. Across the four meetings CAC members identified these important benefits from providing more accessible housing for the priority groups: - Community diversity - Social and economic diversity - Inclusion - Sustaining the labor pool that sustains small businesses and/or local businesses - Greater responsiveness and stability in public services - Burlingame can continue to be a model for pro-housing practices - Providing current/new residents with low income more access to quality schools and pathways to success - Reducing long commutes and associated negative impacts on the environment and also on social/emotional well-being Burlingame HOPE Community Advisory Committee Report June 2023 4 2 – BALANCING PRIORITIES – The What: Preferred Possibilities Many approaches were considered about how to achieve community value from these funds for affordable workforce housing. During the committee meetings, staff and members shared examples that clustered into these basic categories: Contributing to Building of new housing - Multi-unit, 100% affordable - Multi-unit, mixed rate developments - ADUs on Single Family Properties if able to be Deed Restricted for low income workers Buying existing multi-unit housing Leveraging/partnering with other resources and funds, especially including publicly owned land. Any given project will have a lot of technical details and unknowns. During the Committee’s discussions, participants acknowledged that they knew they were not recommending any specific project or scenario, but instead creating considerations and guidelines as future opportunities for affordable housing for workers are pursued and/or are presented to the City. While considering different options, the entire Committee indicated interest in a mix of possibilities, balancing projects the City could actively pursue and complete more quickly, as well as those which would require more collaboration with a longer time frame. Two types of scenarios generated the greatest interest among the CAC members: - Purchasing existing multi-unit housing in Burlingame to be able to preserve low rents and/or reduce rents - Developing City-owned land or land owned by other public agencies (e.g., possibly the school district or health care district) CAC members noted that the City purchasing existing multi-family housing would likely provide fewer units at a higher cost per unit, as opposed to a gap financing scenario where the City contributes funding to a project led by an outside developer. Some in the group envisioned an additional longer-term outcome from the City purchasing existing housing: once the City owned the land, it could redevelop it into more units overall. And it was again acknowledged that everything would be on a case-by-case basis as specific opportunities are identified. The second of the two preferred scenarios, developing multi-unit housing on public land, was a high priority for the Committee because of how it could take advantage of underutilized resources and possibly allow the City to have more control over the levels of income provided in the development. It should be noted that the Committee did not engage in any discussion of specific parcels owned by other public agencies that might be available for collaboration. That is an example of a future discussion for the Council Housing Fund Subcommittee. Of additional interest to the CAC members were scenarios of working with developers to create 100% percent affordable housing developments, or affordable housing in a mixed rate development. The housing funds generated from Burlingame’s commercial linkage fees have already contributed to one of these types of projects, Eucalyptus Grove Apartments, which presented a very favorable “gap financing” Burlingame HOPE Community Advisory Committee Report June 2023 5 way for the City to leverage $1.43 million to achieve 69 very low-income (VLI) and extremely low-income (ELI) units. During the discussions, it seemed that CAC members were better able to visualize the scenarios where the City was in a leadership role as a purchaser or collaborator on development. There were many more unknowns about the wide variety of rules, regulations, pools of layered financing and developer incentives that could come together to make a developer-led promising project. Yet, if another favorable gap financing opportunity appeared, it could likely meet the group’s criteria. There was also thoughtful discussion about subsidizing building of ADUs by single-family homeowners. Many on the Committee expressed concern about spending public funds to subsidize private gain (i.e., subsidizing ADUs for homeowners who are in a high enough income bracket that they would be able to afford to build one anyway). Yet during the conversation about this possible option, a few members were interested in pursuing this to determine interest in a scenario where a homeowner on a constraining fixed income could receive financing to build an ADU on their property if the owner would move into it themselves, and then rent the larger main home to a low-income family. In multiple meetings, some CAC members spoke to the idea of using the housing funds to support homeownership. They liked the idea of helping low income households build equity. Other CAC members indicated that they thought that other funds, rather than the commercial linkage housing fees, would be better for that goal. The committee found more common ground on the approach mentioned above of not raising rents as income increases so that people could build savings. One idea was to help people “bank” part of their rent in an account dedicated toward a future Burlingame home. 3 – SHAPING PROCESS – The How of Creating/Responding to Priorities As noted, the dynamic nature of these housing funds is such that the Community Advisory Committee understood that they were not in a position to define specific housing projects but instead had been asked to provide criteria for how to evaluate opportunities as they arise. In addition to guidance on the “who, why and what”, across the four meetings, the following types of “how” criteria have emerged for the City Council, subcommittee and staff to take into consideration for these housing funds: Burlingame HOPE Community Advisory Committee Report June 2023 6 - Agile/responsive to changing market conditions and government policies - Attend to Cost/Unit and the total number of new homes that can be created, supporting the City’s housing goals - Amount of leverage, and what kind of “good deal for the money” the City can arrange - Temper focus on cost per unit with attention to whether the City is gaining a long-term asset with future development possibilities Regarding timing, many CAC members urged the City to begin utilizing funds as soon as possible because the need is great. At the same time, there was discussion that speed should not lead to overpaying if market conditions are not yet right. Some committee members expressed interest in a possibility of using other City funds as an advance loan (for future commercial linkage fees not yet realized) if the right project presents itself. Several spoke to different ways that the City could proactively explore possibilities rather than waiting for affordable workforce housing project opportunities to arise. Regarding implementation, the HOPE Community Advisory Committee did not envision the City acting as a landlord in any scenario. If a property was purchased, there was Committee discussion about how the City of Burlingame should engage a competent cost-effective entity to manage the property. CAC members were particularly attentive to who might be displaced and urged the City to be extremely thoughtful about how people are asked to move to make new housing available. At the end of the fourth meeting on April 12, many CAC members shared their gratitude for being invited to participate in this Committee and how much they learned through the process as they Burlingame HOPE Community Advisory Committee Report June 2023 7 grappled with potential trade-offs. In turn, Council Housing Fund Subcommittee members Brownrigg and Colson expressed their gratitude to the group and what was gained through the successive discussions. As future decisions arise, the Council Housing Fund Subcommittee indicated that it may contact HOPE CAC members for additional guidance and that Committee members will be invited to milestone events for Burlingame housing. HOPE Community Advisory Committee Members: Many of these committee members have multiple affiliations. What is shown is for identification purposes. CAC members were invited to serve based on their care for the community and low-income workers in Burlingame. Rhovy Lyn Antonio & Angelina Soldatos, California Apartment Association Susan Baker, resident and SFO/Burlingame Chamber of Commerce Elizabeth Barnard, resident and Housing for All Burlingame Cathy Baylock, resident and former Councilmember Tish Busselle, St. Paul’s Episcopal Church Burlingame and Samaritan House Board Member Heather Cleary, Peninsula Family Service Dave Hopkins, resident and Sares Regis Athan Rebelos, resident and Traffic, Safety and Parking Commissioner Walker Shores, newer resident and newly appointed Planning Commissioner Burlingame City Council Subcommittee: Mayor Michael Brownrigg Vice Mayor Donna Colson City staff Kevin Gardiner, Community Development Director Joseph Sanfilippo, Economic Development & Housing Specialist Consultant support: Affordable Housing Programs Consultant: Sandy Council, Good City Company Meeting Process Design & Facilitation: Susan Stuart Clark, Common Knowledge