Costs

In her staff report, Herlihy said Capitola options to fund a loan for predevelopment costs for affordable housing.

One is the Permanent Local Housing Allocation Fund created by Senate Bill 2, the Building Homes and Jobs Act . Another is the Housing Successor Agency (formerly Redevelopment) funds.

In May, Capitola was awarded $481,732 in PLHA funds for 2020-2022, which can be used for predevelopment, development, acquisition, rehabilitation, and preservation of multifamily, residential live-work, and rental housing that is affordable to extremely low-, very low-, low-, or moderate-income households, including necessary operating subsidies.

Capitola anticipates an award of $149,426 for 2023 and 2024.

In the first round, Santa Cruz County was awarded $1,811,203 and the city of Santa Cruz $452,837, Watsonville $1,546,047, Scotts Valley, $0.

Capitola also has about $2 million in the Housing Successor Agency fund due to a recent loan payoff.

These funds may be used toward new construction of an affordable housing development to households earning 80 percent or less of the area median income — $132,800 for a family of 4.

During the June 22 City Council meeting, MidPen will introduce their team and provide a conceptual overview of the proposed project. If there is conceptual support for the project, staff recommends the City Council direct staff to prepare a loan agreement for $250,000.

If a local government does not take advance of the funds for housing, the money revert to the Housing Rehabilitation Loan Fund for the state’s Multifamily Housing Program or for technical assistance to local governments. n