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7.B. - Page 4 of 79 TOTAL HOME $ 980,158 *Two -Year Grants The City operates a two-year grant cycle for the public service, fair housing, and minor home repair grant types. Fiscal year 2020-2021 marks the first year of a new grant cycle. The organizations recommended for funding in the 2020 Action Plan will also be recommended for funding in the 2021 Action Plan, subject to funding availability and subrecipient performance. **Habitat for Humanity — 612 Jefferson Project In 2017, Habitat for Humanity received approval from the Planning Commission and City Council (on appeal) for a 20 -unit, affordable housing development at 612 Jefferson. This project is a for -sale project for low-income homeowners. The project was the subject of a lawsuit from an adjacent property owner. While Habitat for Humanity was able to settle the lawsuit, the project was significantly delayed which led to construction cost increases. Habitat pulled building permits in January 2020 and has started construction. The project has received the following funding commitments from the City: • Land Acquisition —$232,384 from CDBG • Predevelopment Costs — $360,000 from CDBG • Construction - $1.425 million from Housing In -Lieu Fees • Construction - $2.5 million from Housing Impact Fees (pending) • Total - $4,512,384 In light of the COVID-19 pandemic, staff has reevaluated all of its funding sources to see how the City can maximize its response to COVID-19 and, in particular, meet the needs of low-income residents impacted by COVID-19. In FY 2019-20, the City Council made a commitment of $360,000 from CDBG funds, in the form of a grant, to the Habitat project for predevelopment costs. However, after evaluating this project further, staff has determined predevelopment costs is not a good use of CDBG funds and creates several administrative and reporting challenges. Therefore, staff is recommending the City Council change the funding source of the $360,000 grant from CDBG to affordable housing impact fees, within the Affordable Housing Fund. Currently, the City has $2,072,206 available in the Affordable Housing Fund. Staff will return to City Council with a grant agreement for approval. This proposed action will free up an additional $360,000 in CDBG funding that is recommended to be used support the City's COVID-19 emergency assistance program, since the City cannot use housing impact fees to support this type of program. The $360,000 will be used to provide emergency rental, mortgage, and/or utility assistance to low-income households who have experienced income loss due to COVID-19. This $360,000 allocation to the COVID-19 emergency assistance program is contingent on changing the funding source for the Habitat grant from CDBG to affordable housing impact fees. In February 2019, Habitat for Humanity requested an additional $2.5 million in funding to cover construction cost increases. The City Council made a soft commitment of $2.5 million from affordable housing impact fees, as the City did not have sufficient funds available to make a firm funding commitment. The City had anticipated receiving affordable housing impact fees from another development project however those funds are not forthcoming, as anticipated. Therefore, the HHCC has Page 4 of 6 AL . City of Redwood City 1017 Middlefield Road, Redwood City, CA. 94063 Tel: 650-780-7000 www.redwoodcity.ore 465