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Presentation, discussion and possible action on approval of a HOME-ARP Allocation Plan Amendment to change the method of distributing funds for nonprofit capacity building/operating cost assistance and non-congregate shelter to be released for public comment
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RECOMMENDED ACTION
recommendation
WHEREAS, under Section 3205 of the American Rescue Plan (ARP) Act, the Texas Department of Housing and Community Affairs (TDHCA) was allocated $132,969,147 of HOME-ARP Program funds from the U.S. Department of Housing and Urban Development (HUD);
WHEREAS, HUD requires a HOME-ARP Allocation Plan amendment when changing methods of distribution for eligible activities;
WHEREAS, staff has identified method of distribution changes that will improve program flexibility and targeting in relation to the non-congregate shelter and non-profit capacity building/operating cost assistance activities and is therefore presenting the amendment to the Board reflective of such changes; and
WHEREAS, upon Board approval of the HOME-ARP Plan Amendment, the Plan will be made available for at least 15 days of public comment;
NOW, therefore, it is hereby
RESOLVED, that should the comment received on the HOME-ARP Plan not require significant revisions of the Plan, staff is hereby authorized to make appropriate revisions and proceed with submission of the Plan to HUD without returning to the Board; and
FURTHER RESOLVED, that the Executive Director and his designees be and each of them hereby are authorized, empowered, and directed, for and on behalf of the Department, to post on the Department’s website and to publish a notification in the Texas Register, the applications for the activities within the HOME-ARP Plan Amendment.
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BACKGROUND
TDHCA was allocated $132,969,147 of funds from the U.S. Department of Housing and Urban Development (HUD) under Section 3205 of the American Rescue Plan Act, which HUD has called the HOME-ARP Program. HUD issued waivers and new activities from HOME annual funds for HUD-ARP per CPD Notice 21-10.
The approved HOME-ARP Plan programmed funds into acquisition/development or rehabilitation of noncongregate shelters, development of affordable rental housing, nonprofit capacity building funds, nonprofit operating funds, and administration/planning.
The amendment presented before the Board changes the method of distribution for half of the nonprofit capacity building funds and nonprofit operating assistance funds ($3,324,229), and all of the noncongregate shelter funds ($56,511,887).
Capacity building expenses are defined as reasonable and necessary general operating costs that will result in expansion or improvement of an organization’s ability to successfully carry out eligible HOME-ARP activities. As stated in the amendment, the nonprofit capacity building and operating assistance must specifically expand the ability of the organization to develop a NCS. Operating expenses are defined as reasonable and necessary costs of operating the nonprofit organization. HOME-ARP funds used for operating expenses must be used for the “general operating costs” of the nonprofit organization. These operating costs must not have a particular final cost objective, such as a project or activity, and must not be directly assignable to a HOME-ARP activity or project. The eligible operating expense assistance activities are payroll, training, equipment, and overhead/operating, as listed in HUD CPD Notice 21-10.
The nonprofit organization awarded NCO assistance must use the funds to prepare to develop and own an NCS project in the submitted Application to the Department. Per HUD CPD Notice 21-10, NCS is defined as “one or more buildings that provide private units or rooms as temporary shelter to individuals and families and does not require occupants to sign a lease or occupancy agreement” (page 55). The future NCS project must be occupied by qualified populations (QP) for HOME-ARP, including persons experiencing homelessness; persons who were formerly homeless but housed with temporary resources; persons at-risk of homelessness; persons at greatest risk of housing instability; and individuals fleeing or attempting to flee, domestic violence, dating violence, sexual assault, stalking, or human trafficking.
In order to streamline the funding process, the NCO funds will be awarded in areas that meet criteria demonstrating need for a noncongregate shelter. This includes areas with 400 or more unsheltered homeless persons reflected on the 2023 point in time count; fair market rent by county for 1-bedroom units that increased 20% or more over the last five years; and HUD-published fair market rents for FY 2023 within the top 15% of the state, at above $930.
TDHCA’s Executive Director anticipates creating a list of specific nonprofit organizations for Part I inviting them to apply and will then make award recommendations to TDHCA’s Governing Board for the award of NCO funds which will include a reservation of funding for the future NCS, as a Part II of the invitation. To be recommended for an award nonprofit organizations would need to meet criteria as outlined in the HOME-ARP Allocation Plan Amendment and in the areas identified in the amendment. The criteria for a nonprofit organization includes being in good standing by passing several administrative review processes; having a current annual operating budget of at least $500,000; agreeing to follow applicable regulations; agreeing to receive both nonprofit capacity building and nonprofit operating funds; having prior experience in innovative shelter programs and related service provision; committing to provide a plan and strategy for NCS Development; agreeing to having a primary part of the NCS Development; and submitting materials for a 50+ unit NCS within 16 months of the NCO Board award (which may be extended up to six months by the Executive Director for good cause).
If a nonprofit is awarded NCO Development, the NCS funds will be reserved until the time that the materials are submitted for NCS Development, no later than 16 months after the NCO Board award. The materials required for NCS Development include, but are not limited to, site information, development narrative, architectural drawings, parking requirements, annual operating expenses and demonstration that there is sufficient operating funds to support any NCS activity, offsite cost breakdown and site work cost breakdown, development cost schedule, schedule of sources, and organizational charts.
The attached Plan reflects the original HUD-approved Plan, with changes tracked reflecting the amended language. Upon approval of the draft amendment, staff will publish the amendment for comment from April 17, 2023, to May 2, 2023, which is 15 days. If no changes will be made as a result of public comment, staff requests authority for the Executive Director to proceed with submission of the Plan Amendment to HUD as approved by the Board as presented. HUD has 45 days for review.