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Transmittal - 1/21/2022 REDEVELOPMENT AGENCY of SALT LAKE CITY SALT LAKE CITY CORPORATION 451 SOUTH STATE STREET, ROOM 118 WWW.SLC.GOV · WWW.SLCRDA.COM P.O. BOX 145518, SALT LAKE CITY, UTAH 84114-5518 TEL 801-535-7240 · FAX 801-535-7245 MAYOR ERIN MENDENHALL Executive Director DANNY WALZ Director STAFF MEMO DATE: January 21, 2022 PREPARED BY: Danny Walz RE: Proposed Revisions to the Agency’s Housing Allocation Funds Policy REQUESTED ACTION: Consideration of a resolution repealing and replacing the RDA Housing Allocation Funds Policy POLICY ITEM: RDA Housing Allocation Funds Policy, Resolution No. R-4-2021 BUDGET IMPACTS: Not applicable EXECUTIVE SUMMARY: Agency staff requests the Board of Directors (“Board”) consideration of a resolution that would repeal and replace the Housing Allocation Funds policy, which establishes the guidelines for allocating and directing resources for the development and preservation of housing. Staff presented the revised policy to the Board in January 2022 which incorporated the priorities for the proposed Westside Community Initiative (“WCI”) into the Housing Allocation Funds policy along with other amendments that address broader housing goals and activities. REDEVELOPMENT ADVISORY COMMITTEE RECOMMENDATION: Staff presented the proposed revisions to the Housing Allocation Funds policy to the Redevelopment Advisory Committee (RAC) on January 5, 2022. RAC forwarded a positive recommendation to approve the policy with no revisions. ANALYSIS & ISSUES: On February 9, 2021, the Board of Directors adopted the RDA Housing Allocation Funds policy. The policy provides for the establishment of four housing funds based on the fund source and allows for the prioritization of a specific purpose, need or policy objective within each fund. The revenues, expenditures, interest, payments and repayments for each fund are accounted for separately in order to provide oversight to comply with the various statutory requirements. The policy also provides that on an annual basis, the RDA shall present a Housing Development Funding Strategy for the Board’s consideration that projects revenues for the upcoming fiscal year and proposes funding priorities and allocations. This annual report is also 2 intended to include a summary on housing expenditures, projects, and outcomes. The current policy is included as Attachment A of the proposed resolution. In September, 2021, staff briefed the Board on the proposed framework for the WCI. This initial briefing was in response to the Board’s direction to develop a community land trust type program for the utilization of funds received by the RDA from the Inland Port Authority. To implement the WCI, it was intended that a separate policy would be created to establish the specific purpose, goals, activities and reporting requirements for the initiative. It was also anticipated that the RDA Housing Allocation Funds Policy would be updated to specifically earmark the Inland Port Housing Funds for the WCI, along with allocations from other revenue sources. Instead, staff is proposing an amended Housing Allocation Funds Policy that incorporates the specific priorities for the initiative while integrating it into the overall funding strategy and reporting structure provided for in policy. Incorporating the WCI into Housing Allocation Funds Policy allows for some of the broader housing goals and activities, such as the reporting requirements and the forthcoming Shared Equity Housing Program, to apply to the other existing housing funds. Following is a summary of the revisions included in the updated Housing Allocation Funds Policy along with a description of the specific priorities for the WCI. The redlined changes to the 2021 policy are included as Attachment B of the proposed resolution. Proposed revisions to the policy Scope (Section 1): The Scope section has been renamed to “Purpose” to expand its impact. The description now contains an additional statement on leveraging resources to incorporate a high level of public benefits to further align with the Agency’s Guiding Framework and Mission. Proposed revisions to the housing funds descriptions (Section 2): The descriptions for the three housing funds, excluding the WCI, now include definitions and references to State statute, the City’s Housing Plan and the RDA Project Area Plans that were previously in the recitals. Proposed revisions to housing activities (Sections 2.d.ii & 3.a.ii): Within the housing funds description as well as the Funding Strategy section, the referenced housing activities have been revised to provide general examples rather than a detailed list of eligible activities. The reasoning is that Agency housing activities are already authorized and defined within State statute. Proposed revisions to reporting requirements (Section 4): The written briefing and associated information have been incorporated within the annual Funding Strategy rather than a separate report. This allows the previous year’s funding, activities and metrics to be included along with the priorities and overall strategy for the proposed budget. Proposed revisions to Northwest Quadrant Housing Fund (Section 2.c): The fund has been renamed the Westside Community Initiative Fund. It earmarks the Inland Port Housing funds, along with any revenue from projects, to the City’s westside. The specific policy priorities for the WCI are as follows: 3 • Address the potential impacts from Inland Port development activities and improve opportunity indicators within the westside It is the intent to utilize the Inland Port Housing Funds to build community wealth, promote affordable homeownership, and expand opportunity throughout the City’s westside. The RDA will carry out efforts with a collective impact approach and measurable results. • Develop and allow for the RDA to maintain ownership of land to ensure long-term, community serving uses The WCI will take a long-term approach to land development and community building by retaining the fee ownership to land and providing opportunities to receive revenue generation to serve other public benefits. • Create opportunities for revenue generation that can be reinvested back into the community while balancing the incorporation of public benefits and other neighborhood development purposes The WCI will strive to balance the development of property with the incorporation of public benefits. Benefits such as affordable housing and below- market commercial space which generate limited, or no cash flow would potentially be subsidized with land uses that generate positive cash flow. Revenue generated by projects will then be reinvested back into the WCI with the goal of furthering shared prosperity. • Mitigate gentrification and displacement on the westside WCI will acquire land with the goal of holding it for the community, thereby removing land from the speculative market so that it serves low and moderate- income residents in perpetuity. Housing will remain affordable even as neighborhood change occurs and gentrification pressures mount, which may protect families from displacement. • Give lower income households the opportunity to build wealth through homeownership and shared equity models of development WCI will create opportunities for families to buy homes at affordable prices by focusing on a shared-equity model. A shared-equity model offers an alternative form of ownership that provides benefits traditional markets cannot, such as long- term housing affordability and the ability for low and moderate-income families to go from renting to building wealth. • Facilitate the implementation of transformative housing and mixed-use rental housing development projects Under the statute, funds can be utilized to implement mixed-income projects, mixed-use projects and related improvements. As such, the WCI will leverage funds as part of housing projects for a broader array of other public benefits, including infrastructure improvements, economic opportunity, sustainable building practices and the redevelopment of undesirable land uses. 4 Staff presented the revised policy to the Board in January 2022 for consideration and discussion. Board members expressed interest in determining to what extent the availability of future affordable units could be prioritized to residents of the west side as well as City first responders. The Board also discussed the availability and collection of data on the existing housing stock and utilizing the information to help inform future decisions. As future annual strategies are presented, staff will endeavor to incorporate these priorities into the proposed funding allocations. PREVIOUS BOARD ACTION: • The Board adopted Resolution No. R-04-2021, RDA Housing Allocation Funds Policy, February 9, 2021. • May 2021 – The Board directed RDA staff to develop a proposed program for a community land trust type program for the City’s westside that utilizes Inland Port Housing Funds. • September 2021 – RDA Staff briefed the Board on the proposed framework for the Westside Community Initiative. • January 2022 – RDA staff presented a revised RDA Housing Allocation Funds Policy incorporating priorities for the proposed Westside Community Initiative along with other amendments that address broader housing goals and activities. ATTACHMENTS: A. Resolution REDEVELOPMENT AGENCY OF SALT LAKE CITY RESOLUTION NO. _______________ Repealing and Replacing the Housing Allocation Funds Policy RESOLUTION OF THE BOARD OF DIRECTORS OF THE REDEVELOPMENT AGENCY OF SALT LAKE CITY REPEALING AND REPLACING THE RDA HOUSING FUNDS POLICY WHEREAS, on February 9, 2021, pursuant to Resolution No. R-04-2021, the Board of Directors of the Redevelopment Agency of Salt Lake City (“Board”) passed the Housing Allocation Funds Policy (“2021 Policy”, attached to this resolution as Attachment A for reference), which established a policy dedicating and directing resources for the development and preservation of housing. WHEREAS, the 2021 Policy established four different housing funds, including the Northwest Quadrant Housing Fund, which dedicated housing funds received pursuant to Section 11- 58-601(6)(b) of the Utah Inland Port Authority Act (“Inland Port Housing Funds”) to neighborhoods adjacent to the proposed location of the Inland Port. WHEREAS, the Board now desires to repeal and replace the 2021 Policy in order to clarify the terms of the policy and replace the Northwest Quadrant Housing Fund with a new housing fund entitled the Westside Community Initiative Fund in order to better direct housing funds to the City’s westside (the redline version of the 2021 Policy is attached to this resolution as Attachment B for reference). NOW THEREFORE, BE IT RESOLVED BY THE BOARD OF DIRECTORS OF THE REDEVELOPMENT AGENCY OF SALT LAKE CITY, the Housing Allocation Funds Policy adopted pursuant to Resolution No. R-4-2021 is repealed in its entirety and replaced with the f ollowing: 1. Purpose. The purpose of the RDA Housing Allocation Funds Policy (“Policy”) is to establish the processes and guidelines for coordinating and allocating tax increment, tax differential, sales tax, and other revenues for the development and preservation of housing. The RDA will leverage resources and collaborate with public and private partners to incorporate a high level of public benefits within housing developments and broaden the pool of available housing funds and expertise. 2. RDA Housing Funds. The RDA shall establish and maintain multiple housing funds based on the fund source and separately account for the revenues, expenditures, interest, payments and repayments for each fund source (collectively the “Housing Funds”). Maintaining separate Housing Funds will allow the RDA to provide control and oversight to comply with the various statutory requirements for each funding source and to allow for the prioritization within each funding source for a specific purpose, need, or policy objective. The Housing Funds include: a. Primary Housing Fund i. Source of Funds: Tax increment required to be allocated for housing pursuant to the Utah Code Title 17C Community Reinvestment Agency Act (the “CRA Act”). ii. Eligible Uses of Funds: Funds shall be utilized for the purposes described in Section 17C-1-412 of the CRA Act. iii. Policy Priorities: Funds shall be prioritized to address citywide housing goals and objectives as identified in the City’s housing plan identifying needs, priorities and goals on a citywide basis (“Housing Plan”) and the adopted project area plans identifying housing needs, priorities, and goals on a project area basis (“Project Area Plans”). b. Secondary Housing Fund i. Source of Funds: Additional tax increment that may be allocated on a discretionary basis for housing pursuant to the CRA Act. ii. Eligible Uses of Funds: Funds shall be utilized for the purposes described in Section 17C-1-411 of the CRA Act. iii. Policy Priorities: Funds shall be prioritized to address the housing goals and needs identified in Project Area Plans. c. Westside Community Initiative Fund ("WCI") i. Source of Funds: Inland Port Housing Funds and additional funds including revenue generated by projects. ii. Eligible Uses of Funds: Funds shall be utilized for the purposes described in Section 11-58-601(6)(b) of the Inland Port Act and allocated for projects on the City’s westside defined as municipal boundaries west of I-15. iii. Policy Priorities: Funds shall be prioritized to: 1. Address the potential impacts from Inland Port development activities and improve opportunity indicators within the westside. 2. Develop and allow for the RDA to maintain ownership of land to ensure long-term, community serving uses. 3. Create opportunities for revenue generation that can be reinvested back into the community while balancing the incorporation of public benefits and other neighborhood development purposes. 4. Mitigate gentrification and displacement on the westside. 5. Give lower income households the opportunity to build wealth through homeownership and shared equity models of development. 6. Facilitate the implementation of transformative housing and mixed- use rental housing development projects. d. Housing Development Fund i. Source of Funds: Additional funds, including but not limited to sales tax revenues, that may be allocated to or obtained by the RDA for the development and preservation of housing. ii. Eligible Uses of Funds: Funds shall be utilized to promote the development and preservation of affordable and mixed-income housing. iii. Policy Priorities: Funds shall be prioritized to address the housing goals and needs of identified in the Housing Plan and Project Area Plans. 3. Annual Budgeting Process. The following steps shall be utilized to budget Housing Funds on an annual basis: a. Funding Strategy: Prior to the annual budget process, the RDA shall annually present to the Board a Housing Development Funding Strategy (“Funding Strategy”) that includes: i. A projected amount of revenue to be allocated to the Housing Funds for the upcoming fiscal year. ii. Proposed funding allocations for housing activities (i.e. gap financing loans, property acquisition, shared equity financing, development or site costs, etc.) and funding priorities for the upcoming fiscal year. Proposed funding allocations shall be targeted to address current needs, leverage available opportunities, be coordinated with other City resources, and align with the standards and priorities for the Housing Funds as established in Section 2 herein. b. Annual Budget Allocations: The Board shall consider the Funding Strategy as part of the annual budget adoption process. c. Implementation: Once budget allocations are finalized, the RDA will implement projects and programs according to applicable RDA policies and procedures. 4. Reporting Requirements. The RDA intends to carry out these housing efforts with a collective impact that produces measurable results. As part of the Funding Strategy, the RDA shall provide a written briefing to the Board which contains the following information: a. The year-end balance of the Housing Funds. b. An accounting of programs and projects funded from the Housing Funds over the last fiscal year, including the following information itemized by project: i. Project address ii. Development partner iii. Amount of Housing Funds committed iv. Total project cost v. The scope and status of improvements vi. The total number of residential units with a corresponding accounting of affordability levels by area median income (AMI). Passed by the Board of Directors of the Redevelopment Agency of Salt Lake City, this _______ day of , 2022. ________________________________ Chair Approved as to form: _ _________________________________ Salt Lake City Attorney’s Office Allison Parks Date:____________________________ The Executive Director: ____ does not request reconsideration ____ requests reconsideration at the next regular Agency meeting. Erin Mendenhall, Executive Director Attest: ________________________ City Recorder January 3, 2022 December 20, 2020 Attachment B Redline Changes to the 2021 Policy 1. ScopePurpose. The purpose of the RDA Housing Allocation Funds Policy (“Policy”) containsis to establish the processes and guidelines for coordinating and allocating tax increment, tax differential, sales tax, and other revenues for the development and preservation of housing. The RDA will leverage resources and collaborate with public and private partners to incorporate a high level of public benefits within housing developments and broaden the pool of available housing funds and expertise. 2. RDA Housing Funds. The RDA shall establish and maintain multiple housing funds based on the fund source and separately account for the revenues, expenditures, interest, payments and repayments for each fund source (collectively the “Housing Funds”). Maintaining separate Housing Funds will allow the RDA to provide control and oversight to comply with the various statutory requirements for each funding source and to allow for the prioritization within each funding source for a specific purpose, need, or policy objective. The Housing Funds include: a. Primary Housing Fund i. Source of Funds: Tax increment required to be allocated for housing pursuant to the CRA Act. Utah Code Title 17C Community Reinvestment Agency Act (the “CRA Act”). ii. Eligible Uses of Funds: Funds shall be utilized for the purposes described in Section 17C-1-412 of the CRA Act. iii. Policy Priorities: Funds shall be prioritized to address citywide housing goals and objectives as identified in the Housing Plan.City’s housing plan identifying needs, priorities and goals on a citywide basis (“Housing Plan”) and the adopted project area plans identifying housing needs, priorities, and goals on a project area basis (“Project Area Plans”). b. Secondary Housing Fund i. Source of Funds: Additional tax increment that may be allocated on a discretionary basis for housing pursuant to the CRA Act. ii. Eligible Uses of Funds: Funds shall be utilized for the purposes described in Section 17C-1-411 of the CRA Act. iii. Policy Priorities: Funds shall be prioritized to address the housing goals and needs identified in Project Area Plans. c. Northwest Quadrant Housing Fund c. Westside Community Initiative Fund ("WCI") i. Source of Funds: A portion of the property tax differential collected by the Inland Port Authority to be allocated to the RDA for affordable housing.Housing Funds and additional funds including revenue generated by projects. ii. Eligible Uses of Funds: Funds shall be utilized for the purposes described in Section 11-58-601(6)(b) of the Inland Port Act. and allocated for projects on the City’s westside defined as municipal boundaries west of I-15. iii. Policy Priorities: Funds shall be prioritized for the neighborhoods adjacent to the Inland Port Jurisdictional Land (generally defined as neighborhoods west of I-15) to 1) address and mitigateto: 1. Address the potential impacts from Inland Port development activities and 2) improve opportunity indicators within these neighborhoods. the westside. 2. Develop and allow for the RDA to maintain ownership of land to ensure long-term, community serving uses. 3. Create opportunities for revenue generation that can be reinvested back into the community while balancing the incorporation of public benefits and other neighborhood development purposes. 4. Mitigate gentrification and displacement on the westside. 5. Give lower income households the opportunity to build wealth through homeownership and shared equity models of development. 6. Facilitate the implementation of transformative housing and mixed- use rental housing development projects. d. Housing Development Fund i. Source of Funds: Additional funds, including but not limited to sales tax revenues, that may be allocated to or obtained by the RDA for the development and preservation of housing. ii. Eligible Uses of Funds: ActivitiesFunds shall be utilized to promote the development and preservation of affordable and mixed-income housing, including costs associated with site acquisition, site remediation, ca pital improvements, new construction, and rehabilitation. iii. Policy Priorities: Funds shall be prioritized to address the housing goals and needs of identified in the Housing Plan and Project Area Plans. 3. Annual Budgeting Process. The following steps shall be utilized to budget Housing Funds on an annual basis: a. Funding Strategy: Prior to the annual budget process, the RDA shall annually present to the Board a Housing Development Funding Strategy (“Funding Strategy”) that includes: i. A projected amount of revenue to be allocated to the Housing Funds for the upcoming fiscal year. ii. Proposed funding allocations for housing activities (i.e. gap financing loans, property acquisition, etc.)shared equity financing, development or site costs, etc.) and funding priorities for the upcoming fiscal year. Proposed funding allocations shall be targeted to address current needs, leverage available opportunities, be coordinated with other City resources, and align with the standards and priorities for the Housing Funds as established in Section 2 herein. b. Annual Budget Allocations: The Board shall consider the Funding Strategy as part of the annual budget adoption process. c. Implementation: Once budget allocations are finalized, the RDA will implement projects and programs according to applicable RDA policies and procedures. 4. Reporting Requirements. The RDA intends to carry out these housing efforts with a collective impact that produces measurable results. As part of the Funding Strategy, the RDA shall provide a written briefing to the Board, within 60 days of the end of each fiscal year, which contains the following information: a. The year-end balance of the Housing Funds. b. An accounting of programs and projects funded from the Housing Funds over the last fiscal year, including the following information itemized by project: i. Project address ii. Development partner iii. Amount of Housing Funds committed iv. Total project cost v. The scope and status of improvements vi. The total number of residential units with a corresponding accounting of affordability levels by area median income (AMI).