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BACKGROUND The State of California, Department of Housing and Community Development (HCD) issued a Notice of Funding Availability in November 2016 (NOFA), under its Housing- Related Parks (HRP) Program. The HRP Program provides grant funds to cities and counties for documented housing starts of newly constructed, substantially rehabilitated, converted or preserved rental and ownership housing units with affordability restrictions for low and very low Income households. Funds awarded may be used for park and recreation facility improvements within the applicant's jurisdiction. The HRP Program was funded through the State Proposition 1C (Housing and Emergency Shelter Trust Fund Act of 2006) and will provide a total of $35 million during the current Designated Program Year 2016 in financial incentives to communities as a means of rewarding jurisdictions that create new affordable housing opportunities. Funds are awarded on a non-competitive basis to jurisdictions based on the number of housing starts (building permit issuances) during the period of January 1, 2010 through December 31, 2016 and the ability of the jurisdiction to meet the minimum threshold requirement for funding of $75,000. The City received an HRP grant of$330,900 in June 2016 for building permit issuances through Calendar Year 2015; thus, this year's application may only cover housing starts during the January 1 through December 31, 2016 period. DISCUSSION HRP grant funds are awarded per bedroom for all affordable units permitted during the project period. The funding award amount is based on levels of affordability restriction (households earning less than 30%, 50% or 80% of t h e Area Median Income (AMI) for Alameda County) and other bonus criteria such as infill project status and location within a lower income census tract and/or park-deficient neighborhood. During Calendar Year 2016, the City entered into an Affordable Housing Loan Agreement with Kottinger Gardens Phase 1 Associates (MidPen Housing) to effectuate the development of the 131-unit affordable senior rental development as part of the Kottinger Gardens redevelopment project. Through the City's Regulatory Agreement and Declaration of Restrictive Covenants, as well as a preliminary reservation of 9% Low Income Housing Tax Credits that the developer has obtained, the project will ultimately provide 130 units of affordable housing for seniors (1 unit is a resident manager's unit) reserved at the 30%, 40%, 50%, and 60% of AMI levels. Projects must document an affordability restriction in place for a minimum of 55 years for rental and 20 years for ownership housing. Pursuant to the City's Regulatory Agreement, the term of the agreement is the later of 55 years from occupancy or the expiration of the term of the City's ground lease, which is 75 years. Page 2 of 3