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ATTACHMENT 2.A. COUNCIL AGENDA: 04/27/21 FILE: 21-885 el)14 ITEM: 3.7 CITY OF SANJOSE Memorandum CAPITAL OF SILICON VALLEY TO: HONORABLE MAYOR AND FROM: Jacky Morales-Ferrand CITY COUNCIL Julia H. Cooper Nanci Klein SUBJECT: SEE BELOW DATE: April 16, 2021 Approved Date 4/16/2021 SUBJECT: PUBLIC PURPOSE BONDS ISSUED BY A JOINT POWERS AUTHORITY FOR MODERATE-INCOME RENTAL HOUSING RECOMMENDATION Accept the staff report on public purpose bonds issued by a joint powers authority(JPA) for moderate-income housing, and direct the Administration not to move forward with releasing a term sheet in order to pursue membership in one or more JPAs for moderate-income housing at this time. OUTCOME With the approval of the staff recommendation,the City would not issue a Request for Proposals and would not join any JPAs that use the new financing model for moderate-income housing. However, Housing Department staff would continue to pursue other opportunities and strategies for both affordable and moderate-income housing that make more efficient use of City funds and resources. EXECUTIVE SUMMARY Staff has conducted additional analysis of this new financing strategy for moderate-income housing. Larger cities in California, such as Oakland and San Francisco, have chosen not to join any of the JPAs. Further analysis by staff raised significant concerns, and while staff is eager to advance housing affordability, staff believes that the risks and costs of joining such JPAs outweigh the potential benefits. Especially given the low likelihood of success in having JPAs agree to all of the City's terms, the City Council's recent de-prioritization of the Moderate-Income Housing Strategy,the considerable staff time involved, and most importantly, the use of public subsidy and debt to produce little improvement in affordability but large fees, the Administration recommends against issuing an RFP and proceeding with this work. Staff has provided two alternatives. One