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HONORABLE MAYOR AND CITY COUNCIL April 16,2021 Subject:JPA-issued Bonds for Moderate-Income Housing Page 2 alternative is to create a Bay Area JPA in combination with our peer cities that can create a model that would address the concerns identified by our staff and our peer cities. The second alternative, not recommended by the Administration, is to release a Request for Proposals and include a term sheet as directed by the City Council in December 2020 before Councilmembers were made aware of all the information now available to staff.. BACKGROUND On June 25, 2019,the City Council received an update on the Housing Department's moderate- income housing strategies. Included in that memorandum and presentation was a brief description of a moderate-income housing program proposed by the California Community Housing Agency (Ca1CHA), a newly formed JPA established by Kings County in 2019. This information was also presented to the City Council's Committee on Community and Economic Development on May 20, 2019. In 2019, Housing Department staff led a team with the Department of Finance,the Office of Economic Development, and the City Attorney's Office that met several times with representatives of Catalyst Housing and the Ca1CHA team. The City team also consulted with its external advisor who did preliminary analysis on the CaLCHA product. By November 2019, staff had identified structural questions and concerns that would require significant additional effort to resolve, and in early 2020 was beginning to work through selected issues to possibly bring the product to the City Council for further direction. However,the onset of the COVID pandemic and key Housing Department staff turnover redirected the focus of Housing's Policy and Production Teams that prioritized other time-sensitive work items. On October 28, 2020, Councilmembers Khamis and Diep authored a memo to the Rules and Open Government Committee (Rules Committee)recommending the City join Ca1CHA. At that Rules Committee meeting, staff provided feedback that the requested actions would require additional staff time from within the Housing Department and other departments, including Finance and Office of Economic Development, and would need to be prioritized through the next Council Priority Setting Session. However, following further discussion, staff committed to providing an update at the Rules Committee meeting on December 2, 2020, with the help of staff from the Office of Economic Development. In late August and early November 2020, staff met with representatives from the California Statewide Communities Development Authority(CSCDA)to learn more about their newly formed affiliate JPA and its program for moderate-income housing structured similar to Ca1CHA that uses a JPA to issue tax-exempt bonds to purchase and provide moderate-income housing. On December 2, 2020,the Rules Committee received a report' that summarized staff analysis and work to date on the two unsolicited proposals for the City to join a JPA to provide moderate- income housing. Staff suggested that rather than sole sourcing this tax-subsidized program to one https://sanjose.legistar.com/View.ashx?M=F&ID=8954795&GUID=DBE8A2A7-3985-4E78-BEF2-9BEBA5E2D800