Item 09 - First Amendment to Emergency Rental Assistance Program Spending Plan

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Emergency Rental Assistance Program Spending Plan & Appropriation Adjustment February 16, 2021 Page 6 4 1 9 The program also allows for prospective payments of 25% of monthly rent for the months of April, May, and June. Establishes a requirement for funds to be administered in at least three rounds, prioritizing: (1) Below 50% AMI or unemployed for 90 days; (2) Below 80% AMI and in a community disproportionately impacted by Covid-19; (3) Below 80% AMI and not addressed by rounds 1 and 2. Staff has reviewed the three options and recommends Option # 3: Self-Administer and State Administer for three reasons. First, the City currently has 1,100 applicants waiting for assistance through our CARES for Tenants Program. If we were to allocate our funding back to the State (Option # 1), we would need to notify all of these families that they will need to reapply to the State for assistance, sending them through a new application process with LISC. Second, the State’s Rental Assistance Program essentially replicates our CARES for Landlords Program which was not as effective as our CARES for Tenants Program to allocate our funds. Specifically, we allocated $2.7 million of our State CARES Act funds to our CARES for Landlords Program in August 2020. By November 2020, we needed to reallocate $1.6 million of this funding back to our CARES for Tenants Program because landlords were not participating in the program as much as expected, even after staff exhausted outreach efforts with three mass mailings to every multi-family property owner in Santa Ana and two workshops to the Apartment Association of Orange County and California Apartment Association. If staff were to request the State’s funding be allocated to the City via Option # 2, staff would have to conform the City’s local program to the State program requirements and the City would have substantial difficulty in administering the assistance for landlords directly. Finally, the State’s Rental Assistance Program does not provide enough assistance per household. Specifically, the State’s Program will only pay 25 percent of a tenant’s rental arrears. To reach the City’s payment of $5,500 per household, the family would have to owe a total of $22,000 in rental arrears (25% of $22,000 equals $5,500). The City’s one- time assistance per family will go further to assist Santa Ana residents. Therefore, staff recommends Option # 3 because: 1) staff has 1,100 applicants already waiting for assistance through the City’s program; 2) not as many landlords will apply for the State’s program based on the City’s experience with the CARES for Landlords Program; and 3) the one-time assistance payments of $5,500 per household will go further to assist our residents than the 25 percent payment that the State will be able to provide to each household. ENVIRONMENTAL IMPACT There is no environmental impact associated with this action. FISCAL IMPACT Approval of the appropriation adjustment will recognize $9,880,391.30 in the Emergency Rental Assistance Program grant revenue account (No. 17718002-52008) for expenditure as follows: EXHIBIT 1