City reviews permanent housing funds application

City, county could mirror programs

The Bishop City Council at its meeting Monday passed a resolution regarding the city’s application for state housing funds and how the city would use those funds in partnership with Inyo County.

City Associate Planner Elaine Kabala said the council in October discussed the state’s permanent local housing allocation.

The state dollars are specifically aimed at giving cities and counties the ability to implement certain programs to address housing shortages, which is a critical problem throughout California.

Kabala said city staff had proposed that it would be most efficient, given the relatively small amount of funding available to Bishop, about $362,000 for the first three years, to partner with Inyo County to develop parallel programs for seamless service to the community.

She said the county’s proposed program is in line with the city’s proposal as far as how to use the funds as well as policies that support each entity’s housing plans.

Kabala said the city’s proposal, after dedicating 5% of the funding for administrative costs, would split the available funding 50/50 with 50% of that funding available for low-interest loans for housing unit rehabilitation for single family, multiple families, multiple multifamily and mobile home housing units. The other half of the funding would be set aside for low-interest loans for auxiliary dwelling unit construction. Auxiliary dwelling units, or ADUS, are smaller, independent residential dwelling units located on the same lot as a standalone single-family home.

The proposal and process

Kabala said this proposal addresses some of the concerns city council members have had about who would be eligible for

the funding while also meeting the requirements under the state’s Housing and Community Development guidelines.

Kabala said the program would incentivize the owners of those auxiliary dwelling units to make them available to residents that meet certain income thresholds.

She said, as an example, if the auxiliary dwelling unit was rented to someone earning less than 60% of the area median income, the owner who developed the ADU would be eligible for 20% loan forgiveness.

Kabala said a loan maximum amount of $60,000 has been floated but it won’t be locked into the application with the state and that figure can be finalized as the city and county develop program guidelines.

Kabala said city staff also included in the policy that the ADUs would be available for no less than 30 days so that ADU development would not be available for any type of short-term rentals.

She said the city will have the opportunity to finalize the guidelines in partnership with Inyo County for implementation if the state’s Housing and Community Development finds that the city’s application is consistent with its goals and policies and approves it.

Once the policy is approved by Housing and Community Development and the city enters into an agreement with the state, Kabala said the state would provide the total allocation to be set aside in an account specific for program implementation. She said many times the state pays out funds on a reimbursement basis.

Council comments

Council member Stephen Muchovej said he thought it was good that the policy calls for an ADU to be rented for at least five years to a tenant with a below median income level to be available for the 20% loan forgiveness.

Muchovej said if the city’s policy could be expanded beyond the fiveyear threshold, even to in perpetuity, he would be in favor.

“I don’t think we need to limit it to five years,” he said.

Mayor Pro Tem Jim Ellis said the proposed program offers tangible benefits “put right into the hands of people who need it and are within our community who really could use the help so I love it.”

Council member Karen Kong said she was concerned that an owner of an ADU might not care about the 20% forgiveness caveat and just take advantage of the lowinterest low and rent to people who might not fall under the low-income bracket.

Kabal said city staff hasn’t set parameters on the loans as to whether the loans would be low interest or zero interest, though the current policy is written as a low-interest loan.

“And that interest would be put back into the (permanent local housing allocation) fund to continue this type of programming into the future,” Kabala said.

She said, from what she understands, the state gives an overall program approval but communities can take a more nuanced approach as far as implementation, which would include loan and rental terms.

Muchovej pointed out the loans would only be available to people who are making between 60% and 120% of the area median income and are typically not people who would qualify for a loan through other avenues.

Kabala said she has been talking with county staff and the two entities will be looking at an appropriate third-party to administer the program. Because it is state funding, the city and county would have to develop a request for proposals and release it for bids in a competitive process.