SHS funds can be used to support a range of project-based PSH program models, and DHS is interested in working with potential partners to explore flexible and innovative strategies to achieve the county’s PSH unit goals. DHS will work collaboratively with each housing owner to develop a customized mix of funding and supports that are tailored to fit each project to ensure long-term stability and success for buildings, units and tenants. Projects with a commitment to create at least 10 PSH units will be eligible to select from a menu of SHS-funded resources that includes:
Project-based Regional Long-term Rent Assistance (RLRA): Contracts are available for SHS-funded project-based rent assistance that will buy down rents up to 80% AMI depending on the project. Rent assistance is designed to subsidize the gap between 28.5% of the tenant’s income and the unit’s regulated rent level to make units affordable for tenants with incomes between $0 and 30% AMI. Reimbursement at more than 80% AMI rents may be available for projects that meet specific criteria. Initial contract terms are up to 15 years with the potential for extension if resources are available. (RLRA is designed to make units affordable to tenants with incomes below 30% AMI, not to subsidize other project costs; see the “building operations” and “development financing” sections below for resources that can be used to subsidize operating costs.)
Housing retention case management: SHS resources are available to provide case management services for each PSH unit to support housing stabilization, lease compliance, and connections with wraparound services. Case management services will be matched to PSH units through designated DHS contracts with service providers that qualified to contract with DHS through the April/May 2021 RFPQ. DHS will fund ongoing services, at a level commensurate with each household’s specific needs, for up to 10 years with the potential for renewal if resources are available. Qualified housing owners that prefer to provide services in-house can receive funding through a designated services contract with DHS.
Resident services: Projects with at least 30% of units set aside for PSH (and a minimum of 10 PSH units) are eligible for funding to support the resident services needs of the building where the PSH units are located. Resident services are provided on site and include services such as new resident orientation, conflict mediation, information and referral, connections to community resources, community building activities, and other programming tailored to the building’s population. Funding is available for up to 10 years with the potential for renewal if resources are available. The maximum eligible budget is $1,200 per unit per year (based on the total number of units in the building), with the expectation that a portion of that amount will be covered through the building’s financing. Proposed budgets will be analyzed for cost efficiency and effective leveraging of non-SHS resources.
Building operations: Funding is available to cover costs of building operations that are specific to buildings with PSH residents. Examples of eligible costs include 24-hour front desk, hiring security or maintenance staff with specialized training, housekeeping support to assist tenants with lease compliance, and enhanced property management. Projects with at least 30% of units set aside for PSH (and a minimum of 10 PSH units) are eligible to apply for funding to cover specific building operation costs for up to 10 years with the potential for renewal if resources are available. Proposals will be reviewed on a project-by-project basis, with funding prioritized for projects where the budget is cost effective and well aligned with the building’s size and resident composition.
Development financing: SHS funding is available to support financing of new or rehabbed
projects that would create a significant number of new project-based PSH units. Development financing is available in the form of (a) gap financing for operating subsidies or (b) rent assistance contingency funding intended to support investor confidence by covering costs for rent assistance beyond the SHS sunset date of December 2030 if SHS is not renewed. Rent assistance contingency funding must be set aside and used for that purpose only.
Technical assistance: For housing owners without extensive PSH experience, funding is available for training, technical assistance and capacity building to support planning and development of a well-designed and implemented PSH program. One-time TA grants of up to $25,000 are available per project.
In addition to these funding options, all projects with SHS-funded project-based PSH units will have access to a risk mitigation fund that will cover (a) costs related to physical damage to units or common areas beyond normal wear and tear that exceeds the security deposit, (b) legal costs related to serious violations of the lease or state law, and (c) uncollected rent, up to certain limits. Projects will also receive ongoing support from a designated DHS contract manager.