TO:
Honorable Mayor and Members of the City Council
THROUGH:
Talyn Mirzakhanian, City Manager
FROM:
Masa Alkire, AICP, Community Development Director
Adam Finestone, AICP, Planning Manager
Jaehee Yoon, AICP, Senior Planner
Justin Urbanski, Associate Planner
SUBJECT:Title
South Bay Cities Council of Governments (SBCCOG) Housing Trust Discussion (No Budget Impact) (Community Development Director Alkire).
(Estimated Time: 30 Min.)
DISCUSS AND PROVIDE DIRECTION
Body
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RECOMMENDATION:
Staff recommends that the City Council discuss and provide direction on the South Bay Cities Council of Governments (SBCCOG) request that the City of Manhattan Beach participate in the establishment of the proposed South Bay Regional Housing Trust (SBRHT).
FISCAL IMPLICATIONS:
There are no fiscal implications associated with opting out of the SBRHT. If the Council desires to join the SBRHT JPA, there may be annual fees required to cover administrative costs after the first year of operations. Membership costs will be determined by the SBRHT Board of Directors (comprised of elected officials from each participating city) in the future and not the SBCCOG. For the first year, start-up costs will be covered completely with funds that the SBCCOG has received. Given that membership costs have not been established, future fiscal implications associated with joining the SBRHT JPA, if any, are unknown at this time.
BACKGROUND:
SBCCOG is a JPA government agency comprised of 16 cities in the South Bay and the County of Los Angeles that share the goal of maximizing the quality of life and productivity by working collaboratively on various regional matters impacting our communities. As part of a Regional Early Action Planning 2.0 grant-funded program through the Southern California Association of Governments (SCAG), the SBCCOG has been working on creating a regional housing trust. If formed, the SBRHT would help fund the development and construction of affordable housing units in cities who are members of the trust, and only for development projects approved by the city in which they are proposed. Although the SBCCOG is leading the early feasibility work, the SBRHT would be a separate JPA with its own Board of Directors.
Over the past year, SBCCOG has been developing a comprehensive program for the SBRHT Board of Directors to consider adopting when formed in the future. The strategic plan and summary of the SBRHT JPA agreement was presented to the SBCCOG Board of Directors at its October 2025 meeting and to the South Bay City Managers group in November 2025. At its meeting on November 20, 2025, the SBCCOG Board of Directors voted to recommend that member agencies move forward with the formation of the SBRHT, which requires approval from four or more member cities. As of the writing of this report, the cities of El Segundo, Hawthorne, Inglewood, Lawndale, Rancho Palos Verdes, and Redondo Beach have joined. Therefore, formation of the SBRHT this Spring is certain.
DISCUSSION:
The SBCCOG will receive approximately $7.3 million annually in Measure A funding through the Los Angeles County Affordable Housing Solutions Agency’s (LACAHSA’s) Production, Preservation, and Ownership program (Attachment 1). In addition, LACAHSA also provides agency matching funds that may be available, which would increase that amount to approximately $14 million. As the SBCCOG explored how to maximize utilizing the funds, it became evident that establishing a SBRHT would provide more opportunities than the SBCCOG would have. Specifically, while the SBCCOG is limited in its use of those funds in the form of grants or rental/operating subsidies, the SBRHT would have lending authority and could also provide soft development loans, construction/pre-development loans, preservation/acquisition stakes, master leasing, and direct service/homebuyer assistance programs. Essentially, the SBRHT would be able to generate revenue through various activities and programs over time which can be reprogrammed to maximize the use of funds. For reference, the San Gabriel Valley’s regional housing trust has produced approximately 830 affordable housing units since its founding in February 2020 and is generating over $230,000 annually in interest and loan fee revenue. The attached SBCCOG PowerPoint presentation (Attachment 2) provides additional information about the SBRHT’s structure and goals.
Based on the draft Joint Powers Agreement (Attachment 3) for the SBRHT, the primary focus of the fund is to plan for and construct affordable housing through its flexible funding mechanisms, strategic guidance, and technical assistance. While the City of Manhattan Beach expects to see a significant number of affordable housing units constructed in the near future, all are part of density bonus projects proposed by private, for-profit developers, and not eligible for SBRHT funds. The City does not currently have or anticipate receiving applications for affordable housing projects that would qualify for the funds that the SBHRT would administer.
One function that the City has advocated to be included as part of the SBRHT’s responsibilities is affordable housing monitoring. Specifically, in meetings with SBCCOG staff, City staff recommended that funds be programmed on a subregional (COG) level to administer and monitor affordable housing units to ensure that such units produced as part of private development projects are occupied and maintained pursuant to State housing law. Based on staff’s research, a number of other cities, including some in the South Bay, also anticipate a significant number of affordable housing units in density bonus projects to come online in the next few years. Some of these cities expressed a similar need to that of Manhattan Beach for effective administration and monitoring of affordable housing units, especially those being developed as part of density bonus projects. Some of the key tasks to administer and monitor affordable housing units that could be shared through a joint effort may include, but are not limited to:
• Developing affordable housing program guidelines (e.g., eligibility, application process, selection criteria, roles and responsibilities of developer/property management/tenants)
• Administering affordable units to ensure that they are constructed, marketed, and leased/sold in a consistent and equitable manner
• Tenant selection and placement.
• Address on-going landlord-tenant concerns.
• Providing day-to-day program administration and monitoring for compliance, including annual reviews of tenant qualification and landlord compliance with affordable unit restrictions
• Facilitating outreach and marketing of affordable units
• Creating applicable forms, handouts, and an online portal for program administration
The current version of the draft JPA agreement does not include provisions for affordable housing monitoring. Based on discussions with SBCCOG staff, it may be possible to include such a program in the future, though that would need to be authorized by the JPA’s Board of Directors once formed. Additionally, it is unclear at this time whether such a program could be funded using the SBRHT’s identified funding sources, and additional research would need to be conducted to determine this ability. Administration and monitoring services for affordable housing units will be needed by the City in the next year and, as such, the City cannot wait to see if the new JPA’s Board of Directors opts to include and establish said services.
CONCLUSION:
Given that the SBRHT will be providing resources for the construction of subsidized affordable housing projects, the likelihood of the City receiving a portion of the funds is very low. As such, and unless the SBRHT commits to establishing an affordable housing administration and monitoring program, staff does not recommended joining the SBRHT at this time. Should such a program be incorporated into the SBRHT’s functions at a later date, the City could reconsider joining at that time.
POLICY ALTERNATIVES:
Staff has identified the following policy alternatives that the City Council may consider:
ALTERNATIVE 1:
Join the SBRHT JPA and advocate for an affordable housing administration and monitoring program through the City’s seat on the Board of Directors. This approach would provide a direct avenue through which the City could attempt to influence policy outcomes and priorities of the JPA with the hope that an affordable housing administration and monitoring and administration program could be incorporated at a future date.
ALTERNATIVE 2:
Suggest forming a separate, smaller JPA strictly for the purpose of administering and monitoring affordable housing units. This would require the participation and collaboration of other South Bay cities that are also actively seeking to prioritize affordable housing administration and monitoring services. As of the writing of this report, preliminary discussions are underway with Hermosa Beach and Rolling Hills Estates to make this a priority for the SBCCOG to consider. Note that this alternative could be authorized by the City Council regardless of the Council’s direction on joining the SBRHT JPA.
PUBLIC OUTREACH:
No public outreach was required for this agenda item.
ENVIRONMENTAL REVIEW:
The City has reviewed the proposed activity for compliance with the California Environmental Quality Act (CEQA) and has determined that it is not a “Project” under Section 15378 of the State CEQA Guidelines. Therefore, pursuant to Section 15060(c)(3), the activity is not subject to CEQA, and no further environmental review is required.
LEGAL REVIEW:
The City Attorney has reviewed this report and determined that no additional legal analysis is necessary.
ATTACHMENTS:
1. LACAHSA PowerPoint Presentation
2. SBCCOG PowerPoint Presentation
3. Joint Powers Agreement - SBRHT
4. PowerPoint Presentation