Received R Ad and Considered Sep I r 2!z

Monitoring of compliance with Affordable Housing regulations has been inconsistent and often inadequate. Cotati Response: Partially disagree. As the smallest City in Sonoma County, the City historically contracted with the Sonoma County Community Development Commission (CDC) to play the role of Housing Author:ty and Housing Administrator for the City. This agreement was formalized through a Joint-Powers Agreement. Unfortunately, this agreement was allowed to expire and efforts to re-instate it were not successful due to management and staffing changes affecting the CDC since approximately 2019. While re-instating this agreement is a top priority for City staff, the Cotati City Council allocated additional funding within the Community Development Department to create an affordable housing monitoring and compliance program, absent adequate support from the CDC. Further, State dissolution of redevelopment agencies in 2011 further reduced the City of Cotati capacity to incentivize the development of deed-restricted affordable housing and conduct robust monitoring. The combination of these two factors resulted in recent City-led monitoring efforts that were often inconsistent. However, no evidence has been found that monitoring has been inadequate. At the time ofthis response, there are 19 projects in Cotati with deed-restricted affordable units, consisting of a total of 326 affordable units. Of these, six projects (consisting of 177 rental units) also have regulatory agreements with at least one other State or Federal housing agency who conduct robust monitoring, including regular on- site inspections. (These State and Federal housing agencies and/or programs include the California Housing Finance Agency or "CHFA", Community Development Block Grant (CDBG), Low-lncome Housing Tax Credit (LIHTC) and Housing and Urban Development or "HUD.") This leaves 13 projects (consisting of 149 units) for which Cotati is the primary housing body responsible for compliance monitoring. However, a majority of these are ownership units (119), with affordable housing deed restrictions being recorded against their property titles. Further, the most recently approved 13 ofthese owned homes are under Housing Land Trust of Sonoma County (HLT) management, and the HLT is involved in the ownership structure ofthese units, ensuring they remain affordable and owners qualify for the affordability restrictions. While city-led monitoring of these projects has been inconsistent since the CDC JPA agreement was allowed to lapse, the combination of State, Federal, and non-profit agencies responsible for monitoring 58% ofthe affordable units in Cotati and another 33% ofthese units including deed restrictions reviewed by title officers during any proposed transaction, allow a significant majority of our affordable housing stock (91%) to continue to receive robust monitoring, per their regulations. The Grand Jury Report does not reference or acknowledge the compliance monitoring that these agencies and restrictions ensure. Table 3 of the Grand Jury report indicates that Cotati has no dedicated monitoring personnel, which as of August 22, 2022, is incorrect. Even prior to adopting the FY 2022123 budget, the City Council authorized the creation of a Planning Technician position in the Community Development Department to add staff capacity that will support the City's Housing Administration efforts. The CD department was able to successfullyfill this position with the newTechnician starting on August 22,2022. Like most small cities, Cotati does not have the volume oftransactions northe budget to support a full-time individual for Housing Administration. For smaller cities, this function is best performed regionally or in a collective effort, which was previously performed by the CDC. Currently, the Community Development Department (supplemented by consultant/non-profit resources and/or CDC staff), is responsible for ensuring adequate monitoring of the City's Affordable Housing stock take place.

The use of self-reported data in monitoring is the accepted norm. Cotati Res po n se: Disagree, in part. While this may have been true forthe properties with limited numbers of inclusionary units where the affordability covenants rest with the City and no other agencies are involved in monitoring (30 units total or approximately 9%), this is not true of owned units with deed restrictions or units with required monitoring performed by CHFA, CDBG, LIHTC and HUD, all of which conduct regular on-site monitoring in addition to desktop monitoring. fu noted in response to Finding 1above,91% ofthe deed-restricted affordable units in Cotati are also monitored by a State or Federal agency which conducts onsite monitoring, a not-for-profit housing organization and/or title officers reviewing any sale transactions. As noted in the response to Finding 1, Cotati's recent staff increases and on-going conversations with the County CDC and consultant/non-profit resources will ensure robust and local compliance monitoring of projects within the City resume in Fiscal Year 202212023.

On-site (in-person) monitoring beyond that required by law is rare due to insufficient personnel, budgetary limitations, and relatively low incentives. Cotati Response: Disagree, in part. Please see responses to Findings F1 and F2.

COVID-19 further reduced in-person on-site monitoring due to public health restrictions Cotati Response: Agree.

Surprise or unscheduled monitoring of individual units is not done, for reasons of privacy, availability, efficiency, and practicality. Cotati Response: Agree.

Unscheduled monitoring of properties and management, in order to review tenant files, grounds, and the amenities is not done. Cotati Response: Partially Disagree. Cotati City staff do regularly monitor the grounds and amenities of the larger affordable housing unit developments through unscheduled visits to these sites.

There is limited or no standardized training in Affordable Housing compliance regulations for developers and managers of inclusionary housing within the nine Cities. Cotati Response: Disagree, in part. Most jurisdictions, Cotati included, have detailed affordability covenants with developers and/or managers of inclusionary housing which specify the requirements and compliance expectations of projects with affordable housing units. Cotati Community Development Department staff and contract consultants/non- profits to provide substantial technical assistance to developers and managers of inclusionary housing projects during the development review process and throughout the initial marketing of newly constructed affordable housing units to ensure clear understanding of compliance parameters. However, it is correct that there is no on-going compliance training provided by City stafffor managers of affordable housing units after they are initially constructed and occupied. Typically, guidance is provided as needed after occupancy. Any on-going regular training, if needed, would best occur at a regional basis.

The cities of Petaluma and Rohnert Park use computerized compliance monitoring proBrams to facilitate and improve the quality of their work. Cotati Resoonse:

The property titles of Affordable single-family houses have not always been flagged as deed restricted. Cotati Response: Unknown. City staff work with developers of for-sale affordable housing units to ensure proper deed restrictions, legal sale limitations and other title documentation is properly recorded against the ownership deeds for all affordable ownership units within the City. Cotati Community Development Department and Administrative Services Department staff are regularly contacted by title companies asking for clarification and/or confirmation of title documentations affecting the affordability levels of units proposed for sale and/or purchase. All recent affordable ownership units in Cotati have been put under the administration and stewardship ofthe Housing Land Trust ofSonoma County (HLT), to further ensure that all units are flagged as deed restricted. Because HLT owns the land each home sits on, they are legally required to be involved in every sale/purchase transaction and are required to provide express permission for the sale, income levels ofthe buyers and the sales price ofthe home. This model was adopted by the City of Cotati to both ensure that units remain affordable and that this affordability continues in perpetuity. The City of Cotati is also expressly identified as the land ownership beneficiary in these recorded documents, should the HLT no longer be able to provide these services. Cotati staff have heard anecdotal stories of affordable housing units being "lost" due to unit owners and/or title officers not identifying or enforcing deed restrictions, however no specific addresses or properties have been identified. Staff is aware that any deed restricted units subject to foreclosure and sale by the bank would have had their deed restrictions removed as part of that process due to the subordination process of mortgage lending. Given the high number of homes foreclosed upon during the "Great Recession", there is a a possibility that some of the City's deed restricted units were "lost" this way; however again City staff is not able to confirm any specific deed restricted properties having been re-sold at market rates.

The majority ofthe housing representatives the Grand Jury interviewed felt that there is not enough staff within their departments to make anyone a full-time compliance monitor. Cotati Response: City of Cotati staff agree with Finding 11 with the following clarification. While Cotati staff agrees that there is insufficient staffing resources to make anyone a "full- time compliance monitor," a dedicated full time staff member is not necessary to provide robust monitoring and maintain a monitoring program for the City of Cotati. ln most small cities, there is insufficient volume of transactions nor the budget to support a full-time individual for Housing Administration. Strategic use of staff time, consultant/nonprofit resources and leveraging staff efforts by the CDC, CHFA, CDBG, LIHTC and HUD regarding monitoring and compliance work can ensure robust compliance monitoring and assistance without dedicating a single "full-time compliance monitor". Further, the Cotati City Council has prioritized providing staff to support this effort by creating a new Planning Technician in the Community Development Department. Response to ommendations