Good morning.

Welcome to the Alameda County Board of Supervisors Health Committee meeting for Monday, March the 9th, 2026.

May I have roll call, please?

Supervisor Miley, excused Supervisor Tim Present.

Supervisor Miley will be arriving at about 1015.

So we will take item number two, the tax the ball to properties program update first because the first item is an action item.

May I have a staff report, please.

Good morning.

Thank you for the opportunity to be here.

We're here to give an update on the tax defaulted properties program for Alameda County Housing and Community Development.

So the tax defaulted properties program is an investment of $3 million in Measure A1's innovation and opportunity fund to support the acquisition of tax defaulted properties for affordable housing development.

The idea is to create opportunities for smaller and emerging developers and the in the development of those properties and transform them into new affordable housing.

So the tax defaulted properties program leverages the chapter eight property sale program process that's administered by the treasure tax collector.

There are a lot of challenges with these particular properties.

They're typically small or regular parcels that require significant work to become development ready, and they're very difficult to finance due to the need for upfront acquisition and pre-development costs and the lag that it takes to process transactions through the chapter eight property sale process.

So the purpose of this program was to reduce those barriers and make these properties more attractive and more suitable for affordable housing development.

So of those 13 proposals, only one project met minimum requirements to move forward with the pre-development loan.

So that was a conditional award given to Kingdom Builders Christian Fellowship Ministries, working in partnership with the Community Housing Development Corporation.

And so in addition to that first property, there's an adjacent property, 7963 MacArthur Boulevard, that was later added on to that proposal and that's being funded through that initial process for pre-development.

So, you know, of those 13 applications, only one went through, which meant most applications did not meet program thresholds.

And the reasons were uh they're substantial.

They had infeasible development budgets, unrealistic service plans, limited or no development capacity or experience, lack of technical expertise and affordable housing developments, and uh providing pre-development commitments to those projects would have put the county in significant risk.

Projects uh that don't meet those requirements often can stall for many, many years, and county investments could be tied up with no delivery or path forward for those projects.

Um, you know, despite the challenges related to the individual proposals, the RFP revealed that there was strong interest in this process of making these properties functional again into affordable housing, um, and that community-based organizations and emerging developers were aware of this as an opportunity, um, that they really were uh interested in in leveraging their local knowledge, their strong community connections, um, and you know, the opportunity to grow the next generation of affordable housing developers.

Um, so we determined that they really needed a lot of capacity building and structure support.

Um, so uh we have taken some of the intervening time to review the process uh that we've gone through to review some of the findings from our TA provider, Hello Housing, to revise the program to make it better suited to meet the opportunities where they are and to meet the community-based organizations where they are.

And so the key changes to the program are that we're gonna radically simplify the requirements.

We're going to pre-select certain sites which are optimal for development, and we're going to require that emerging or other developers partner with pre-qualified developers who've already been vetted in advance and that they can select from.

So this will allow those local-based community organizations to more easily navigate the complex development space.

And so they're going to be a nonprofit partner to those developers.

We're going to provide them with much more flexible affordability requirements and much more flexible financing structure.

So we're working closely in partnership with the Treasurer Tax Collector's Office and with Hello Housing, our TA provider who had previously run a successful chapter eight sale process to select two to three to four sites that will be optimal for development.

We're going to make those development partnerships I mentioned earlier.

And then Hello Housing is going to be brought on board to provide uh full support technical assistance to those three or four projects that are selected as they move through the whole development process.

And so instead of evaluating it based on uh some of the evaluation criteria based um around the large tax credit projects that we have done through Measure A1, we're gonna look towards new evaluation criteria that's based primarily on the feasibility of the project and the value that the project can provide to the county and to its future tenants.

Um we do expect that with these revisions, the process uh will have much more feasible project proposals, um, that the development process would will move much, much, much more quickly, um, and that the county um will see a much more predictable and and frankly a better return on its capital investment and producing these housing units.

Um and we also think that by from the outset requiring a partnership with vetted developers, we can engage in emerging developers and other players um for participation that will be much more successful.

Um so I don't know.

Uh supervisor, if you have any questions about the program changes.

Thank you.

Um you said you have 13 properties and 13 applications that you receive from the 11 applicants.

Do you just can you refresh my memory?

How long does a property need to be basically tax defaulted before it's available for consideration?

Um I believe it's a year and it needs to go through a tax defaulted sale process, which I think there are two every year.

And so once a property um is not sold during that process, then it moves into a separate list, which from which we selected um a short list with the assistance of the Treasury Tax Collector and Hello Housing's office of about 20 properties that we thought could be where the transaction could go through.

And so we provided that list uh with the RFP and allowed folks to select from it or to suggest a different site if they were aware of one.

Um and so they were all all sites that had been on that list that we provided, and so they had all gone through at least one sale process unsuccessfully.

So they end up on a list uh after a year and a half or so of not paying their property taxes, they get on a list, and uh I'm trying to understand like at what point um does the ownership get change and how does like an emerging developer um take title to that property?

Sure.

And and I I should say that there's a long period of delinquency before that year where it actually gets placed on the auction block that can happen.

Um but this actually was one of the chief challenges to the program is that the process of the transfer of ownership uh does need to cure, I think also for an additional year after the sale happens.

And so for these smaller organizations, it was very difficult for them to take responsibility for these properties, site unseen, since you're not allowed to inspect them, and then to hold them and hold liability for them while that process cured.

And so often there were substantial additional costs like securing the site, fencing it potentially, and all of that was happening um with only potentially a pre-development loan available.

So the emerging developers were taking on a significant risk that A, the sale wouldn't go through, or B, there would be some sort of a liability cost in the interim period and all of that without even necessarily knowing how to finance the full project at the end of the line.

So when the emerging developer takes ownership, do they end up paying the back taxes on the property?

Uh no, the taxes can be uh written down by the Treasury Tax Collector's Office, and then also uh the county tax collector's office and cities like Oakland in particular have been working very well together to make sure that a lot of the um liens on the property can be written down as well at the time of sale.

So there is uh savings there for sure.

Okay.

Um this is very helpful because I know when we talked about um the use of A1 dollars and we were looking at every opportunity where it's where preservation production and protection of housing, um, this became like one of the potential options.

It's just that I think over the last decade it's been somewhat challenging uh to identify properties that would likely work um with the confluence of emerging developers, funding support, and all the risks that you mentioned.