Milpitas council approves relaunch of rental-assistance program with changes to expand eligibility and guardrails

The Milpitas City Council on Aug. 12 approved restarting the Workforce Housing Rental Assistance Program (WRAP) Round 2 using Permanent Local Housing Allocation (PLHA) funds awarded under the state's SB 2 program, and authorized staff to allocate an additional $20,000 from the Affordable Housing Community Benefit Fund for administration.

Sarah Balcha, senior administrative analyst in the Office of Housing, summarized the program. The city received PLHA awards from the SB 2 funding rounds covering 2019'2021 allocation years; staff described the award total as roughly $1.0 million (net of program administration and homeless outreach set-asides). Under the program approved in October 2023, 22 eligible households are currently receiving $645 per month for up to 24 months. Round 2 seeks to use remaining funds to assist up to 28 additional households at the same $645/month level for 24 months ($433,440 total) and requests a $20,000 one-time fee for the third-party administrator Forward to relaunch the program.

Staff proposed two programmatic changes to increase eligible applicants: (1) remove the requirement that an eligible household must occupy an entire rental unit (to allow shared-living arrangements common at very-low-income levels), and (2) remove the requirement that at least one adult in the household be employed in Milpitas at the time of qualification. Instead, staff recommended eligibility be defined as at least one adult in the household living in and/or working in Milpitas, with priority given to Milpitas residents. Balcha said the low 30% AMI eligibility threshold (for example, about $42,200 for a one-person household and $60,250 for a four-person household) made it unlikely that many eligible households could afford whole-unit rents at local market rates, creating the need for these changes.

Staff noted Forward provides online intake, multi-language support and eligibility checks and that the city lacks internal capacity to administer a program of this scale without a contracted administrator. Staff also reported that round 1 attracted 108 applicants but only 22 met the stricter initial eligibility criteria.

Council discussion added several conditions and clarifications before approving the relaunch: that payouts not exceed the actual rent owed (staff agreed payments would be limited to the rent amount), that staff survey Forward's customer service and include feedback from Forward's work on the city's small-business grants, that the city implement stronger checks to prevent payments continuing if tenants move, and that the city prioritize Milpitas residents for selection. City Attorney recommended and staff agreed the programmatic changes be submitted to the California Department of Housing and Community Development (HCD) for approval as necessary to ensure compliance with the grant terms.

Council voted 5-0 to receive the report and approve WRAP Round 2 with the program changes, additional $20,000 administrative allocation, and the added direction to survey Forward and strengthen fraud prevention and residency verification checks. The motion recorded the council's request that staff coordinate the changes with HCD and that staff return if HCD requires modifications.

Staff will proceed with Forward as the third-party administrator, allocate the requested $20,000 from the Affordable Housing Community Benefit Fund for program administration, and return with implementation details and any required HCD approvals. The city manager and housing staff said they will continue reviewing the program design for future PLHA tranches (2022/2023 allocations and future rounds) and will consider alternate program durations or tiered amounts when those funds are programmed.