St. Pete to spend 76% of ARPA funds on housing

St. Petersburg City Council passed a resolution to transfer $10 million in American Rescue Plan Act (ARPA) funds for immediate affordable housing projects and a proposal to spend 76% of the $45 million total, eliminating money for other programs.

Interim City Administrator Tom Greene began Thursday’s presentation by stating his team is “laser-focused” on the housing and affordability aspects of the ARPA funding, calling it the highest priority for both the community and city officials. He said the city administration recognizes the funding is a one-time resource and hopes to ensure its investment develops sustainable and long-term solutions.

“We’re taking the time to get it right as opposed to just getting it done, so to speak,” he said.

St. Petersburg is receiving $45.4 million in ARPA funding, receiving half this year and the remainder next summer. The city must allocate the resources by Dec. 31, 2024. Thursday’s resolution would transfer $10 million in ARPA funding into the city’s general fund.

Once the $10 million moves to the general fund, officials would use the money to cover a “standard allowance” for revenue losses during the pandemic, as stipulated by the federal government. That move would then free $10 million of the city’s general fund for proposed affordable housing investments.

The proposed investments are $6.5 million for the Deuces Rising townhome development and $3.5 million for the housing capital improvement fund, to construct new affordable housing units for residents making 60% of the area median income (AMI). The maximum rent on a one-bedroom apartment would be $831.

Following the ongoing housing crisis, the city has revised its initial allocation strategy for ARPA funding. Greene proposed increasing the housing allocation from the suggested $20 million in November to $34.3 million, and maintaining the previously suggested amount of $11.1 million for health and social equity. The city would reduce the proposed $8 million for infrastructure, $5.6 million for economic recovery and $651,900 for public health and safety to zero.

“We believe that the $34.3 million in resources in affordable housing is a number we can effectively deploy in the time period provided,” said Greene. “To do that, we would be deploying all $45 million in those two areas of impact.”

Assistant City Administrator Rob Gerdes told councilmember the city plans to invest $2.5 million in the Scattered Site Family Shelter. The shelter could accommodate 25 homeless families, and Gerdes said most homeless shelters in the city are currently at capacity. He anticipates bringing a contract to the city council no later than April.

Affordable multi-family housing would receive the largest investment at $20 million. City administrators will issue a notice of funding availability for that project in April. Gerdes said the city would also set aside $3.5 million for rental assistance and $500,000 for administrative expenses.

Gerdes explained the city has depleted its emergency rental assistance (ERA) funds and is now working with the county to use its resources. A memorandum of understanding goes before county commissioners March 8 and the city council two days later.

“So, hopefully, we will approve that memorandum of understanding and start to process county ERA dollars in the City of St. Petersburg,” said Gerdes. “There is also the possibility that if we work through that funding, the (county) treasury could release additional ERA funding that has not been used by other cities.”

Councilmember Richie Floyd thanked the administrators for listening to the council’s opinion on increasing ARPA funding for housing. He said it is disappointing to see funding on other items reduced to zero, “but I think we all understand the situation we’re in today.”

Council Chair Gina Driscoll asked about other funding sources for the eliminated areas, such as the Infrastructure Investment and Jobs Act. Greene said there are ways to reshuffle money into water resource programs that would fall under the infrastructure allotment, but replacing the $5 million for economic recovery is challenging.

“But, to your point, there are infrastructure grants that are becoming available,” said Greene.

Driscoll also asked why the city is using $6.5 million from ARPA funding for the Deuces Rising project if there is community redevelopment act (CRA) money available. She added that the project aligns perfectly with the mission of the CRA, and the city could use the $6.5 million on other housing projects.

Gerdes explained that after the city transfers the $6.5 million into the general fund for the Deuces Rising project, and the townhomes are built and sold, the money returns to the city as a flexible funding source.

Greene pointed out that CRA funding is going toward the commercial side of the Deuces Rising project, and Gerdes added the city is also using that funding to bury power lines that are dangerously close to the development.

“It sounds like there is a new approach with the CRA dollars that we have,” said Driscoll. “I believe it was around $3 million that we rolled over last time, and it’s money that’s there for us to use for the purposes laid out by the CRA.”

The city council unanimously approved the resolution, with council members Ed Montanari and Deborah Figgs-Sanders absent.