STAFF REPORT
City of Lancaster
CC 11
1/13/2026
TN
Date:January 13, 2026
To: Mayor Parris and City Council Members
From: Patti Garibay, Director - Community Development
Becky Bartlett, Manager – Housing
Subject: Adopt Resolution Authorizing Application for State of California Prohousing Incentive Program Funds
Recommendation:
1. Adopt Resolution No.___, authorizing the submittal of an application to the California State Department of Housing and Community Development (HCD) for funding under the Prohousing Incentive Program (PIP); the execution of a standard agreement if selected for such funding and any amendments thereto; and any related documents necessary to participate in the Prohousing Incentive Program.
2.If funded, accept the Prohousing Incentive Program grant award funds, and appropriate said funds into a Prohousing Incentive Program Fund account number, to be created by Finance.
3.Authorize the City Manager, or their designee, to allocate any awarded funds—up to $1,140,000—in alignment with the Prohousing Incentive Program.
4.Find that this item is not a project pursuant to the California Environmental Quality Act.
G.C. Section 84308: No
Fiscal Impact:
None at this time. Should Lancaster be awarded funds from this competitive grant program, the City will receive up to $1,140,000.00 to fund predevelopment costs for the development of 200 affordable first-time homebuyer condominiums for workforce households at the HNR-3 former Antelope Valley Fairgrounds site in the City of Lancaster (Northeast corner of Division and Avenue I). Direct staff time is an eligible grant-funded cost. 2 2
7 5
Background:
The PIP complements the Prohousing Designation Program by incentivizing jurisdictions that adopt Prohousing Policies to achieve a Prohousing Designation. Through this program, grants are offered to support a wide range of planning and implementation efforts focused on housing and community development.
The program goal is to enable moderate-income households earning no more than 120 percent of Area Median Income (AMI), currently $127,900 per year for a family of four in Los Angeles County, to access affordable rental or ownership housing.
HCD issued a Notice of Funding Availability (NOFA) on September 30, 2025, for several PIP activities, with applications due by March 31, 2026. Funding under this NOFA is provided from California’s Building Homes and Jobs Trust Fund. The maximum application amount is $1,140,000, and HCD will provide funding to cover activity delivery fees (administrative costs) of up to 5 percent of the total award amount.
PIP award funds are based on jurisdiction size and Prohousing Designation Program score (as codified in the California Code of Regulations Title 25, Division 1, Chapter 6, Subchapter 6.6, Sections 6600 through 6608). The City of Lancaster had a Prohousing Designation Program score of 39, and as a newly designated Prohousing City, it is highly competitive for these PIP funds.
If the application is approved, funding will become available once the City Manager executes a Standard Agreement with HCD. This process has historically taken five to six months following the award announcement. The City will request $1,140,000 through the Prohousing Designation Program; however, the final award amount may be less than requested but will not exceed this amount. Should the grant be awarded, all activity delivery costs will be fully covered by the grant.
Funding from the PIP award will be allocated to cover predevelopment expenses for the HNR-3 first-time homebuyer condominium project through a loan structure. This funding will take the form of a soft subordinate loan, evenly distributed across all units within the development. The loan will become due if a unit is no longer owner-occupied or undergoes a cash-out refinance; otherwise, it will be forgiven at the end of a 30-year term. By functioning as a long-term subordinate loan, these funds help offset development financing costs, ultimately reducing the financial burden for each first-time homebuyer.
Attachment:
Resolution Authorizing Application for State of California Prohousing Incentive Program Funds