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DISCUSSION
City of San Bernardino
Request for Council Action
Date: January 21, 2026
To: Honorable Mayor and City Council Members
From: Gabriel Elliott, Director of Community Development & Housing Department: Community Development & Housing
Subject: Exclusive Negotiating Agreement (ENA) with
Neighborhood Housing Services of the Inland Empire
(NHSIE) for the Development of Surplus Land Act Site 8, 9 and 10 for Affordable Housing (Ward 4)
Recommendation:
It is recommended that the Mayor and City Council of the City of San Bernardino, California adopt Resolution No. 2026-006:
1. Approve the Exclusive Negotiating Agreement (ENA) between the City of San Bernardino and Neighborhood Housing Services of the Inland Empire (NHSIE), a California non-profit public benefit corporation, for the development of approximately 0.86 acres of city-owned surplus land, identified as sites 8, 9 and 10 (“Property”), for affordable housing; and
2. Authorize the City Manager, Deputy City Manager, or designee to execute the ENA, along with any subsequent amendments, extensions, and other necessary documents to complete the transaction.
City Manager's Comments
City Manager recommends approval.
Executive Summary
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The proposed action would authorize the City of San Bernardino to enter into an Exclusive Negotiating Agreement (ENA) with Neighborhood Housing Services of the Inland Empire (NHSIE), a nonprofit affordable housing developer, for the potential development of affordable homeownership housing on three City-owned surplus land sites located along East 49th Street in Ward 4 (Sites 8, 9, and 10), totaling approximately 0.86 acres. The sites were declared surplus pursuant to the Surplus Land Act, and all required notification and good faith negotiation procedures have been completed in coordination with the California Department of Housing and Community Development (HCD). The ENA establishes a structured negotiation period to evaluate project feasibility and negotiate the terms of a future Disposition and Development Agreement (DDA), including site control, affordability, design, financing, and long-term operations.
Background
The City owns properties located on East 49 th Street, identified as Surplus Land Act Sites 8, 9, and 10. These properties have been designated for disposal under the Surplus Land Act, meaning they are considered excess property that the City does not need for public use and may be made available for development or other purposes.
The sites include the following Assessor’s Parcel Numbers (APNs): 0154-125-07 (Site 8), 0154-126-01 and 0154-126-02 (Site 9), and 0154-126-30 (Site 10).
On November 16, 2022, the City Council of the City of San Bernardino adopted Resolution No. 2022-234, which declared the Property surplus, pursuant to Government Code Section 54220 and issued Notices of Availability (“NOA”) on February 27, 2024.
On August 2, 2023, the City selected NHSIE, a nonprofit affordable housing developer, to partner with the City to develop approximately 0.86 acres of the Property for affordable housing (“Project”).
On October 18, 2024, the California Department of Housing and Community Development (HCD) issued a letter to the City determining that the City had met all the requirements under the Surplus Land Act (SLA) for the purposes of disposing of the Property.
Discussion
Neighborhood Housing Services of the Inland Empire (NHSIE) is a community-based, community-driven 501(c)(3) nonprofit organization with more than 40 years of experience advancing housing stability and neighborhood revitalization throughout the Inland Empire. As a U.S. Department of Housing and Urban Development (HUD)- approved housing counseling agency, a certified Community Development Financial Institution (CDFI), and an experienced affordable housing developer, NHSIE integrates financial counseling, development expertise, and long-term asset management to deliver sustainable housing outcomes.
NHSIE’s proposed development approach is informed by demonstrated community 3 1
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need identified through its direct service programs. Over the past three years, NHSIE has documented demand from more than 100 households within 12 months of mortgage readiness seeking homeownership opportunities, as well as approximately 2,400 residents interested in naturally affordable rental housing. This demand has shaped a comprehensive housing strategy designed to address the full continuum of housing needs, including homeownership, transitional housing, and workforce-oriented rental opportunities.
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For Surplus Land Act Sites 8, 9, and 10, NHSIE proposes the development of a small- scale homeownership community consisting of approximately 19 townhome units distributed across the three sites (approximately five to eight units per site). The homes are designed to average approximately 1,300 square feet and are intended to serve first-time homebuyers and families seeking stable, long-term housing opportunities.
On NHSIE-owned property, the organization proposes a hybrid model that combines immediate homeownership opportunities with a lease-to-own pathway for households participating in NHSIE’s Self-Sufficiency Program. Under this model, certain units will be offered for purchase upon completion, while a portion will be retained as rental units to support households actively preparing for homeownership. This approach provides a structured transition for families building financial capacity and housing readiness.
NHSIE also proposes utilizing innovative construction methods to reduce development costs, shorten construction timelines, and enhance building durability and climate resilience. These strategies are intended to support long-term affordability by lowering both initial development costs and ongoing operating expenses.
Traditional sustainability measures will include high-performance building envelopes, energy-efficient windows and doors, advanced air sealing, and high-efficiency HVAC systems with smart controls. Projects will incorporate drought-tolerant, native landscaping to reduce water use and maintenance demands and will prioritize locally sourced materials where feasible. Developments will pursue third-party green building certifications, such as LEED, ENERGY STAR, or Green Globes, to verify environmental performance.
Where feasible, NHSIE proposes the use of 3D concrete printing technology, which utilizes computer-controlled equipment to construct structural walls layer by layer using specialized concrete mixes. This method significantly accelerates construction timelines and improves structural resilience. The technology offers enhanced fire resistance, seismic performance, energy efficiency, and durability, while reducing long- term maintenance needs.
NHSIE also proposes the strategic use of factory-built manufactured housing constructed in climate-controlled environments in accordance with federal HUD standards. As a licensed manufactured housing dealer, NHSIE is able to achieve cost savings that are passed directly to residents through reduced purchase prices.
Manufactured housing offers consistent quality control, accelerated construction schedules, and affordability advantages compared to traditional site-built construction.
Through this integrated approach, combining demonstrated community need, innovative construction technologies, and sustainable design, NHSIE is positioned to deliver high-quality housing that advances the City’s affordable housing goals, supports workforce stability, and promotes long-term neighborhood investment and growth.
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The following are the key terms of the ENA with NHSIE:
Agreement to Negotiate: The City and the Developer agree to engage in exclusive, good-faith negotiations during the Negotiating Period to finalize a mutually acceptable Disposition and Development Agreement (DDA). Negotiating Period: The parties have a 6-month period (with the potential of (2) extensions for a period of three (3) months each time) to negotiate the Disposition and Development Agreement (DDA). The ENA terminates upon signing of the DDA or if no agreement is reached by the end of the period. Disposition and Development Agreement (DDA): The DDA is the final legal contract that will outline the specific terms of the development project, including property transfer, project design, development schedule, budgeting, operational procedures, maintenance, compliance with CEQA, NEPA, and other relevant details.
Environmental Review: The project must comply with the California Environmental Quality Act (CEQA) and National Environmental Policy Act (NEPA) and undergo an environmental impact assessment to identify potential environmental impacts and implement mitigation measures to reduce or avoid significant impacts.
Financing Proposal: The Developer must provide a detailed financial analysis, including development costs, operating expenses, and funding sources, to demonstrate the project's financial feasibility.
Development Documents: The Developer must prepare detailed plans, drawings, and specifications for the project and obtain necessary permits and approvals from relevant agencies.
Due Diligence: The Developer must conduct thorough investigations, including inspections, tests, and studies, to assess the Property's condition and suitability for development and to identify and mitigate potential risks and liabilities. Community Engagement: The City and Developer must engage with the community through public meetings, surveys, or other methods to seek input and address community concerns.
Upon completion of negotiations, staff will return at a later date to present a Disposition and Development Agreement (DDA) for the City Council’s consideration and approval.
Approval of the ENA establishes a framework to negotiate key project terms and advance project planning but does not obligate the City to convey the properties. This initiative reflects the City’s commitment to addressing housing needs through sustainable partnerships and strategic investments.
2021-2025 Strategic Targets and Goals
Approving the ENA aligns with Key Strategic Target and Goal No. 3: Improved Quality of Life. Partnering with NHSIE to develop affordable housing will reduce the number of blighted city-owned properties while providing essential affordable housing opportunities to the community.
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Fiscal Impact
There is no impact to the General Fund associated with approving an Exclusive Negotiating Agreement (ENA) between the City of San Bernardino and Neighborhood Housing Services of the Inland Empire (NHSIE). No additional funding is being requested with this item.
Conclusion
It is recommended that the Mayor and City Council of the City of San Bernardino, California:
1. Approve the Exclusive Negotiating Agreement (ENA) between the City of San Bernardino and Neighborhood Housing Services of the Inland Empire (NHSIE), a California non-profit public benefit corporation, for the development of approximately 0.86 acres of city-owned surplus land, identified as sites 8, 9 and 10, for affordable housing; and
2. Authorize the City Manager, Deputy City Manager, or designee to execute the ENA, along with any subsequent amendments, extensions, and other necessary documents to complete the transaction.
Attachments
Attachment 1 Resolution No. 2022-234
Attachment 2 Resolution No. 2026-006
Attachment 3 NHSIE Sites 8-10 ENA
Ward:
Fourth Ward
Synopsis of Previous Council Actions: N/A
CC: Eric Levitt, City Manager