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CITY OF SAN MATEO
Agenda Report
City Hall
330 W. 20th Avenue
San Mateo CA 94403
www.cityofsanmateo.org
Agenda Number: 17 Section Name: OLD BUSINESS Account Number: 10-3133 File ID: 26-11333 TO: City Council
FROM: Alex Khojikian, City Manager
PREPARED BY: Community Development Department
MEETING DATE: September 8, 2026
SUBJECT:
Housing Fund — Informational Update
RECOMMENDATION:
Receive an update on the status of the City’s housing funds and provide direction on funding strategy and prioritization for the next five years.
BACKGROUND:
As the City continues implementation of its 2023-2031 Housing Element and pursues major grant programs to support its efforts, there is a need to develop a housing funding strategy for the next five years. The purpose of this study session is to seek City Council direction on upcoming funding-related opportunities, including compliance with the Metropolitan Transportation Commission’s Transit-Oriented Communities (MTC TOC) Policy, pursuing a Prohousing Designation from the State, and use of Permanent Local Housing Allocation (PLHA) funding, and how to prioritize expenditure of City Housing funds.
Housing Funding Policy Framework
There are specific Housing Element policies, grant program requirements, and community feedback received over the past year that should guide how the framework for a Housing funding strategy is developed. 2023-2031 Housing Element
The City of San Mateo’s 2023-2031 Housing Element (Housing Element) established goals, policies, and programs to facilitate the production of 7,015 housing units and address key housing challenges identified through the housing needs assessment and community input process. The following policies and programs in the Housing Element workplan directly address the allocation or prioritization of City housing funds:
•Policy H1.2: Utilize Public Funding and Properties for New Affordable Housing oAction: Identify ways to create a stand-alone Housing Trust Fund and utilize that fund to leverage new funding sources.
oAction: Prioritize available local housing funds to assist in the production of at least 543 below market rate units by 2031; emphasis on ELI units.
oAction: Support affordable housing development, including ELI units, on the City owned property at 4142 S. El Camino Real.
•Policy H2.2: Support Retention of Existing Lower Income Units oAction: Coordinate with the owners of Bridgepointe Condominiums and identify a funding source to preserve the 24 very low-income units as affordable upon expiration of the City’s regulatory agreement in 2027. oAction: Coordinate with the owners of Belmont Building (6 units) and identify funding source to preserve the
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units prior to expiration of the City’s regulatory agreement in 2036. •Policy H3.1: Prevent Homelessness
oAction: Allocate PLHA, CDBG, and other local funds to support homeless prevention. •Policy H2.3 Increase Energy and Water Efficiency in Existing Units oAction: Weatherization upgrades through grants for lower-income residents; serve 7 annually. •Policy H5.1.3 Explore the potential to implement a loan program for ADU construction. oAction: Work with 21 Elements collaborative to design a regional loan forgiveness program. *This is a summary of relevant Housing Element items. For the full text of Housing Element Goals, Policies, and Programs, please refer to the Housing Element.
Regional and State Housing and Funding Programs
Three upcoming opportunities at the regional and state level will require prioritization of housing funds to align with program requirements and position the City to be more competitive for housing and transportation grant funding.
MTC TOC Policy - The City is currently pursuing full compliance for the Transit-Oriented Communities (TOC) Policy Incentive Program, a program of the Metropolitan Transportation Commission (MTC). Last May, MTC changed the TOC Policy program so that compliance is no longer mandatory to compete for One Bay Area Grant (OBAG) funding, but instead makes the City eligible for additional funding. The TOC Policy includes standards for density near transit, parking and transportation; a commercial stabilization policy; and housing policies in the areas of production, preservation, and protection. The City received a $610,000 TOC grant for the Comprehensive Zoning Code Update in 2025 with a commitment to pursue partial TOC Policy compliance as part of the Zoning Code Update effort.
Permanent Local Housing Allocation - The City is a recipient of the Permanent Local Housing Allocation (PLHA), a formula- based (noncompetitive), state-funded grant program administered by the Department of Housing and Community Development (HCD) for housing-related projects and programs to address housing needs. The program runs on a five-year cycle, the first of which ended on June 30, 2026. PLHA requires jurisdictions to create a Five-Year Plan for the uses of PLHA funds. The process to develop the City’s next five-year plan will begin in fall 2026.
Prohousing Designation Program - City staff is also researching the State’s Prohousing Designation Program (PDP), an HCD program that rewards local governments that go beyond minimum state laws to remove barriers to housing production, streamline approvals, and adopt inclusive zoning. Prohousing Designated cities gain scoring preferences for state grants and exclusive access to the Prohousing Incentive Program (PIP), a grant program also administered by HCD.
Community Feedback on Anti-Displacement and Housing Stability Common themes have emerged from community outreach conducted for the City’s Housing Element and housing policy discussions that may also inform the City’s housing funding strategy. Many funding-related comments have centered around the importance of emergency rental assistance, free legal aid, and tenant-landlord education in preventing eviction of lower-income tenants.
On August 19, 2026, the Community Relations Commission (CRC) held a discussion on housing funding priorities at its regular meeting. At the meeting, members of the public expressed strong support for increasing funding for legal aid, tenant education and outreach, and emergency rental assistance. Comments emphasized the need for deeply affordable housing; case management, especially for lower-income seniors; and programs for home repairs or weatherization/energy efficiency upgrades for lower-income seniors. Commissioner feedback reinforced these comments and emphasized a need for investments in homelessness prevention and new affordable housing for the lower-income senior population.
Housing Division Restricted Funds and Fund Balances
The Housing Division administers several restricted housing funds. These funds draw revenue from various sources,
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including new commercial development, new affordable housing development, loan repayments and revenues from the former Redevelopment Agency, and state and federal grants. In recent years, the City has seen significant revenue in some of these restricted funds, though annual revenue varies significantly, and projections can be challenging. Each housing fund, its estimated balance as of July 1, 2026, and its primary uses are listed below. Summaries of each fund from the City’s adopted FY26-27 Budget are included in Attachment 2.
Housing Successor/LMIHAF/RDA (Fund 255) - $5,381,000
The Low- and Moderate-Income Housing Asset Fund (also called “Housing Successor” Fund or “RDA” Fund) consists of loan payments, lease payments, sale of property, and any other revenue generated from loans or assets held by the City as Housing Successor to the former Redevelopment Agency (RDA). State law regulates the usage of these funds to support housing projects that assist households whose income ranges up to 80% of the Area Median Income (AMI).
This fund has a statutory limit of spending up to $500,000 annually for services to prevent homelessness or serve households experiencing homelessness. Administrative expenses of up to $518,000 can also be covered through this source for overseeing RDA assets. The City’s Emergency Rental Assistance Program and the Police Department Homeless Outreach Team (HOT) are both currently funded with RDA money. The fund has also been used for loans to the Kiku Crossing and Bespoke affordable housing developments. The annual revenue for this fund is unpredictable; however, staff estimates a conservative annual revenue of approximately $200,000.
Commercial Linkage Fee (Fund 270) - $3,795,000
The Commercial Linkage Fee (CLF) is assessed on new commercial developments to address the impacts of new job creation on housing availability and affordability for workers. Developers pay a fee based on square footage of new commercial space depending on type of use: office, retail, or hotel. The funds are to be used for housing programs to assist workers who make up to 120% of AMI and for rehabilitation of housing units. The state requires jurisdictions to program CLF funds every five years and report on the updated CLF budget.
In Fiscal Year (FY) 25-26, $1,000,000 of CLF money was set aside to support the Bespoke affordable housing development. Previously, CLF has been used to fund the construction of the Kiku Crossing affordable housing development. Revenue is dependent on projects receiving a building permit. This is challenging to predict; however, staff estimates that a cumulative amount of up to $7,000,000 could be collected over the next five years based on the current project pipeline.
City Housing Fund (Fund 250) - $1,563,000
The City Housing Fund captures a variety of housing-related revenues, including loan repayments from prior federal rehabilitation and City first-time homebuyer loans, fees collected for housing loan subordination requests, and Below Market Rate (BMR) program in-lieu fees. This fund is less restrictive, but annual revenues are highly unpredictable. Staff estimates an annual revenue of approximately $260,000.
The fund currently supports Housing Division staff salaries and the First-Time Home Buyer Program’s Administrator. Below market rate (BMR) loans to low-income home buyers are also supported through this funding source; one to two loans of $50,000 are issued each year.
General Fund Housing Set Aside (Fund 130) - $6,470,000
Since the dissolution of Redevelopment Agencies, the City has voluntarily set aside 20% of General Fund property tax revenues from its former Redevelopment Areas to be used for affordable housing development and other housing-related programs. This flexible source of funding has been used in recent years for staff salaries, loans to affordable housing projects, and grants for housing case management. As part of the recently amended Housing Element approved by HCD, if the City is forecasting and experiencing a budget deficit the City may forgo its annual General Fund contribution to the Housing Set Aside Fund.
PLHA (Fund 280) - $48,000 (remaining of $293,103 total allocation for FY25-26) The Permanent Local Housing Allocation (PLHA) is a state grant program administered by HCD that began in 2020. Funding
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is continuous through state receipts of document recording fees each year. These funds may be used for housing-related projects and programs that assist in addressing unmet housing needs. Funds are awarded in five-year cycles and are distributed to local grant recipients following a City Council-adopted Five-Year Plan. Prior PLHA grantees included affordable housing developments with supportive services, a homeless shelter, a rapid rehousing program, and a homeless shelter, all serving San Mateo residents.
The City has just completed the initial five-year cycle and will begin the planning process for the next Five-Year Plan in the coming months, followed by the application for Year 1 funds. The formula allocation for Year 1 is $239,986, with annual funding of approximately $240,000 anticipated in the upcoming years.
CDBG (Fund 215) - $638,000 (remaining of $753,586 entitlement for FY25-26) The Community Development Block Grant (CDBG) Program is a federal grant from the U.S. Department of Housing and Urban Development (HUD) that provides flexible funding for community development projects and programs to assist lower- income neighborhoods and households. San Mateo has participated in this program since 1977. The fund consists primarily of an annual entitlement grant, though CDBG also generates program income from loan repayments.
The City draws down its annual entitlement plus any prior-year unexpended funds on a reimbursement basis from HUD.
The current balance shown above reflects the remaining funds from the 25-26 program year, plus a small amount of prior- year funds. The balance is relatively large due to the City receiving its 25-26 entitlement funds at the end of the program year, as the City was delayed in executing its grant agreement with HUD for the funds until June 2026. The entitlement amount for the 26-27 program year is $802,758.
HOME (Fund 210) - $601,000
The HOME Investment Partnership (HOME) Program is a federal grant used to support rental and homeownership housing opportunities for households up to 60-80% of the AMI. The City received an annual HOME grant from 1994 to 2016. The fund now includes program income from repayments on loans funded with HOME funds in the past. The City has been part of the San Mateo County HOME Consortium since 2016 and therefore does not receive a direct allocation from HUD; however, it does receive a small annual allocation for administration from San Mateo County ($11,000-12,000) to offset staffing costs associating with monitoring HOME-regulated projects.
Housing Funding Strategy Recommendations
Over the last five years, housing-related services have accounted for roughly one quarter of all Housing Division annual expenditures. The majority of City-restricted housing funds are intended for affordable housing production and preservation — expenditures that are driven by the affordable housing development pipeline rather than a fixed schedule.
To see how the City distributed its funds in FY 25-26 organized by funding category, refer to the chart in Attachment 1.
Housing Division expenditures in the coming years will be shaped by the City’s Housing Element commitments, major grant opportunities, and community feedback. To guide how this strategy takes shape and how funds are expended, staff is seeking City Council direction on next steps related to MTC TOC Policy compliance, applying for a Prohousing Designation, and PLHA priorities, as any other specific activities will require City investment beyond those in the Housing Element.
MTC TOC Policy
As noted above, staff is currently reviewing City housing programs and policies against the requirements of the MTC TOC Policy to identify any “gaps” in the program requirements to achieve full compliance. As outlined in the MTC Administrative Guidelines for TOC Communities Policy, jurisdictions are required to have, or adopt affordable housing policies in the Production, Preservation, and Protection categories and meet a minimum funding threshold for each category to gain sufficient points in the scoring system to be eligible for the TOC Policy Incentive Program. Currently, the City does not meet the threshold for all housing categories. Staff is seeking direction from City Council to adjust funding in the Preservation and Protection categories to achieve compliance with the affordable housing component of MTC TOC Policy. This is discussed in greater detail below.
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Prohousing Designation Program
The Prohousing Designation Program is a competitive program for jurisdictions that go “above and beyond” to promote the production of housing. The application consists of a rigorous review of City policies and programs to demonstrate compliance with a menu of policies across four broad categories. The designation is valid for three years and benefits jurisdictions by prioritizing them for various types of state funding, including the Prohousing Incentive Program (PIP). To achieve this designation, the City would have to augment existing policies and create a new program, which is discussed in more detail below.
Staff is seeking City Council direction to apply for the Prohousing Designation by the end of 2026 so that the City can compete for PIP funds in the next cycle (Q1 of 2027). Prior to submitting the application, staff would return to City Council with other items required to achieve the designation.
PLHA Five-Year Plan
As noted above, HCD has released a Notice of Funding Availability (NOFA) for the second five-year cycle. An award amount of $239,986 is estimated for the first year of the new five-year cycle. HCD requires applicant jurisdictions to submit a Five- Year Plan for PLHA expenditures before applying for funds annually. Eligible uses for this fund are divided into three main activity areas: rental, affordable owner-occupied workforce housing, and homelessness assistance.
Staff is seeking initial direction on how to allocate these funds and to commence the Five-Year Plan process this fall. In the previous cycle, the City mainly funded services under the homelessness assistance activity (shelter operations, rental assistance, and case management). PLHA funds may again be utilized for homelessness assistance. A portion of the funds may also be used to support an ADU Loan Program through the ADU Resource Center. This would further Housing Element policies H 3.1 (Prevent Homelessness) and H 5.1.3 (ADU Loan Program).
Recommendations for Housing Division Funding Strategy
The following funding recommendations fall broadly under the “3Ps” - Production, Preservation, and Protection. The funding recommendations and potential sources below are meant to serve as guideposts for the City Council in providing direction to staff. Some of these recommendations incorporate the requirements of MTC TOC Policy, Prohousing Designation, and PLHA, and are subject to change based on City Council direction. Funding amounts are approximate.
PRODUCTION - $10.68M total
1. Housing Fund to Support Production, Preservation, and Rehab There are a combined $17.69M across Housing Set-Aside, RDA, City Housing, and CLF funds, which is sufficient to support far more than the targeted 260 affordable housing units at $100,000 per unit (average) cited in the Housing Element.
However, to meet the requirements of a Housing Trust Fund for a Prohousing Designation, per the Prohousing Designation Guidelines, a jurisdiction must go beyond having funds “on deposit” in their respective funds by creating a local “housing trust fund” and demonstrate that it will “regularly and significantly” contribute to that fund for affordable housing. The City could meet this by setting aside a combination of Housing Set-Aside, RDA, City Housing, or CLF funds for the purpose of funding projects. Projects could be awarded via a Notice of Funding Availability (NOFA), whereby developers are invited to submit applications by a set deadline and all applications are considered on a competitive basis, or an ongoing “over-the counter” program in which funds are awarded to eligible projects on a first-come, first-serve basis. In either case, the City must commit to replenishing this account at “regular intervals,”i.e., annually.
If the City Council directs staff to pursue the Prohousing Designation, staff recommends establishing a dedicated fund with an initial amount of $5M to align with the Prohousing Designation. This will also serve to encourage developers to move projects forward in San Mateo and meet Housing Element Policy H 2.1 (Utilize Public Funding and Properties for New Affordable Housing). Taking this action creates more transparency and signals the City’s capacity and intent to fund projects of various types. Production, preservation, and rehab activities are all eligible uses under the funds named above.
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As a first step, City Council may appropriate funds into a new account via resolution at a future City Council meeting. Staff can then develop key program parameters for developers to apply for funds on a rolling basis. The recommended amount ($5M) is based on potential requests for funding that staff anticipates in the coming years and could support two to three projects, depending on the size. For each project that receives Housing restricted funds, staff would work to leverage the City’s contribution with the state grant sources noted in this report and potentially with federal sources, thus multiplying the impact of the City’s investment.
2. Housing Fund to Support Affordable Housing Development on City-Owned Land Housing Element Policy H 1.2 requires the City to assess feasibility of developing the City-owned parcel at 4142 S.
El Camino Real with affordable housing, with an emphasis on extremely- and very low-income units. This site has limited potential alone, but with assemblage of the adjacent two parcels, there could be enhanced potential for a larger, mixed-use, mixed-income development with development partners. Realizing a project at this scale would likely require a sizeable City contribution, thus feasibility assessment is necessary before more specifics can be established.
Additionally, jurisdictions can claim credit under both MTC TOC Policy and the Prohousing Designation for demonstrating a commitment to utilizing publicly owned land for affordable housing beyond what is required by the Surplus Land Act (25% of units affordable to lower-income households). For these reasons, staff recommends setting aside $5M in a combination of RDA, CLF, and Housing Set-Aside funds for acquisition and development on City-owned parcels. Staff is also researching ways to leverage City funds for a project of this size, such as through the Prohousing Incentive Program or possibly through federal funding sources.
3.ADU Loan Program
Housing Element Policy H 5.1.3 – Explore Potential to Create an ADU Loan Program commits the City to explore the potential for a city ADU loan program, or, if not feasible, to work with the 21 Elements Planning Collaborative to design a regional loan forgiveness program. Staff has been participating in the ADU Implementation Group led by the ADU Resource Center of San Mateo County, which has developed an ADU loan program concept. The program aims to support homeowners in building an ADU on their property by lowering the financial and technical barriers to ADU construction.
The program would provide low-interest loans to low- to moderate-income homeowners (<120% AMI) seeking to build an ADU. To be effective, it is anticipated that a loan of $100,000 would be provided to each approved homeowner seeking to construct an ADU, plus $10,000 in technical assistance. If one loan per year is provided to a San Mateo homeowner, this would be a commitment of up to $550,000 over five years. The ADU Resource Center would manage the administration, with HEART of San Mateo County overseeing loan origination and monitoring and participating jurisdictions sharing the administrative cost of about $80,000 annually. Assuming that at least three jurisdictions participate, San Mateo’s share would cost approximately $26,000 annually (approximately $130,000 over five years). Thus, the total cost of this program would be up to $680,000 over five years. It is anticipated that interested jurisdictions will execute an MOU with HEART in the fall, with program launch targeted for summer 2027. A potential partial source of funding for this program is Housing Set-Aside or RDA. Staff are researching whether PLHA may be used for this purpose.
PRESERVATION - $2M total
1. Preservation of Affordable Housing with Expiring Restrictions Housing Element Policy H 2.2 requires the City to try to preserve units with an expiring affordability restriction. At Bridgepointe Condominiums, the affordability restrictions for 59 affordable units (24 of which are very low-income units) are set to expire in December 2027. The Belmont Building includes six very low-income units, for which the restriction expires in 2032.
This summer, City staff met with the Bridgepointe ownership team to discuss future plans for the complex and to begin preliminary negotiations to extend the units’ affordability restrictions. As of the date of this report, the
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ownership is undecided about plans for the building but did inquire about potential City funding to support interior renovations on the units in exchange for extending the affordability restrictions.
Staff recommends setting aside Housing funds from the City Housing Fund or RDA for the Bridgepointe Condominiums and the Belmont Building, the two developments with expiring affordability restrictions during and immediately following this Housing Element cycle. If the City and the ownership of these two developments can reach an agreement to extend the affordability terms in exchange for a City loan, staff would return to City Council with loan terms and an appropriation recommendation. A preliminary estimate for Bridgepointe is $1.5M. Since the Belmont Building restrictions do not expire until 2032, staff does not yet have an estimate for this preservation effort, and will return to Council for direction at a future date when more information is available.
2. Preservation Support for Below Market-Rate Homeowners The City’s primary form of homeowner assistance is through repair and rehab programs that allow lower-income homeowners to remain in their homes. The City partners with Rebuilding Together Peninsula for two CDBG-funded home repair programs, Safe and Home and National Rebuilding Day, and the CalHome Home Rehab Loan program.
Many grant and loan recipients are single-family homeowners, though condominium homeowners have also received assistance for interior improvements like accessibility and safety upgrades to kitchens and bathrooms.
There is not currently a source of funding to assist lower-income condominium homeowners in communities in need of common area or exterior maintenance and repair. With Senate Bill 326 (SB 326, sometimes referred to as the “balcony bill”) taking effect and HOAs being held responsible for inspecting and repairing exterior elevated structures such as balconies, along with increased scrutiny from lenders, HOAs have struggled to build sufficient reserves for repairs. High HOA dues that exceed a BMR homeowner’s ability to pay is a common occurrence, as the City has seen with one of its First-Time Homebuyer complexes, Gateway Commons (211 and 221 S. Fremont St).
To address this issue, the City could develop a loan or grant program for BMR homeowners to assist with HOA dues or assessments. Staff is seeking City Council direction on whether to research and propose a program targeting BMR homeowners. If the City Council wishes to pursue this program, staff recommends setting aside $500,000 for five years using the most flexible Housing funding sources, such as City Housing Fund or Housing Set- Aside.
PROTECTION - $1.625M total
1. Homelessness Prevention/Housing Stability - Emergency Rental Assistance Program The City began strategically using RDA funds for homelessness prevention and response in FY25-26 by budgeting for the Police Department Homeless Outreach Team (HOT) and creating the Emergency Rental Assistance Program (ERAP). The ERAP was established as an anti-displacement policy in response to the fact that most evictions in San Mateo County are due to nonpayment of rent. This program, administered by Samaritan House, expended all funds for FY 24-25 ($168,000), and City Council directed staff to increase the budget to $220,000 for FY 26-27. Staff is seeking direction to maintain this funding level in future years. Staff will continue to work closely with Samaritan House to monitor program effectiveness and provide annual report-backs on utilization of the fund and any patterns that emerge from the data collected. The first-year annual report on the Program will be published this fall. Staff is seeking confirmation from Council to plan for this program being funded over the coming five-year period.
2. Homelessness Prevention/Housing Stability - Legal Services As noted above, the City has received significant feedback on the need for legal services from its community outreach on anti-displacement, including during the August 19th Community Relations Commission meeting. Staff has found that apparent underfunding of “upstream,” or preventative housing services such as tenant legal education and access to legal services is a countywide issue and that neighboring jurisdictions are similarly considering how to address the apparent gap in these services.
In preparation for this meeting, staff met with City-funded organizations Project Sentinel and Legal Aid for input on
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how funding trends in recent years have affected their ability to provide these services, and how additional funding from San Mateo and other jurisdictions throughout the County could be used to serve more lower-income tenants in San Mateo. Overall, both providers indicated that staff capacity has decreased in recent years, and that an additional staff member, such as one additional full-time attorney or one full-time case manager, would improve service levels.
For TOC Policy compliance, MTC allows for policies to be combined into one to meet the funding threshold ($300,000 over four years). Within the Protection category, the City meets the programmatic and dollar threshold for the Rental Assistance Program policy. By combining two existing programs that qualify as Legal Assistance and Fair Housing Enforcement at their current funding levels, the City still falls short of the minimum funding threshold by approximately $65,000 annually.
Given these findings and the parameters of the MTC TOC Policy, staff recommends increasing legal services funding by $75,000 annually for the next four years ($300,000 total). Legal services are not an eligible use of funds under PLHA or other available state programs, so staff recommends using the Housing Set-Aside Fund, which is flexible funding source and would allow for spending on this type of activity for the first year. Staff will assess if other funding sources could be used for this activity in coming years and will continue to seek outside sources to leverage this funding.
Staff also recommends working with other jurisdictions in San Mateo County, including the County itself, to explore a multijurisdictional, combined fund for legal services. This model is in use in other counties in California and could be a more efficient means of increasing legal services access in the County than funding separate programs in individual cities.
3. Homelessness Response- SMPD Homeless Outreach Team
The Housing Division has utilized RDA funds to support the Police Department’s Homeless Outreach Team (HOT) since FY 25-26. Identifying this new source has allowed the City to reduce its reliance on the General Fund while sustaining funding for two permanent members of the HOT. HOT is a highly successful model for homelessness response, and incorporating the team into the Housing Division budget has strengthened collaboration between the Police Department and Housing staff in serving the community. Staff recommends continuing to use the annual $500,000 RDA set-aside for homelessness prevention and response to support HOT and is seeking City Council direction on whether to maintain or increase HOT funding levels in subsequent fiscal years. HOT is currently funded at $250,000 annually, and the estimated total expenditures under Protection assume that funding level remains constant over the five-year planning period.
City Council Questions
Given the above recommendations, staff is seeking direction from the City Council on the following questions:
1. Does the City Council support applying for the Prohousing Designation Program?
2. Does the City Council support pursuing full compliance with the MTC TOC Policy?
3. Does the City Council support setting aside approximately $10.68M for Production, $2M for Preservation, and $1.625M for Protection to support the activities described in this report? Next Steps
Staff will implement City Council direction on each of the above areas, many of which will take the form of future City Council items. Specifically, if directed, staff would take the following steps:
•Continue to pursue full compliance with the MTC TOC Policy affordable housing policies, with the target to take all necessary actions and submit documentation to MTC by July 2027. •Apply for the Prohousing Designation, which requires an extensive public input process, including a 30-day public comment period for review of the full application prior to submittal to HCD. Staff has developed a preliminary schedule for this application that includes initial consultation with HCD, review by the Planning Commission and Community Relations Commission of the draft application during the public comment period and bringing the application back to City Council for adoption later this fall.
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•Launch Five-Year Plan process for PLHA. Staff anticipates holding a study session with the Community Relations Commission to kick off the Five-Year Plan process and then returning to City Council for further action this fall. •Return with appropriation resolution for an over-the-counter Housing Fund program. Staff anticipates returning to City Council at the next meeting with the outline of this program and an appropriation resolution in time to submit for the Prohousing Designation, should City Council direct staff to apply. •Return in the fall with the draft Memorandum of Understanding (MOU) with the ADU Resource Center for the creation of the Affordable ADU Loan Program, which will include the parameters of the program, responsibilities of the City and other parties, and funding amounts, for City Council approval. Please note that this MOU is non- binding—there is no requirement for the City to make any financial contribution-- and would be followed by a formal funding agreement.
•Return with an appropriation resolution for an acquisition/development fund and a preservation fund . •Return with an appropriation resolution and, if applicable, program parameters for any other new programs cited above (e.g., BMR Homeowner Preservation Support, Legal Services Fund), if the City Council directs staff accordingly.
BUDGET IMPACT:
This is a study session and no formal actions are being taken by the City Council, so there is no impact to the General Fund.
ENVIRONMENTAL DETERMINATION:
This study session is not a project subject to CEQA, because it can be seen with certainty that it will not cause a physical change in the environment. (Public Resources Code Section 21065.) NOTICE PROVIDED:
All meeting noticing requirements were met. Information about this meeting was provided via multiple City communications channels. A public notice announcing this meeting was published on the San Mateo Daily Journal on August 14, 2026. The meeting was also announced on City of San Mateo’s eNews and the City’s News and Announcements page located on the homepage of the City’s website. Social media (Facebook and Instagram) were utilized to invite residents to the September 8 City Council Study Session. Notices were sent out through the City’s Housing Policies & Programs email list and the Community Relations Commission email list.
STRATEGIC PLAN ALIGNMENT:
This housing fund study session supports implementation of the City’s Housing initiative.
ATTACHMENTS
Att 1 – Housing Division (Non-Personnel) Expenditures in FY 25-26 Att 2 – Housing Fund Summaries
STAFF CONTACT
Rachel Horst, Housing Manager
[email protected]
(650) 522-7223