Housing Fund –
Informational Update
Rachel Horst
Housing & Neighborhood Services Manager
Van Diggans
Housing Specialist II
Objectives
1. Provide background on Housing Division activities over next five years and resources needed to support them
2. Obtain direction from City Council on future grant opportunities and major funding priorities (five-year housing fund strategy) Housing Funding Policy Framework
2023-2031 Housing Element
• Policy H1.2: Utilize Public Funding and Properties for New Affordable Housing
• Policy H2.2: Support Retention of Existing Lower Income Units • Policy H3.1: Prevent Homelessness
• Policy H2.3: Increase Energy and Water Efficiency in Existing Units
• Policy H5.1.3: Explore the potential to implement a loan program for ADU construction
Housing Funding Policy Framework
Regional and State Housing and Grant Programs
• Metropolitan Transportation Commission's (MTC) Transit-Oriented Communities (TOC) Policy
•Permanent Local Housing Allocation (PLHA)
• Prohousing Designation Program
Housing Funding Policy Framework
Community Feedback on Anti-Displacement and Housing Stability • Overall emphasis on funding for:
• Emergency rental assistance
• Legal aid
• Tenant-landlord education
• August 19, 2026 Community Relations Commission feedback:
• Increased funding for affordable housing – especially for lower-income seniors • Case management
• Home repair programs or weatherization/energy efficiency upgrades for low-income seniors
How Does the City Invest Its Housing Funds?
2025-26 Housing Division Expenditures
Homelessness Prevention/Housing Stability &
Homelessness Response
• Low- and Moderate-Income Housing Asset Fund
• Community Development Block Grant
• Permanent Local Housing Allocation
Affordable Housing Production
• Low- and Moderate-Income Housing Asset Fund
• Commercial Linkage Fee
Homeowner Assistance
• Community Development Block Grant
7%
11%
78%
3%
2025-2026 Expenditures
Homelessness Prevention/Housing Stability
Homelessness Response
Affordable Housing Production
Homeowner Assistance
Housing Division Restricted Funds
Fund Balance (current)
Low- and Moderate-Income Housing Asset Fund (“RDA”)
(F255) $5,381,000
Commercial Linkage Fee (F270) $3,795,000
City Housing Fund (F250) $1,563,000
Housing Set Aside (F130) $6,470,000
Permanent Local Housing Allocation (F280) $48,000 ($293,103)* Community Development Block Grant (F215) $638,000 ($753,586)* HOME (F210) $601,000
*Balance remaining from annual
entitlement/award amount
Permanent Local Housing Allocation (PLHA)
• State formula grant for activities in 3 categories: rental, affordable owner-occupied workforce housing, homelessness assistance • Five-Year Plan required prior to application for Year 1 PLHA funds:
$239,986
• Funds in first cycle of PLHA supported rapid rehousing, homelessness response, homesharing, case management
• Staff recommendation is to provide broad direction for Five-Year Plan (see subsequent funding recommendations)
Prohousing Designation Program
• Competitive program administered by HCD for jurisdictions that go “above and beyond” to promote the production of housing • Jurisdictions scored on a range of policies in four categories • HCD prioritizes Prohousing jurisdictions for various state funding opportunities, including Prohousing Incentive Program (PIP) grant •Staff recommendation is to apply and implement policies needed to gain sufficient points for the designation
MTC Transit-Oriented Communities Incentive
Program
• MTC TOC Policy - standards for density near transit, parking and transportation, commercial stabilization, housing policies • City received $610,000 TOC grant for the Comprehensive Zoning Code Update in 2025 (for partial compliance)
• MTC policy change: no longer required for OBAG funding; now an incentive program
Housing Division Funding Recommendations
1. Housing “Fund”
• Housing Element Policy H1.2, Prohousing Designation
• Eligible uses: production, preservation, and rehab of affordable units • Combine RDA, Housing Set-Aside, CLF for initial total of $5M
2. Affordable Housing Development on City-Owned Land
• Housing Element Policy H1.2
• Acquisition and development of affordable housing on City-owned properties • Combine RDA, Housing Set-Aside, CLF for total of $5M
3. ADU Loan Program
• Housing Element Policy H5.1.3, Prohousing Designation • Loans for moderate-income homeowners (150% AMI); units restricted to 150% AMI • PLHA, Housing Set-Aside for total of $680,000 over five years
PRODUCTION
Housing Division Funding Recommendations
1. Preservation of Affordable (BMR) Housing with Expiring Restrictions • Housing Element Policy H2.2
• Eligible use: preservation of Bridgepointe Condominiums, Belmont Building • Combine City Housing Fund and RDA for minimum $1.5M (Belmont Building costs TBD)
2. Preservation Support for BMR Homeowners
• Emerging need among older BMR condominium housing stock • Eligible use: assistance with HOA dues or assessments • City Housing Fund or Housing Set-Aside for total of $500,000
PRESERVATION
Housing Division Funding Recommendations
1. Homelessness Prevention/Housing Stability – Emergency Rental Assistance Program
• Maintain Emergency Rental Assistance Program at current funding level ($220,000)
• RDA for total of $1.1M over five years
2. Homelessness Prevention/Housing Stability – Legal Services • Community feedback and findings from tenant protections/anti- displacement efforts in 2024-25, MTC TOC
• Increase legal aid by $75,000 annually, or total of $300,000-$375,000 for next four to five years
• Housing Set-Aside for first year; staff will research other sources for subsequent years
PROTECTION
Housing Division Funding Recommendations
3. Homelessness Response – SMPD Homeless Outreach Team (HOT) • Maintain $250,000 of RDA funding for HOT personnel
• Seek other sources of non-local funding for HOT programming (e.g., motel vouchers), e.g., PLHA
• Total $1.25M in RDA over five years; additional funds TBD if City Council directs
PROTECTION
City Council Questions
1. Does 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:
1. $10.68M total for Production*
2. $2M for total Preservation
3. $1.625M total for Protection*
a. Does the City Council support the recommendations for PLHA uses(*)?
4. Does the City Council have any additional input on the proposed programs and/or five-year housing fund strategy?