____________________________________________________________________________________
FOR CITY CLERK ONLY
Council Meeting: _______________________
Disposition: ___________________________
Agenda Item No: 3.a
Meeting Date: October 5, 2026
SAN RAFAEL CITY COUNCIL AGENDA REPORT
Department: Community and Economic Development
Prepared by:
Alexis Captanian, Housing Manager
Margaret Kavanaugh-Lynch, Planning Manager
Greg Minor, Assistant Director
City Manager Approval: ____________
TOPIC: STATE OF CALIFORNIA PROHOUSING DESIGNATION
SUBJECT: RESOLUTION OF THE CITY COUNCIL OF THE CITY OF SAN RAFAEL
AUTHORIZING APPLICATION TO AND PARTICIPATION IN THE STATE OF CALIFORNIA’S PROHOUSING DESIGNATION PROGRAM
RECOMMENDATION:
Staff recommends that the City Council adopt a resolution authorizing application to and participation in the State of California’s Prohousing Designation Program.
BACKGROUND:
Below, staff offers background on California’s Prohousing Designation Program (PDP) as well as City housing policies, including the City’s 2023-2031 Housing Element, the City’s Strategic Plan for Fiscal Years 2025-2028, and the City’s Affordable Housing Trust Fund and Community Development Block Grant Process.
The State of California’s Prohousing Designation Program As part of a broader campaign to increase the availability of housing statewide, the 2019-2020 California Budget Act established the PDP (Government Code Section 65589.9). The PDP rewards local jurisdictions that go above and beyond state housing law by providing PDP jurisdictions with priority when applying for state housing programs, including Affordable Housing and Sustainable Communities (AHSC), Infill Infrastructure Grant (IIG), Transformative Climate Communities (TCC), Solutions for Congested Corridors (SCCP), Local Partnership Program (LPP), Transit and Intercity Rail Capital Program (TIRCP), and Sustainable Transportation Planning Grant Program (STPG). Receiving a Prohousing Designation also allows jurisdictions to apply to the Prohousing Incentive Pilot Program (PIP). PIP offers local governments funding to plan or implement the predevelopment, development, acquisition, rehabilitation, or preservation of affordable housing, as well as to assist persons experiencing or at risk of homelessness. In the most recent PIP Notice of Funding Availability cycle, the lowest funding award was $315,762.38.
As of August 10, 2026, 75 local jurisdictions have earned a Prohousing Designation; however, no jurisdiction in Marin County has achieved this distinction. Once a jurisdiction receives a Prohousing Designation, the designation can remain for up to three years from the first day of January following the date of that jurisdiction’s Designation.
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To receive a Prohousing Designation, the California Department of Housing and Community Development (HCD) requires local jurisdictions to satisfy threshold requirements and achieve a minimum score on HCD’s scored PDP application. HCD’s threshold requirements include a compliant housing element, submission of legally sufficient Annual Progress Reports, completion of any staterequired rezoning, compliance with all state housing laws, and constitutional homeless encampment management practices. Additionally, HCD specifically requires local jurisdictions to make findings in the resolution authorizing applying for Prohousing designation that the local jurisdiction will refrain from enacting laws or taking actions that inhibit housing production, including moratoriums on development, local voter approval requirements, downzoning, and unduly restrictive or onerous zoning regulations, development standards, or permit procedures. HCD then divides the scored portion of the PDP application across four categories: (1) favorable zoning and land use, (2) acceleration of housing production timeframes, (3) reduction of construction and development costs, and (4) providing financial subsidies. Once a local jurisdiction submits a PDP application, HCD has 60 days to complete its review.
San Rafael’s 2023-2031 Housing Element
In 2023, the San Rafael City Council adopted its 2023-2031 Housing Element, which included housing policies and programs to meet the City’s existing and projected housing needs across all income groups and to affirmatively further fair housing. These policies and programs are organized under four goals:
end and prevent homelessness; combat housing discrimination, eliminate racial bias and undo historic patterns of segregation; ensure housing habitability and maintenance; and meet housing needs through a variety of housing choices throughout the City. The Housing Element also included Program 18: ProHousing City Designation, “Apply for designation as a ‘Pro-Housing City’ by the State of California.” The City’s 2025 Annual Progress Report includes a summary of progress on Housing Element programs.
San Rafael’s Strategic Plan for Fiscal Years 2025-2028
In addition to adopting its current Housing Element, the City Council adopted a Three-Year Strategic Plan for Fiscal Years 2025-2028 in June 2025. The Strategic Plan features Priority Area D: Housing and Homelessness, Facilitate new housing development, assist in ensuring housing stability, support a “Housing First” model, and implement strategies that reduce homelessness. Within Priority Area D, the Strategic Plan includes the following goals:
• Goal D.1.4: Strategically increase and secure additional funding sources by leveraging key partnerships that will support additional programs that reduce homelessness. • Goal D.2: Advance the development of new housing across all affordability levels to meet the state’s regional housing needs allocation (RHNA) requirements as outlined in the City’s Housing Element, ensuring diverse, sustainable, and equitable housing opportunities for all residents.
San Rafael’s Affordable Housing Trust Fund and Community Development Block Grant The City provides financial support for the development and preservation of affordable housing through the City’s Affordable Housing Trust Fund and Community Development Block Grants (CDBG). The Trust Fund relies on in-lieu fees paid by developers of market-rate housing and commercial projects subject to the fee prescribed by San Rafael Municipal Code 14.16.030(J). The amount of available Trust Fund dollars varies depending on the amount of development activity occurring in the City and whether housing developments include a sufficient percentage of affordable housing onsite to be exempt from the in-lieu fee. In recent years, more housing developers have included affordable units onsite to invoke the State Density Bonus Law, increase the size of their developments, and use concessions and waivers to set aside local development standards. As a result, funding available in the City’s Affordable Housing Trust Fund has decreased significantly.
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The CDBG process provides the City’s secondary source of affordable housing funding. The CDBG is a federally funded program administered by the U.S. Department of Housing and Urban Development (HUD) designed to enhance local quality of life by supporting essential community-based projects.
CDBG funding prioritizes the creation and preservation of affordable housing, improvements to community infrastructure and facilities, and the provision of critical public services benefiting residents in need. HUD requires that at least 70 percent of funds benefit low- and moderate-income households.
For many years, the City of San Rafael has maintained a cooperative agreement with the County of Marin to coordinate the allocation and management of CDBG funds more effectively. In 2026, San Rafael received $508,032 in CDBG funding through the County-administered process.
ANALYSIS:
Obtaining Prohousing Designation from HCD will advance both the City’s Housing Element and Strategic Plan by making additional state funds available that the City can apply toward housing-related efforts. For example, with a Prohousing Designation, San Rafael can apply for the PIP, which offers funding only to local jurisdictions with a Prohousing Designation. Local governments can use PIP funds for the predevelopment, development, acquisition, rehabilitation, and preservation of affordable housing, as well as to assist people experiencing or at risk of homelessness. In addition to PIP funds, a Prohousing Designation would improve San Rafael’s eligibility for other state housing, infrastructure, and transportation-related grants. These additional funding sources are particularly critical given the decrease in in-lieu fee payments to the City’s Affordable Housing Trust Fund and the relatively limited amount of CDBG funds available to San Rafael annually. Thus, obtaining a Prohousing Designation offers opportunities to advance a broad range of Housing Element programs and policies, as well as the City’s Strategic Plan Goals, aimed at securing funding to reduce homelessness and further the development of housing across all income levels.
To obtain a Prohousing Designation, San Rafael must satisfy HCD’s threshold requirements, including remaining in compliance with state housing laws and refraining from actions that constrain housing production. With respect to complying with state law, this is an existing requirement that the City can and must continue to carry out. With regard to refraining from taking actions that constrain housing production, the City has followed and will continue to follow this approach; should the City Council wish to amend the City’s development policies, staff will consult with HCD to ensure that any amendment is not unduly restrictive or onerous in order to satisfy this PDP obligation.
Additional threshold application requirements include confirming that City policies comply with the City’s duty to affirmatively further fair housing pursuant to Government Code sections 8899.50 and 65583.
The City’s 2023-2031 Housing Element includes an assessment of fair housing and programs to combat housing discrimination, eliminate racial bias, and undo historic patterns of segregation.
Likewise, the Prohousing application requires the City to confirm that its General Plan is in alignment with an adopted sustainable communities strategy pursuant to Public Resources Code sections 21155– 21155.4. San Rafael’s General Plan 2040 directly aligns with Plan Bay Area 2050, the region’s Sustainable Communities Strategy, by concentrating housing and employment growth within designated Priority Development Areas (PDAs), expanding multi-modal connectivity, and embedding climate resilience strategies.
The last threshold requirement is that the City must confirm that its policies for the treatment of homeless encampments on public property complies with and will continue to comply with the Constitution, and that the City has enacted best practices consistent with the United States Interagency Council on Homelessness’ “7 Principles for Addressing Encampments.” The City meets these SAN RAFAEL CITY COUNCIL AGENDA REPORT / Page: 4
requirements by regulating, rather than prohibiting, camping on public property through San Rafael Municipal Code Chapter 19.50. Adopted in 2023 and amended in 2024, the ordinance sets reasonable time, place, and manner limits on campsite size, spacing, and setbacks rather than criminalizing the status of being homeless. The ordinance was upheld in federal litigation, and it is consistent with both the U.S. Supreme Court's 2024 decision in City of Grants Pass v. Johnson as well as with the constitutional protections that apply to notice, due process, and personal property. Before any enforcement, the City gives advance written notice, seeks voluntary compliance first, and stores personal property for 90 days. It treats enforcement as a last resort.
The City's approach is also consistent with the USICH "7 Principles for Addressing Encampments" as outlined below:
1. Cross-agency, multi-sector response. The City coordinates across the City Manager's Office, Police, Fire, and Public Works, and works in partnership with the County of Marin and nonprofit providers.
2. Engagement of encampment residents. The City consulted people with lived experience, including the Marin County Lived Experience Advisory Board, in designing its implementation plan.
3. Comprehensive and coordinated outreach. Street outreach and intensive case management are provided through the City and County's Homeless Outreach Team and partner organizations.
4. Basic needs and storage. The City provides sanitation, garbage service, tents, and sleeping bags, and stores property for 90 days.
5. Access to shelter and housing options. The City created a managed Sanctioned Camping Area with case management, security, and hygiene services, and connects residents to shelter and housing placements.
6. Pathways to permanent housing. The City uses state Encampment Resolution Funds and its Affordable Housing Trust Fund to connect residents with housing-focused case management and permanent housing opportunities.
7. Planning for sites after resolution. The City uses administrative orders, signage, and ongoing site assessments to restore resolved areas and prevent encampments from re-forming.
The City will continue to review its policies and practices to ensure ongoing compliance with constitutional requirements and alignment with these principles.
In addition to meeting threshold requirements, to secure a Prohousing Designation the City must fulfill commitments it made when the City adopted its Housing Element in 2023. Staff performed a selfassessment of whether the City meets the minimum required score on HCD’s PDP application and found that the City exceeds the required score, provided the City proceeds with implementing its Housing Element policies and programs. Examples of Housing Element Programs the City would need to implement include the following:
• Program 19: Develop an official City process for developing housing on City-owned lots • Program 20: Prepare a Precise Plan for the North San Rafael Priority Development Area • Program 25: Adopt Objective Design Standards
• Program 36: Reduce Fee Burdens for Affordable Housing Projects • Program 43: Revisions to Parking Standards
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The City’s Community and Economic Development Department’s workplan includes the abovereferenced programs. Accordingly, over the next two years, staff will prepare the Housing Element programs for City Council consideration, keeping the City in compliance with the PDP.
COMMUNITY OUTREACH:
The City Council’s direction to apply for California’s Prohousing Designation emerged from the 2023 adoption of the 2023-2031 Housing Element, which was the product of an intensive public outreach program. The public outreach included three community workshops, eight Working Group meetings, eight briefings to the Planning Commission and City Council, a resident survey, a developer forum, focus groups, interviews, a youth/school program, and presentations to multiple neighborhood groups and community-based organizations.
Additionally, staff presented an update on the City’s application to the PDP at the September 22, 2026, Economic Development and Housing Subcommittee meeting.
FISCAL IMPACT
There is no direct fiscal impact associated with the City applying for Prohousing Designation; however, if the State of California designates the City as Prohousing, the City will gain access to state housing grant funds it is currently ineligible for and will receive priority in available competitive state grant programs. These new state funds will maximize the impact of any City funds invested in housing developments and could reduce the need to dedicate City funds to affordable housing developments.
OPTIONS:
The City Council has the following options to consider on this matter:
1. Adopt the resolution as presented.
2. Adopt the resolution with modifications. Should the Council take this approach, it should be noted that per HCD, any changes to the template resolution must be shown in strikethrough/underline, and substantive deviations may delay review.
3. Take no action and provide direction to staff.
RECOMMENDED ACTION:
Staff recommends that the City Council adopt a resolution authorizing application to and participation in the State of California’s Prohousing Designation Program.
ATTACHMENTS:
1. Resolution
RESOLUTION NO.
RESOLUTION OF THE CITY COUNCIL OF THE CITY OF SAN RAFAEL AUTHORIZING APPLICATION TO AND PARTICIPATION IN THE STATE OF CALIFORNIA’S PROHOUSING
DESIGNATION PROGRAM
WHEREAS, Government Code section 65589.9 established the Prohousing Designation Program (“Program”), which creates incentives for jurisdictions that are compliant with state housing element requirements and that have enacted Prohousing local policies; and WHEREAS, such jurisdictions will be designated Prohousing, and, as such, will receive additional points or other preference during the scoring of their competitive Applications for specified housing and infrastructure funding; and
WHEREAS, the California Department of Housing and Community Development (“Department”) has adopted regulations (Cal. Code Regs., tit. 25, § 6600 et seq.) to implement the Program (“Program Regulations”), as authorized by Government Code section 65589.9, subdivision (d); and
WHEREAS, the City of San Rafael (“Applicant”) desires now to submit an Application for a Prohousing Designation (“Application”).
NOW, THEREFORE, BE IT RESOLVED, that the City Council of the City of San Rafael does hereby approve the following actions:
1. Applicant is hereby authorized and directed to submit an Application to the Department.
2. Applicant acknowledges and confirms that it is currently in compliance with applicable housing law.
3. Applicant acknowledges and confirms that it will continue to comply with applicable laws and to refrain from enacting laws, developing policies, or taking other local governmental actions that may or do inhibit or constrain housing production. Examples of such local laws, policies, and actions include moratoriums on development; local voter approval requirements related to housing production; downzoning; and unduly restrictive or onerous zoning regulations, development standards, or permit procedures. Applicant further acknowledges and confirms that the Prohousing Policies in its Application comply with its duty to Affirmatively Further Fair Housing pursuant to Government Code sections 8899.50 and 65583. Applicant further acknowledges and confirms that its general plan is in alignment with an adopted sustainable communities strategy pursuant to Public Resources Code sections 21155- 21155.4. The City further acknowledges and confirms that its policies for the treatment of homeless encampments on public property comply with and will continue to comply with the Constitution and that it has enacted best practices in its jurisdiction that are consistent with the United States Interagency Council on Homelessness’ “7 Principles for Addressing Encampments” (June 17, 2022, update).
4. If the Application is approved, the City Manager is hereby authorized and directed to enter into, execute, and deliver all documents required or deemed necessary or appropriate to participate in the Program, and all amendments thereto (the “Program Documents”).
5. The City acknowledges and agrees that it shall be subject to the Application; the terms and conditions specified in the Program Documents; the Program Regulations; and any and all other applicable law.
6. The City Manager is authorized to execute and deliver the Application and the Program Documents on behalf of the City for participation in the Program.
I, LINDSAY LARA, Clerk of the City of San Rafael, hereby certify that the foregoing Resolution was duly and regularly introduced and adopted at a regular meeting of the City Council of the City of San Rafael, held on Monday, the 5th day of October 2026, by the following vote, to wit:
AYES: Councilmembers:
NOES: Councilmembers:
ABSENT: Councilmembers:
_______________________
Lindsay Lara, City Clerk