City Council
Report
City Council Meeting: April 28, 2026
Agenda Item: 12.A
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To: Mayor and City Council
From: Aileen Reynolds, Director, Housing and Human Services Department Subject: Public Hearing and Approval of the Proposed 2026-27 Annual Action Plan Allocating Federal Community Development Block (CDBG) and HOME Investment Partnerships Act Program (HOME) Funds
Recommended Action
Staff recommends that the City Council:
1. Adopt a finding of no possibility of significant effect pursuant to Section 15061(b)(3) (Common Sense Exemption) of the California Environmental Quality Act (CEQA) Guidelines;
2. Hold a public hearing to receive input on the Proposed 2026-27 Annual Action Plan for Community Development Block Grant (CDBG) and Home Investment Partnerships Act (HOME) funds (Attachment A);
3. Approve the Proposed 2026-27 Annual Action Plan; and
4. Authorize the City Manager to submit all necessary documents required to receive the City’s annual allocation of CDBG and HOME entitlement funds to the U.S. Department of Housing and Urban Development (HUD).
Executive Summary
Santa Monica is a longtime recipient of CDBG and HOME entitlement funds. To receive these funds each year, the City must submit a Council-approved Annual Action Plan to HUD to demonstrate that funds will be expended in a manner consistent with the community development strategy outlined in the 2025-29 Consolidated Plan.
The Proposed 2026-27 Annual Action Plan (Attachment A) allocates a projected $1.797 million in CDBG and HOME funds to activities that align with the priority needs identified in the 2025-29 Consolidated Plan (Attachment B) and the Council priorities of 2 of 7
Affordable, Livable, and Secure Housing for All, Clean Streets and Safe Neighborhoods, and Economic Opportunity and Growth. Funds would support capital improvement projects in Pico Neighborhood parks; continued funding for the City’s Small Business Assistance and Tenant Improvement program; tenant-based rental assistance to qualifying households; and substance abuse and outreach services for people currently or recently experiencing homelessness. Staff recommends that Council approve the proposed plans and authorize their submittal to HUD prior to the June 1, 2026 deadline.
Discussion
The CDBG program is designed to benefit the residents of eligible low- and moderateincome neighborhoods. The HOME Program was enacted in 1990 and is the largest Federal block grant to state and local governments designed exclusively to support lowincome households. Activities eligible for funding include community facilities and improvements, preservation of affordable housing, public services, economic development, and program administration.
The City’s current 2025-2029 Consolidated Plan, approved by Council on June 24, 2025 (Attachment C), identifies high-priority community needs, establishes housing and community development strategies, and institutes a set of objectives to guide Federal funding decisions throughout its five program years. Priority needs were identified through the Consolidated Plan’s Needs Assessment and Market Analysis, which incorporated data from the Census and the American Community Survey; local information from City documents such as the Housing Element, Homelessness Strategic Plan, and Assessment of Fair Housing Plan; and input from the public, City commissions, City staff, partner organizations, online survey responses, and interviews with key stakeholders and subject matter experts.
The following priority needs identified in the 2025-29 Consolidated Plan align with the City’s priorities of Affordable, Livable and Secure Housing for All; Clean Streets and Safe Neighborhoods; and Economic Opportunity and Growth Priority Needs Identified Related Consolidated Plan Goals 3 of 7
Public Infrastructure and Facilities
Enhancements
Expand/Improve Public
Infrastructure/Facilities
Affordable Housing Opportunities Provide Safe, Affordable Housing Opportunities
Support for Low Income Workers and
Business Owners Economic Development Opportunities
Services for Low Income Community
Members Provide Vital Services for Low-Mod
Income (LMI) & Special Needs
Services for People Experiencing Populations
Homelessness
The Proposed 2026-27 Annual Action Plan represents the second year of the City’s 2025-29 Consolidated Plan and details the use of the City’s annual CDBG & HOME allocations to address the priority needs and related goals identified in the five-year plan. The activities proposed in the Annual Action Plan are also part of the City’s broader effort to support its most vulnerable populations through local and regional programs.
Included among the proposed activities are two CDBG-eligible projects in the City’s Capital Improvements Program. Both projects are located in the Pico Neighborhood and serve the dual purpose of advancing Consolidated Plan goals while also reducing potential future demands on the City’s General Fund. The Proposed Action Plan also includes continued funding for the Small Business Assistance and Tenant Improvement Fund, ongoing funding for tenant-based rental assistance, and public service offerings for people experiencing homelessness.
The figures shown in the tables below reflect total projected 2026-27 CDBG and HOME resources, including actual CDBG and HOME allocations for 2026-27, the projected balance of unprogrammed prior-year funds available on June 30, 2026, and estimated program income to be received in FY 2026-27.
FUNDING TYPE CDBG HOME TOTAL
Entitlement $1,120,953.00 $486,060.07 $1,607,013.07
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Prior-Year Funds $110,000 $ - $110,000
Program Income $40,000 $40,000 $80,000
$1,270,953.00 $526,060.07 $1,797,013.07
Proposed CDBG/HOME-funded activities for the 2026-27 program year include:
Virginia Avenue Park Playground Replacement: Phase III
(CDBG)
Virginia Avenue Park is home to one of the few playgrounds in the Pico Neighborhood, and one which is heavily used by families, camps, and farmers market visitors. At present, the playground equipment is aging and in need of replacement, the sand surface prevents accessible use of the playground, and community members regularly request shade to be added to provide relief from direct sunlight. Key priorities for the new playground are accessibility, inclusivity, safety, and sustainability. The project will use a phased, multi-year approach to update existing playground equipment, install a more accessible surface, and provide shade covering to create a clean and safe play area for children of all ages and abilities. $ 500,000
Park Improvements in CDBG Areas (CDBG)
This new, ongoing initiative supports targeted improvements to CDBG eligible parks, creating more equitable access to increased amenities within the Pico Neighborhood in alignment with the City’s Parks and Recreation Vision Plan. Funding for FY 2026-27 would support replacement of the Gandara Park basketball court and possible addition of a small dog park at either Gandara Park or Virginia Ave Park, pending a community outreach process. Future projects may include additional improvements in other eligible areas, including Gandara Park, Virginia Avenue Park, and Ishihara Park.
$ 318,762
Small Business Assistance and Tenant Improvement Fund:
(CDBG)
Fund the City’s Small Business Assistance and Tenant Improvement Program to continue cultivating economic growth for eligible Santa Monica small businesses.
$ 50,000
Tenant-Based Rental Assistance (HOME)
Rental subsidies for qualifying low-income households who may be at risk of losing housing.
$ 400,545.07
Public Services (CDBG)
Provides funding to CLARE|MATRIX for the operation of an outreach and substance abuse treatment program team for people currently or recently experiencing homelessness, increasing the City's capacity to address substance use and incidents of overdose
$ 170,000
Administration & Planning (CDBG, HOME)
Up to 20% of CDBG and 10% of HOME funds are allocated to staff time and resources to administer programs in compliance with federal regulations.
$ 284,797
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CHDO Reserve (HOME)
15% set-aside for Community Development
Housing Organization activities (regulatory requirement) $ 72,909
TOTAL $ 1,797,013.07
The following contingencies apply to FY 2026-27 activities proposed for funding. Should available funds differ from projections, funding adjustments will be allocated to activities as follows:
• CDBG Prior-Year Resources are an estimate of savings primarily associated with previously funded Capital Projects. Any additional savings identified prior to submission of the final 2026-27 Action Plan to HUD will be used to increase funding for the proposed “Park Improvements in CDBG Areas” activity. Increased funding would allow for additional improvements at Gandara Park (e.g. swing area resilient surfacing improvements, pathway accessibility improvements) and Virginia Avenue Park (e.g. fitness stations, Farmer's Market surfacing upgrades), pending a community outreach process.
• HUD has intermittently waived the requirement that entitlement jurisdictions set aside 15% of their annual HOME allocation for Community Housing Development Organization activities. Should the waiver be announced for the 2026-27 program year, these funds would be used to increase funding for Tenant-Based Rental Assistance and/or HOME Administration.
Public Participation
Pursuant to Municipal Code Section 2.68.050, and in alignment with HUD regulations, the City is required to hold a public hearing prior to Council approval of an Annual Action Plan. To meet the requirement, staff advertised two public hearings. The first public hearing informed development of the Proposed 2026-27 Annual Action Plan and was held during the March 19, 2026 meeting of the Recreation and Parks Commission.
The second public hearing is being held concurrent with this staff report to Council on April 28, 2026. Staff also presented on the Action Plan at the April 2, 2026 meeting of the Housing Commission. The Proposed 2026-27 Annual Action Plan was also made available for a 30-day public review period beginning on March 27, 2026. Both the public hearing and the public review period were advertised in the Santa Monica Daily 6 of 7
Press and on the City’s CDBG/HOME page. Invitations to participate also went out via email to local service providers, neighborhood associations, and Housing and Human Services boards, commissions, and workgroups. Notices invited participation from Spanish speakers and offered accommodations for people with disabilities upon request. Taken together, these outreach and engagement strategies are part of a concerted effort to obtain significant public input during preparation of the plan. All public comments received to-date are included in the Proposed 2026-27 Annual Action Plan. Any input received through the public review process and public hearings will be incorporated into the final version of the Annual Action Plan prior to submittal to HUD.
Past Council Actions
Meeting Date Description
June 24, 2025 (Attachment C) Approval of 2025-29 Consolidated Plan and 2025-26 Annual Action Plan
Environmental Review
Adoption of the annual action plan is exempt from the California Environmental Quality Act (CEQA) pursuant to Section 15061(b)(3) (Common Sense Exemption) of the CEQA Guidelines, which states that CEQA does not apply, “where it can be seen with certainty that there is no possibility that the activity in question may have a significant effect on the environment. Many of the funding recommendations are for administrative programs (i.e., Small Business Assistance and Tenant Improvement Fund, Tenant-Based Rental Assistance (HOME), Funding for Public Services, Community Housing Development Organization Reserve) which would not result in a significant adverse physical impact on the environment. Furthermore, both CIP projects identified for the awards are subject to City Council approval, and environmental review would be conducted at the time they are approved.
Financial Impacts and Budget Actions
There is no immediate financial impact or budget action necessary as a result of the recommended action. The funding recommendations for the awards will be included in 7 of 7
the City’s Proposed FY 2026-27 Budget and are subject to City Council approval.
HUD’s submission requirements for the CDBG and HOME Consolidated Plan and Annual Action Plan precede the City Council’s adoption of the City’s Budget.
Prepared By: Marc Amaral, Administrator
Approved Forwarded to Council
Attachments:
A. Attachment A: Proposed 2026-27 CDBG/HOME Annual Action Plan B. Attachment B: 2025-2029 CDBG/HOME Consolidated Plan
C. Attachment C: Staff Report: June 24, 2025 (Web Link) D. PowerPoint Presentation