REQUEST FOR CITY COUNCIL ACTION
SUBMITTED TO: Honorable Mayor and City Council Members
SUBMITTED BY: Travis Hopkins, City Manager
VIA: Jennifer Villasenor, Director of Community Development
PREPARED BY: Charles Kovac, Housing Manager
Subject:
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Public Hearing to adopt Resolution No. 2025-32 approving the 2025-26 Annual Action Plan, 2025-29 Consolidated Plan, 2025-29 Citizen Participation Plan, and 2025-29 Orange County Regional Assessment of Fair Housing for Use of CDBG and HOME Funds
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Statement of Issue:
The City of Huntington Beach receives annual federal entitlement grants from the U.S. Department of Housing and Urban Development (HUD) through the Community Development Block Grant (CDBG) and HOME Investment Partnerships (HOME) programs. To remain eligible for these funds, HUD requires the City to submit the following planning documents:
• Five-Year Consolidated Plan
• Citizen Participation Plan
• Assessment of Fair Housing (prepared regionally)
• Annual Action Plan (submitted each year)
These documents identify the community’s needs and priorities, describe how CDBG and HOME funds will be used, and outline how the public will be involved in the process.
In accordance with HUD regulations, these documents were made available for a 30-day public review and comment period that ran from April 4, 2025 to May 6, 2025. During this time, the draft plans were posted on the City’s website, and hard copies were made available at City Hall and local libraries.
The public hearing on May 6, 2025, fulfills HUD’s requirement for formal adoption of the following documents:
• 2025-26 Annual Action Plan
• 2025-29 Consolidated Plan
• 2025-29 Citizen Participation Plan
• 2025-29 Orange County Regional Assessment of Fair Housing
Financial Impact:
The City has not yet received its 2025-26 CDBG and HOME grant allocations from HUD, which are expected to be released in mid-May. As a result, the estimated budgets for these programs are based on the current 2024-25 funding levels.
• Estimated CDBG funds: $1,380,063
• Estimated HOME funds: $984,428
These estimates include projected entitlement amounts, carryover funds from prior years, and program income (such as repayments from previously issued housing loans).
Approval of the 2025-26 Annual Action Plan, 2025-29 Consolidated Plan, 2025-29 Citizen Participation Plan, and the 2025-29 Orange County Regional Assessment of Fair Housing will not impact the City’s General Fund.
Recommended Action:
recommendation
A) Conduct a public hearing on the following documents:
1. 2025-26 Annual Action Plan (for CDBG and HOME funding)
2. 2025-29 Consolidated Plan
3. 2025-29 Citizen Participation Plan
4. 2025-29 Orange County Regional Assessment of Fair Housing
B) Approve and adopt Resolution No. 2025-32, “A Resolution of the City Council of the City of Huntington Beach, California, Approving the 2025-2029 Consolidated Plan, 2025-2026 Action Plan, 2025-2029 Orange County Regional Assessment of Fair Housing, and the 2025-2029 Citizen Participation Plan for Federal Community Development Block Grant and HOME Investment Partnerships Programs;” and
C) Authorize the City Manager to sign all necessary documents.
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Alternative Action(s):
Do not approve, and direct staff accordingly.
If the City does not submit the approved documents to HUD within 60 days of receiving the final allocation amounts, it may be considered out of compliance and risk losing CDBG and HOME funding. Alternatively, the City Council may choose to modify the proposed funding recommendations for specific CDBG and HOME projects and programs. Any modifications must remain within the overall budget limits and program requirements outlined in this report.
Analysis:
Overview of CDBG and HOME Programs
The Community Development Block Grant (CDBG) and HOME Investment Partnerships (HOME) programs are federal grant programs administered by the United States Department of Housing and Urban Development (HUD). These programs provide funding to local governments to support housing, infrastructure, and community development activities. The City of Huntington Beach receives annual entitlement allocations from both programs. To continue receiving these funds, the City must prepare and adopt a series of planning documents that identify local needs, set priorities, and describe how funds will be used.
The planning documents presented for adoption include the following:
• The 2025-29 Consolidated Plan, which sets the strategic vision for the use of CDBG and HOME funds over the next five years;
• The 2025-26 Annual Action Plan, which identifies specific projects and programs to be funded in the upcoming fiscal year;
• The 2025-29 Citizen Participation Plan, which outlines how the City will engage the public in the planning and implementation process; and,
• The 2025-29 Orange County Regional Assessment of Fair Housing, a HUD-required analysis of barriers to fair housing that supports long-term planning.
Together, these documents establish the policy and funding framework for more than $9 million in projected federal funds to address local housing and community development needs.
Community Needs and Strategic Priorities
The 2025-29 Consolidated Plan is the City’s strategic roadmap for investing HUD funds. It is based on a combination of local data, community feedback, and HUD requirements. The City’s estimated five-year funding includes:
• CDBG: $5.9 million
• HOME: $3.5 million
• Total: Approximately $9.4 million
The plan identifies seven priority areas:
1. Homeless Services
2. Community Services
3. Services for Special Needs Populations
4. Housing Needs
5. Community Facility Needs
6. Infrastructure Needs
7. Other Housing and Community Development Needs
To develop these priorities, the City conducted a Housing and Community Development Needs Survey in 2024 and held two public meetings to gather feedback on community needs.
Annual Action Plan
The 2025-26 Annual Action Plan serves as the first-year implementation plan under the 2025-29 Consolidated Plan. It outlines how the City will use its estimated CDBG and HOME allocations during the 2025-26 fiscal year to address the priorities identified in the five-year plan.
The Annual Action Plan includes:
• A summary of the recommended programs and projects;
• Proposed outcomes and performance measures; and,
• Funding levels for public services, capital projects, and administration.
The Annual Action Plan also functions as the City’s formal grant application to HUD for the upcoming program year.
HUD regulations require that CDBG and HOME funds be used primarily to benefit low- and moderate-income households. To ensure that funding addresses local needs, the City issues a Notice of Funding Availability (NOFA) and invites nonprofits and community-based organizations to apply for CDBG public service funding.
The Citizen Participation Advisory Board (CPAB) reviews all eligible applications, hears oral presentations from the applicants, receives public comments, and makes funding recommendations to the City Council. These recommendations are summarized in Table 2 of Attachment 1 and detailed in the 2025-26 Annual Action Plan (Exhibit B of Attachment 2).
2025-26 CDBG and HOME Funding Levels
As of the date of this report, HUD has not released the City’s official 2025-26 CDBG and HOME allocations. Therefore, the funding levels used in this report are based on the City’s 2024-25 allocations, along with projected carryover and program income.
Estimated funding for the 2025-26 program year includes:
CDBG Funds
• Entitlement allocation: $1,121,195
• Carryover funds from prior years: $228,868
• Program income (e.g., housing loan repayments): $30,000
• Total estimated CDBG resources: $1,380,063
HOME Funds
• Entitlement allocation: $538,328
• Carryover funds from prior years: $321,100
• Program income: $125,000
• Total estimated HOME resources: $984,428
These estimated budgets support a variety of eligible activities, including public services, housing preservation, code enforcement, capital improvements, and program administration.
The actual allocations will be incorporated into the final Annual Action Plan prior to submission to HUD. Adjustments to specific funding categories will follow the proportional increase or decrease strategies outlined later in this report, ensuring compliance with HUD funding limits.
Funds Available for CDBG Public Services Programs
Under federal regulations, the City may allocate up to 15 percent of its annual CDBG entitlement toward public service activities. These programs are intended to improve community services that support low- and moderate-income residents.
Based on the estimated CDBG entitlement allocation funding level of $1,121,195, maximum amount available for public service programs in 2025-26 is $168,179.
Eligible public service activities may include services related to:
• Health and mental health services
• Substance abuse treatment
• Employment assistance
• Childcare
• Education
• Recreation
• Welfare and supportive services
These funds are awarded through the City’s annual NOFA process and are recommended by the CPAB based on community needs and program impact.
Funds Available for CDBG Capital Projects
CDBG regulations allow the City to use a portion of its funding for eligible capital improvements and neighborhood enhancement projects that benefit low- and moderate-income residents. These projects typically address long-term infrastructure needs, improve public facilities, and support neighborhood revitalization efforts.
For the 2025-26 program year, the City estimates that $987,645 will be available for CDBG capital projects. Eligible uses include:
• Public facility improvements, including ADA accessibility upgrades
• Code enforcement in low- and moderate-income neighborhoods
• Infrastructure improvements such as sidewalks, curbs, and drainage
• Rehabilitation and preservation of existing housing
• Other capital activities that serve low- and moderate-income residents
These investments help ensure neighborhoods are safe, accessible, and well-maintained, and align with the community priorities identified in the Consolidated Plan.
Funds Available for HOME Capital Projects
The HOME program provides funding to support a range of housing-related activities that benefit low-income households. For the 2025-26 program year, the City estimates that $790,595 will be available for HOME capital activities.
Eligible uses include:
• Temporary rental assistance for income-eligible households
• Assistance for households at risk of homelessness
• Support for mobile home residents through tenant-based rental assistance (TBRA)
• Set-aside funding for future projects in partnership with a qualified Community Housing Development Organization (CHDO), as required by HUD
HOME funding allows the City to provide targeted assistance to residents facing housing instability and to respond flexibly to changing community needs. All uses of HOME funds must comply with federal program requirements and focus on improving housing opportunities for low-income individuals and families.
Funds Available for Program Administration
HUD allows the City to use a portion of its CDBG and HOME funding for program administration and planning activities necessary to carry out the programs. For 2025-26 the amount available for CDBG Administration (up to 20% of the total CDBG entitlement funds) is estimated at $224,239. The amount available for HOME Administration (up to 10% of the total HOME entitlement funds) is estimated at $53,833
In addition to the 2025-26 HOME administration funds, staff proposes to use approximately $140,000 in unspent HOME administration funds from prior years (fiscal years 2020-21 and 2021-22). These funds will support the following activities:
• Preparing the 2026-27 Annual Action Plan
• Compliance monitoring of existing affordable housing projects
• Fair housing services (proposed to be provided by the Fair Housing Foundation)
• Program administration, grant management, and regulatory compliance
Fair housing services are a HUD mandated activity and include education, tenant/landlord mediation, unlawful detainer assistance, and investigations of housing discrimination complaints.
Fiscal Year 2025-26 Funding Recommendations
As part of the annual funding process, the City issued a NOFA and invited eligible nonprofit and community-based organizations to apply for CDBG public service funding. Applications were reviewed by the CPAB as part of a publicly noticed process.
Following the NOFA and application period, the CPAB held a public meeting on January 30, 2025, to hear presentations from applicants and receive community input. On February 20, 2025, the CPAB reconvened to deliberate and develop its funding recommendations. The City Council also reviewed the proposed funding allocations at a joint study session with CPAB on March 18, 2025.
Recommended allocations are based on estimated entitlement amounts, projected carryover, and anticipated program income. Final adjustments will be made once HUD releases the City’s official 2025-26 grant allocations.
CDBG Public Services - $168,179 (15% cap)
The CPAB recommended funding for six public service programs that benefit low- and moderate-income Huntington Beach residents:
• Children’s Bureau - After-school youth enrichment program (Oak View): $40,530
• Robyne’s Nest - Transitional services for vulnerable youth: $40,529
• Senior Outreach Care Management - Homebound senior care services: $30,530
• Project Hope Alliance - Case management for at-risk youth: $20,530
• Pathways to Independence - Mentorship and housing support for young women: $20,530
• StandUp for Kids - Street outreach and support for homeless youth: $15,530
CDBG Capital Projects - $987,645
• Code Enforcement: $246,506
• Housing Rehabilitation Loans and Grants: $381,139
• TBRA Program Supportive Services: $235,000
• Sidewalks and Curbs ADA Improvements - Maintenance Zone 3: $125,000
These projects address infrastructure, neighborhood preservation, and housing-related services in qualified low- and moderate-income areas of the City.
In addition to the funding request above for the Housing Rehabilitation Program, staff is also requesting that the maximum allowable grant within this program’s Policies and Procedures be increased from $15,000 to $20,000 to address significant increases in labor and construction material costs. This action is incorporated within Resolution No. 2025-32 (Attachment 2) and the 2025-26 Action Plan, which is part of Exhibit “B” to Attachment 2.
CDBG Administration - $224,239
Up to 20% of CDBG funds may be used for planning and program administration. These funds support activities required to ensure compliance with HUD regulations, including:
• Preparation of the Consolidated Plan, Annual Action Plan, and related amendments
• Program monitoring and performance reporting
• Financial and regulatory compliance
• Oversight of subrecipients and grant-funded projects
HOME Capital Projects - $790,595
HOME funds support rental assistance and help address housing instability among low-income households. Recommended 2025-26 HOME allocations include:
• Tenant-Based Rental Assistance (TBRA) Programs:
o Families Forward: $200,000
o Mercy House: $200,000
o Mobile Home TBRA (senior households): $128,841
• CHDO Set-Aside (required 15% reserve for future housing development): $261,754
HOME Administration - $53,833 + $140,000 carryover
Up to 10% of current-year HOME funds and prior-year carryover (from FY 2020-21 and 2021-22) will be used to support:
• Preparation of the 2026-27 Annual Action Plan
• Program oversight, monitoring, and HUD-required reporting
• Coordination with affordable housing providers and service partners
• Fair housing services (proposed to be provided by the Fair Housing Foundation)
CDBG & HOME Funding Alternatives
Because HUD has not yet released the City’s official 2025-26 CDBG and HOME allocations, the CPAB’s recommendations and the draft Annual Action Plan are based on estimated funding levels. To remain flexible and compliant, the CPAB has recommended the following alternative strategies to adjust funding if actual allocations are higher or lower than expected. These adjustments will be made prior to submitting the final Action Plan to HUD, and no additional Council action will be required, unless changes exceed the scope of these strategies.
CDBG Public Services:
• If funding is lower than the estimated: Each of the six recommended programs will receive a proportionate reduction in funding.
• If funding is higher than estimated: The additional funds will be evenly distributed across the six recommended programs, not to exceed the 15% cap set by HUD.
CDBG Capital Projects:
• If funding is lower than estimated: Funding for Code Enforcement and TBRA Supportive Services will be maintained. Any necessary reductions will be applied equally to the Housing Rehabilitation Program and ADA Improvements.
• If funding is higher than estimated: Funding for Code Enforcement and TBRA Supportive Services will remain the same. Additional funds will be split equally between the Housing Rehabilitation Program and ADA Improvements.
HOME Capital Projects:
• If funding is lower than estimated: The Mobile Home TBRA Program will be adjusted to reflect the reduced budget. All other HOME-funded activities will remain unchanged.
• If funding is higher than estimated: Additional funds will be allocated to the Mobile Home TBRA Program. Other program allocations will remain as proposed.
CHDO Set-Aside (HOME Requirement): The 15% CHDO set-aside will be adjusted proportionally based on the final HOME allocation, as required by HUD. These funds will remain reserved for future eligible projects carried out by a qualified Community Housing Development Organization.
Administration Funds (CDBG and HOME): Administrative allocations will be adjusted proportionally, based on the final grant amounts, but will not exceed HUD’s caps:
• CDBG Admin: 20% of total CDBG allocation
• HOME Admin: 10% of total HOME allocation
Citizen Participation Plan
HUD regulations require the City to adopt a Citizen Participation Plan that outlines how the public will be involved in the planning, implementation, and evaluation of CDBG and HOME programs. This plan must be updated periodically to reflect current engagement practices and regulatory requirements.
The City’s updated 2025-29 Citizen Participation Plan describes the process for involving residents, stakeholders, and community organizations in the development of:
• The Consolidated Plan
• Annual Action Plans
• Substantial amendments to these plans
• The Consolidated Annual Performance and Evaluation Report (CAPER) - an end-of-year report that details how CDBG and HOME funds were used and the progress made toward achieving the City’s Consolidated Plan goals
The plan emphasizes meaningful outreach to low- and moderate-income residents and encourages broad participation throughout the City. It also outlines the role of the CPAB in reviewing funding applications and making recommendations to the City Council.
The updated plan ensures consistency with 24 CFR 91.105, the federal regulation governing citizen participation for HUD-funded entitlement jurisdictions. The draft plan is included as Exhibit D of Attachment 2.
Orange County Regional Assessment of Fair Housing
The federal Fair Housing Act requires jurisdictions receiving HUD funding to affirmatively further fair housing by identifying barriers to housing choice and take meaningful actions to overcome them. To meet this requirement, cities across Orange County collaborated on a Regional Assessment of Fair Housing (AFH) for the 2025-29 planning period. This assessment replaces the former Analysis of Impediments to Fair Housing and is intended to promote a more coordinated, data-driven overview of fair housing issues across the region.
The AFH includes:
• A summary of regional housing conditions and demographic trends;
• Identification of contributing factors to fair housing challenges; and,
• Shared goals to guide future planning efforts.
The findings of the assessment were considered as part of the development of the Consolidated Plan and Annual Action Plan, in accordance with HUD requirements.
The 2025-2029 Orange County Regional Assessment of Fair Housing is included as Exhibit C of Attachment 2.
Public Review Process
In accordance with HUD regulations and the City’s Citizen Participation Plan, the draft versions of the following documents were made available for a 30-day public review and comment period from April 4 to May 6, 2025:
• 2025-26 Annual Action Plan
• 2025-29 Consolidated Plan
• 2025-29 Citizen Participation Plan
• 2025-29 Orange County Regional Assessment of Fair Housing
Draft documents were posted on the City’s website and made available for in-person review at City Hall, the Central Library, and the Oak View Library.
Environmental Status:
This action is not subject to the California Environmental Quality Act (CEQA) pursuant to Sections 15060(c)(2) (the activity will not result in a direct or reasonably foreseeable indirect physical change in the environment) and 15060(c)(3) (the activity is not a project as defined in Section 15378) of the CEQA Guidelines, California Code of Regulations, Title 14, Chapter 3, because it has no potential for resulting in physical change to the environment, directly or indirectly.
Since federal funds are being used for the proposed CDBG and HOME activities, National Environmental Policy Act (NEPA) compliance will be required prior to execution of funding agreements and disbursement of funds. The City will complete all NEPA Compliance for the approved CDBG and HOME activities prior to the start of the Program Year (July 1, 2025).
Strategic Plan Goal:
Non Applicable - Administrative Item
Attachment(s):
1. FY 2025-26 CDBG & HOME Funding and Recommendations
2. Resolution No. 2025-32, “A Resolution of the City Council of the City of Huntington Beach, California, Approving the 2025-2029 Consolidated Plan, 2025-2026 Annual Action Plan, 2025-2029 Orange County Regional Assessment of Fair Housing, and the 2025-2029 Citizen Participation Plan for Federal Community Development Block Grant and HOME Investment Partnerships Programs.”
3. PowerPoint Presentation