REPORT TO HOUSING AND HUMAN SERVICES COMMISSION
SUBJECT
Title
Review Two Draft Requests for Proposals: FY 2026/27 CDBG Capital Projects and FY 2026/27 and FY 2027/28 HOME Tenant-Based Rental Assistance
BACKGROUND
The City of Sunnyvale receives annual entitlement grants of Community Development Block Grant (CDBG) and Home Investment Partnerships Program (HOME) funds from the U.S. Department of Housing and Urban Development (HUD), as well as “program income” from loan repayments. As such, the City solicits proposals from local organizations to use a portion of these funds to provide eligible housing and community development services or projects to the Sunnyvale community.
The Requests for Proposals (RFP) describe the types of projects that are eligible for CDBG or HOME funding from the City and explains the City’s process for evaluating and scoring proposals, determining award amounts, and approval of the awards.
The City releases the CDBG Capital Projects and Economic Development Activities RFP every year.
The City releases the HOME tenant based rental assistance (TBRA) RFP every two years. Any existing or new rental assistance program operator is welcome to apply.
EXISTING POLICY
HOUSING ELEMENT
Goal H-5: EQUAL HOUSING OPPORTUNITIES AND SPECIAL NEEDS - Promote equal housing opportunities for all residents, including Sunnyvale’s special needs populations, so that residents can reside in the housing of their choice.
Policy H-5.6. Emergency Rental Assistance. Provide emergency rental assistance for residents in greatest need as a strategy for preventing homelessness.
Policy H-5.11. Housing for Persons with Disabilities. Continue to address the special needs of persons with disabilities through the provision of supportive housing, accessibility grants, and procedures for reasonable accommodation.
Policy H-5.13. Housing and Services to Address Homelessness. Participate in the County Collaborative on Affordable Housing and Homeless Issues to support its efforts to prevent and end homelessness. Facilitate and sponsor the provision of permanent supportive housing for homeless people. Support local service providers that offer facilities and support services to homeless individuals and families, and persons at risk of homelessness.
Council Strategic Goal #4: A model to prevent homelessness, prioritize new housing and support the unhoused community.
Council Policy Manual:
Policy 2.3.3 Strategies for Affordable Housing and the Use of Housing Mitigation Fees
5.0 Long-term Advocacy Positions - Socio-Economic
• 5.4 Health and Social Services
(3) Support the Food Stamp Program, the School Breakfast and Lunch Program, the WIC Program, senior nutrition programs, and support services for homeless families.
• 5.6 Affordable Housing and Homelessness
2025 Priority Advocacy Issues:
• 5. Affordable Housing, Homelessness, and Land Use
ENVIRONMENTAL REVIEW
N/A
DISCUSSION
The City anticipates receiving a CDBG grant of approximately $1.0 million and a HOME grant of approximately $350,000 from HUD, subject to federal appropriations for Program Year 2026, which are not expected to be shared with the City until mid-May 2026.
The RFPs that the City will issue in January are as follows:
- FY 2026/27 CDBG Capital Projects & Economic Development Activities, in the amount of approximately $700,000
- FY 2026/27 and FY 2027/28 HOME Tenant Based Rental Assistance (TBRA) administrator in the amount $2,000,000 ($1,000,000 each year in tenant subsidies). These funds represent a collection of Program Income, and the Entitlement Grant, and are paired with an additional $700,000 ($350,000 each year) of Housing Successor Agency funds and Housing Mitigation Funds for program administration costs.
The actual funding available for FY 2026 may be higher or lower than current estimates, depending on federal appropriations and the amount of program income the City receives during the rest of the year. Staff will have a more accurate estimate in Spring 2026.
CDBG Eligible Activities
Applications related to the 2026/27 CDBG Capital Projects & Economic Development Activities RFP include various acceptable program types eligible for CDBG funding. The most common types of capital project applications include, but are not limited to, the acquisition, pre-development, rehabilitation, or construction of affordable housing properties. The City has funded several affordable housing development projects in the past, but with the rising cost of development and the slow decrease in CDBG funding, this type of application has become rare because the amount of funds available contribute to only a small fraction of the total costs needed.
Economic development activities contain common and special activity types. Common economic development activities include, but are not limited to:
- providing credit for establishment/stabilization/expansion of microenterprises,
- providing technical assistance or business support to owners of microenterprises, or
- providing general support to owners of microenterprises including counseling, childcare, transportation, or other services.
Additionally, eligible special economic development activities come in three forms:
- Acquisition, construction, reconstruction, rehab or installation of commercial or industrial buildings, by recipient, or public or private nonprofit subrecipients
- Assistance to a private for-profit business including but not limited to grants, loan guarantees, interest supplements, technical assistance, and other forms of support
- Economic development services including but not limited to outreach efforts to market assistance, screening of applicants, reviewing and underwriting applications, preparation of agreements, management of activities, and the screening, referral, and placement of applicants for employment opportunities generated by CDBG-eligible activities, including costs of providing training
Lastly, eligible Community Based Development Organizations (CBDO), typically certified by HUD or the state, can apply for a special activity:
- Community economic development activities that increase economic opportunity or that stimulate or retain businesses or permanent jobs
HOME Eligible Activities
Unlike CDBG applications, the available HOME funding is for only one type of program, a Tenant Based Rental Assistance program. This type of program must use all HOME funding for the rental assistance, security deposit, and utility allowance of a program participant, who must be at risk of or experiencing homelessness, have a verified household income of less than 50% Area Median Income (AMI), and can show proof of Sunnyvale affiliation by living, working, or attending school in the City.
Program participants are assisted with their housing search, and their rent is structured so that a participant’s share of rent equals 30% of their most recent income certification. Participants have their income recertified after one year in the program and whenever their income changes.
The program will assist 35-40 participants at a time, providing rental assistance for two years. Programs are most successful when case management services are provided, consisting of career counseling and barrier removal to the workforce so that participants become self-sufficient by the end of the program.
The City expects to release the RFP on January 7, 2026. All dates are subject to change.
FISCAL IMPACT
There is no cost or financial impact related to approving these documents, however, the release of annual funding allows these federal funds to be expended, necessary to meet HUD timeliness requirements.
PUBLIC CONTACT
Public contact was made by posting the meeting agenda on the City's official-notice bulletin board at City Hall. In addition, the agenda and this report are available at the City Hall reception desk located on the first floor of City Hall at 456 W. Olive Avenue (during normal business hours), and on the City's website.
RECOMMENDATION
Recommendation
Review the Two Draft Requests for Proposals for FY 2026/27 CDBG Capital Projects and FY 2026/27 and FY 2027/28 HOME Tenant-Based Rental Assistance
JUSTIFICATION FOR RECOMMENDATION
A formal vote on any suggested changes is not required, as these are administrative documents. This RFP review is the final opportunity for the HHSC to make recommended changes to staff prior to it being released.
Levine Act
LEVINE ACT
The Levine Act (Gov. Code Section 84308) prohibits city officials from participating in certain decisions regarding licenses, permits, and other entitlements for use if the official has received a campaign contribution of more than $500 from a party, participant, or agent of a party or participant in the previous 12 months. The Levine Act is intended to prevent financial influence on decisions that affect specific, identifiable persons or participants. For more information see the Fair Political Practices Commission website: www.fppc.ca.gov/learn/pay-to-play-limits-and-prohibitions.html
An “X” in the checklist below indicates that the action being considered falls under a Levine Act category or exemption:
SUBJECT TO THE LEVINE ACT
___ Land development entitlements
___ Other permit, license, or entitlement for use
___ Contract or franchise
EXEMPT FROM THE LEVINE ACT
___ Competitively bid contract*
___ Labor or personal employment contract
___ Contract under $50,000 or non-fiscal
___ Contract between public agencies
_X_ General policy and legislative actions
* "Competitively bid" means a contract that must be awarded to the lowest responsive and responsible bidder.
Staff
Prepared by: Matthew Hazel, Housing Programs Analyst
Reviewed by: Amanda Sztoltz, Housing Officer
Approved by: Trudi Ryan, Director of Community Development
ATTACHMENTS
1. CDBG FY 2026/27 Capital Projects RFP
2. HOME FY 2026/27 and 2027/28 Tenant Based Rental Assistance