REPORT TO COUNCIL
SUBJECT
Title
Adopt a Resolution Authorizing the Application for and Receipt of Prohousing Incentive Program Funds
Report
BACKGROUND
In 2019, Assembly Bill No. 101 established the Prohousing Designation Program (PDP) to provide incentives to jurisdictions that comply with housing laws and Housing Element requirements and have adopted local policies that facilitate housing production. The program is administered by the California Housing and Community Development Department (HCD), and jurisdictions awarded the Prohousing Designation receive a competitive advantage for critical affordable housing and infrastructure programs and the ability to apply for the Prohousing Incentive Program (PIP).
The PIP complements the PDP and is designed to encourage cities and counties to obtain the Prohousing Designation. The program is funded through Senate Bill No. 2 (2017, Atkins), which established the Building Homes and Jobs Trust Fund.
On December 10, 2024, City Council adopted a resolution authorizing the City’s application to the PIP (RTC No. 24-1160). However, the City did not meet the minimum threshold requirements at the time because it had not yet received the Prohousing Designation. On May 27, 2025, HCD issued an award letter announcing the City’s designation as a Prohousing Jurisdiction. As a result, the City is now eligible to apply for PIP funds.
On September 30, 2025, HCD released a PIP Notice of Funding Availability for an estimated $8 million in total funds. PIP applications must be submitted by March 31, 2026, along with an authorizing resolution (Attachment 1). Awards are tentatively scheduled to be announced in June 2026.
EXISTING POLICY
Sunnyvale General Plan
Housing Element
GOAL H-5: 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-5.13: 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.
Program H32. Programs to Address Homelessness. Continue to provide funding for programs that seek to prevent and end homelessness and provide supportive services to homeless and at-risk clients. Continue to implement programs such as WorkFirst Sunnyvale and Tenant-Based Rental Assistance. Using new funds such as Permanent Local Housing Allocation and HOME-ARP, create and fund new programs that support the City’s residents who are experiencing homeless or at risk of homelessness.
ENVIRONMENTAL REVIEW
The applying for and receiving of grant funds does not constitute a “project” within the meaning of the California Environmental Quality Act (“CEQA”) pursuant to CEQA Guidelines Sections 15060(c)(2), 15060(c)(3), or 15378 because there is no potential that it will result in a direct or reasonably foreseeable indirect physical change in the environment. Appropriate environmental review will be conducted for individual projects to which grant funds will be applied.
DISCUSSION
The PIP is intended to reward Prohousing-designated jurisdictions by providing additional grant funds for housing and homelessness-related projects and programs. The PIP awards funds based on jurisdiction size and the Prohousing Designation Program score. Eligible activities include predevelopment, development acquisition, rehabilitation and preservation of multifamily rental housing for low--income households, as well as unhoused services. No local match of funds is required for PIP.
Funding Amounts
Maximum PIP funding award amounts are determined based on jurisdiction population size and Prohousing Designation score. Based on the City’s population and Prohousing Designation score of 62, the City is eligible for a maximum PIP award of $1,250,000 (which far exceeds the amount allocated to the entire Bay Area).
HCD determines actual PIP funding awards by ranking each jurisdiction’s application by its Prohousing Designation score within its geographic region. If awarded, the City would be funded through the Bay Area region’s allocation of approximately $1,160,000. Once the regional funds are depleted, the City could receive funds from a set-aside allocation of $2,000,000 (this amount is also shared among many eligible jurisdictions). Jurisdictions that are receiving their first PIP award typically receive first priority for funding.
If awarded, PIP funds must be expended no later than June 30, 2029.
Recommended Use of Funds
The Housing Division assessed the City’s upcoming housing programs and projects to identify the most effective use of potential PIP funds. Based on eligible uses and the expenditure timeline, staff recommends allocating PIP funds for unhoused services.
The City is actively expanding its unhoused services and identifying sustainable funding sources for these efforts has been challenging. If awarded, the City would allocate this one-time funding to the program area(s) with the greatest need and impact. It is anticipated that this will be guided by the future adoption of a Strategy to Address Homelessness.
Eligible uses of PIP funds include, but are not limited to, Rapid Rehousing, rental assistance, navigation centers, emergency shelters, and new construction, rehabilitation, and preservation of permanent or transitional housing. For reference, the Prohousing Incentive Program Guidelines (Attachment 2) provide a full list of eligible uses for PIP funds.
Staff has prepared a PIP application (Attachment 3) allocating the City’s maximum award of $1,250,000 to homeless services. This purpose is consistent with eligible Use number 6: Assisting persons who are experiencing or at risk of homelessness, including providing rapid rehousing, rental assistance, navigation centers, emergency shelters, and the new construction, rehabilitation, and preservation of permanent and transitional housing.
FISCAL IMPACT
There is no fiscal impact directly associated with the application. If awarded, the City could receive up to $1,250,000 in PIP grant funding, and staff will return to Council for acceptance and appropriation of the funds.
PUBLIC CONTACT
Public contact was made by posting the Council meeting agenda on the City's official-notice bulletin board at City Hall, at the Sunnyvale Public Library and in the Department of Public Safety Lobby. 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
Adopt a Resolution Authorizing the Application for and Receipt of Prohousing Incentive Program Funds.
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 $250 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
_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: Lorena Lopez, Housing Specialist I
Reviewed by: Amanda Sztoltz, Housing Officer
Reviewed by: Trudi Ryan, Director of Community Development
Reviewed by: Dennis Jaw, Assistant Director of Finance
Reviewed by: Matthew Paulin, Director of Finance
Reviewed by: Connie Verceles, Deputy City Manager
Approved by: Tim Kirby, City Manager
ATTACHMENTS
1. Resolution Authorizing Application for and Receipt of Prohousing Incentive Program Funds
2. Prohousing Incentive Program Eligible Uses
3. Draft Prohousing Incentive Program Application