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Commission reviews FY25'26 housing budget; staff reports healthy reserves and upcoming NOFA
Summary
Commissioners reviewed the housing-specific portions of the FY25'26 recommended budget, heard that the housing mitigation fund and BMR fund have healthy reserves, and were told a $16 million NOFA is planned for the next fiscal year. No action was required.
Commissioners reviewed the housing-specific portions of the recommended fiscal year 2025'6 budget at the May 28 meeting and heard staff say both the housing mitigation fund and the below-market-rate (BMR) fund have healthy reserves.
Jenny (housing officer, staff) briefed the commission that the housing mitigation fund had current reserves of about $26,000,000 and the BMR fund about $14,000,000. She told the commission Sunnyvale uses a 20-year planning horizon and aims to keep a prudent reserve (Jenny said she prefers not to drop below roughly $20,000,000) to weather revenue volatility. Staff said much of the housing mitigation revenue comes from office, retail and hotel development and has been quiet recently, while the BMR fund received a "fairly large lump sum" in the current year because of an alternative compliance payment.
Staff outlined that the city plans a combined notice of funding availability (NOFA) in the next fiscal year of approximately $16 million (a mix of housing mitigation and BMR funds), and that the city generally programs between $12 million and $16 million every other year for such funding rounds. Commissioners asked line-item questions about the revolving loan fund, home improvement program and tenant-based rental assistance (TBRA). Staff explained some amounts shown beyond 2026 are placeholders and that program income and timing can cause year-to-year fluctuations. For example, staff said an item labeled "revolving loan fund" shows smaller added-in amounts in future years due to HUD timeliness limits and prior balance management.
Commissioners also discussed federal allocations. Matt Hazel, housing analyst, provided a memo showing the city's confirmed HUD allocations for CDBG and HOME; staff said the city received its full CDBG and HOME allocations this year and that council modified the action plan to boost a specific program using HOME funds. Staff noted that HOME and HOME-ARP funds have been earmarked for TBRA and that TBRA funding is expected to carry the program for a limited number of years before a potential funding cliff.
No formal action was requested by staff; the commission asked clarifying questions and staff offered to supply the annual progress report and other documentation to commissioners. The item will proceed to the City Council budget hearings (June 3 and June 17) for consideration and adoption.
