Sunnyvale adopts HUD consolidated plan and 2025–26 action plan; council reallocates CDBG funding amid federal uncertainty

Sunnyvale City Council voted unanimously May 6 to adopt the city’s draft 2025–2030 HUD Consolidated Plan and the draft fiscal year 2025–26 HUD Action Plan, approving a package of local program funding and instructing staff to return with options should federal funds be reduced.

The five‑year Consolidated Plan and one‑year Action Plan guide how the city will use anticipated HUD entitlement funds — primarily CDBG (Community Development Block Grant) and HOME — for affordable housing, homelessness response and community development. During the meeting staff estimated Sunnyvale’s CDBG entitlement at roughly $1.0 million and HOME at about $400,000 based on prior allocations; HUD’s formal allocations for 2025–26 were then pending.

Why it matters: the Consolidated Plan sets policy priorities for the next five years and the Action Plan programs funds immediately available; the council’s vote also contained a directed funding mix that reflects local priorities and a contingency posture in case of federal budget cuts.

Root Policy consultant Heidi Agler presented the Consolidated Plan analysis and summarized resident and stakeholder engagement, which emphasized rental affordability, rental assistance, homeownership support, and services for special‑needs populations including survivors of domestic violence, seniors, and people with disabilities. Agler said a rental gap analysis showed a shortage of units affordable to households earning below $75,000 annually.

Homeless services manager Stults and other staff outlined the draft 2025–26 action plan and the city’s funding estimate, noting a portion of unspent CDBG‑CV funds (from the 2019 CDBG‑CV allocation) must be spent by July 2026. Staff also presented alternatives should HUD funding be eliminated or substantially reduced, including options to backfill affected programs with city funds and to return to council with a recommended funding strategy.

Public commenters, housing advocates and provider representatives urged full funding for locally delivered programs listed in the draft action plan. Sunnyvale Community Services asked council to preserve tenant‑based rental assistance (TBRA) and other safety‑net services. Downtown Streets Team described workforce outcomes for its WorkFirst program. Upwards (the Boost program) described a proposal to support licensed in‑home childcare providers through training, software and subsidies to expand capacity.

Council deliberations focused on program effectiveness and risk. Housing and Human Services Commission had recommended adjustments to staff allocations; commissioners and several council members debated funding a new Boost childcare pilot proposed by Upwards (a for‑profit nonprofit‑partnering program) against preserving existing programs that serve extremely low‑income residents.

Council member Mellinger offered a compromise motion that adopted the draft consolidated plan and the 2025–26 action plan with funding modifications: fully fund Sunnyvale Community Services’ requested allocation for safety‑net and housing assistance ($513,534), allocate $64,000 to Upwards’ Boost childcare pilot (a reduced pilot amount from staff’s original recommendation), and allocate $202,416 to the city’s Minor Home Repair program to meet rising demand from low‑income homeowners. The motion passed 7–0.

The council also directed staff to return if federal CDBG/HOME funds were eliminated or substantially reduced; staff had told council “substantially reduced” had not been formally defined and suggested a possible threshold of $300,000 or 30% as a discussion point. The council did not commit to a specific source of backfill funding at this meeting but asked staff to prepare options.

Clarifying details provided at the meeting: the city’s draft action plan included CDBG and HOME entitlement estimates, program income projections from loan repayments, and a 2019 CDBG‑CV unencumbered balance that must be spent by July 2026. Staff noted historic year‑to‑year declines in federal entitlement funding since COVID and said HUD was expected to announce final 2025 allocations imminently.

What’s next: staff will finalize the Action Plan to reflect HUD’s entitlement notifications, collect final invoicing and accounting for previously approved projects, and return with implementation details and follow‑up if HUD funding is reduced. Council requested quarterly reporting on funded programs’ outcomes and directed staff to return with any backfill recommendations if federal funding is lost or cut.

Ending: By adopting the Consolidated Plan and 2025–26 Action Plan, the council set the city’s HUD spending priorities for the next year and signaled willingness to pilot targeted childcare supports while protecting core safety‑net services for extremely low‑income residents.