Ojai council extends Habitat for Humanity MOU for tiny-home project, directs legal review on vacancy tax and housing fund

The Ojai City Council voted Dec. 2 to extend the memorandum of understanding (MOU) with Habitat for Humanity for a proposed tiny-home project at 408–410 North Montgomery Street and directed staff to return with recommendations to accelerate the project and to explore housing finance options.

Community Development Director Lucas Seibert told the council the MOU was originally adopted in 2024 and that the applicant seeks an extension because design review, permit milestones and federal HOME grant timelines extend beyond the current expiration. Seibert said the applicant's timeline anticipates breaking ground in April 2026 and final HOME program drawdowns no later than 2028.

Katie Norris, representing Habitat for Humanity, described the federal funding and NEPA requirements: “Our expenditure deadline is 2028; however, in order to enter into a contract with HUD, some things need to happen before 05/15/2026, one of which is a building permit.” She said Habitat would accept a more permanent ground lease but sought flexibility to pursue grant funding and to redesign for cost savings if needed.

Council members raised concerns that a three-year extension was longer than necessary and pressed staff about whether a ground lease or other permanent document should be in place prior to construction. Council member Whitman proposed a shorter extension with firm check-ins; after discussion the council agreed to a compromise: extend the MOU 180 days, require legal counsel to work with Habitat and return with recommendations within 150 days, and direct the city attorney's office to provide advice regarding a vacancy/second-residence tax or similar alternative housing revenue source and a housing/building fund.

Public commenters generally supported the project but urged prioritizing the lowest-income households and requested clarity on financing and project timelines. Speakers suggested the city consider pairing this work with exploration of a vacancy tax and a dedicated housing fund.

The motion passed on roll call with all five council members voting in favor.

Next steps assigned staff and legal counsel to work with Habitat for Humanity to identify items for continued representation (if any), to draft any ground-lease language or more permanent documents as appropriate, and to return to council within the 150-day check-in period with recommendations on how to accelerate construction and on vacancy-tax/building-fund options.