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Staff says housing trust fund revenues are limited by ordinance; local voucher and eviction‑prevention programs rely on transfers
Summary
City housing staff briefed council on the housing trust fund's revenue mix (general fund transfers, density bonus fee‑in‑lieu, interest) and on program uses including local housing vouchers and displacement prevention; several fee‑in‑lieu buckets are governed by ordinances that restrict spending to particular project types or geographies.
Deputy Director Mandy DeMaio briefed the council during the Nov. 19 special meeting on the housing trust fund's structure, long‑standing revenue sources, and how dollars are currently used.
DeMaio said the trust fund has three primary revenue sources: the annual general‑fund transfer, density‑bonus fee‑in‑lieu collections, and interest or miscellaneous revenue. "The general fund transfer has historically been the largest source, ranging in recent years around $9.7 million to $10.8 million," DeMaio said. She noted the fund was seeded about 25 years ago and that the city tracks projected pipeline fee‑in‑lieu receipts tied to development certificates of occupancy.
Staff emphasized that many fee‑in‑lieu buckets are governed by specific ordinances and must be used for prescribed capital or program purposes tied either to the geographic area that generated the revenue or to a defined program. DeMaio said the downtown density bonus fee‑in‑lieu, for example, is restricted to low‑barrier permanent supportive housing and cited Seabrook Square as a recent project funded from that bucket.
On program uses, DeMaio said recent general‑fund transfers have been directed more toward operating programs than capital: local housing vouchers (operating subsidies) and displacement prevention programs such as tenant stabilization, emergency rental assistance, eviction diversion and legal aid contracts. She said the city is funding operating subsidies for around 374 units with an anticipated cost of about $7.7 million in the current budget.
Council members asked whether declines in certain developer payments might reduce future fee‑in‑lieu receipts; staff said collections are realized only at certificate of occupancy and can lag application by multiple years. DeMaio said staff is coordinating with planning on a revamp of density‑bonus programs in response to new state legislation (SB 840) and that revised program recommendations are anticipated around May 2026.
Why it matters: Council expressed concern that a shrinking general‑fund transfer in coming years would make continued funding for eviction prevention and local voucher subsidies harder to sustain and discussed options including rethinking density bonus design and exploring other revenue sources. The manager and housing staff said they will continue to monitor pipeline receipts and present options in the coming months.
