Vacaville council hears ‘Foundations in Housing’ briefing on financing, RHNA and local tools

Tamara Colden, Vacaville’s housing and community services director, told the City Council on April 7 that affordable housing is governed by state and federal rules, financed through layered public and private sources, and that local policy and land strategies can make or break projects.

"Housing is not just a planning topic; it affects workforce access, economic growth and neighborhood stability," Colden said during a consolidated "Foundations in Housing" presentation. She framed the discussion around the Regional Housing Needs Allocation (RHNA) assigned to Vacaville for 2023–2031 — 2,595 units across income categories — and emphasized that RHNA measures planning capacity rather than city construction obligations.

Why it matters: Colden reviewed affordability thresholds and calculation methods tied to Area Median Income (AMI). She said Solano County’s 2025 AMI for a family of four is about $124,000 and used that figure to illustrate income bands for affordable housing programs. "Housing is considered affordable when a household spends no more than 30% of its gross income on housing costs," she said, adding that families spending more than 50% are severely cost‑burdened.

How housing is built and paid for: Colden outlined the typical development sequence — site control, feasibility and design, entitlement and environmental review (CEQA), financing, construction and lease‑up — and said most affordable projects take three to six years. She described the capital stack common to such projects: limited conventional debt; equity generated through the Low‑Income Housing Tax Credit (LIHTC) program; state and local gap financing (soft loans or grants); and operating subsidies such as project‑based vouchers.

"If one funding source is delayed or denied, the entire capital stack can collapse," Colden said, highlighting the competitive, cyclical nature of LIHTC and state grant rounds.

Local example and city role: Colden used Pony Express Apartments — a 60‑unit senior rental completed in 2023 on city‑owned land — to show how multiple partners and funding sources can deliver deeply affordable housing. According to staff, Pony Express’s development cost was a little over $28 million, 59 units were income‑restricted across AMI bands, 15 units provide permanent supportive housing, and the project was awarded 59 project‑based vouchers. The city contributed land (via a seller‑held loan) and a $500,000 pre‑development loan to help the project advance.

Funding outlook and constraints: Colden warned that recent state and federal budget proposals and the governor’s FY27 budget reduce many traditional sources of gap funding. She said HCD local assistance funding has dropped from prior peaks and that competition for remaining dollars will intensify statewide — a constraint that staff identified as the primary reason some Vacaville projects stall.

Council discussion and next steps: Council members pressed staff on concrete incentives the city could offer to make projects viable. Colden said the city already has zoning changes, city‑owned sites and a faster review path in some locations, but lacks a recurring local funding source such as a housing trust fund or an adopted inclusionary ordinance. The city manager and Colden described an intended next step: a consolidated RFP for multiple vacant city sites, packaged with targeted affordability requirements and reduced‑cost land to attract developers who can combine sites and financing to achieve scale.

"We can design an RFP that says: between these three sites we want X units at 30% AMI and Y units at 60% AMI; tell us how you will deliver that," Colden said.

Housing operations and vouchers: A housing authority representative explained how project‑based vouchers (PBVs) work: owners and housing authorities sign 20‑year contracts (renewable), voucher allocations are limited by the authority’s contract authority (ACC), and the authority must monitor monthly budgets to ensure it can honor Housing Assistance Payments (HAP) over the contract term.

Public comment and community projects: Public speakers urged action to expand local housing options. Staff updated the council on Habitat for Humanity’s Harmony Village (10 homeownership units on city land): the city contributed the site, roughly $300,000 in ARPA for pre‑development, nearly $400,000 in local housing allocation funds, and secured $250,000 in CPF funding; staff said they have a pending CPF application for approximately $1 million to complete the financing package.

What was not decided: The meeting was a study session and produced no formal votes. Council members expressed interest in pursuing one or more of the following: a consolidated RFP for city sites, additional analysis of incentives versus requirements (including a potential housing trust fund or inclusionary ordinance), and targeted outreach to better document what incentives make projects "pencil out." Staff said they would return with options and timelines.

Next steps: Staff plans to draft the consolidated RFP and return to council with options for local tools and a clearer scope for any inclusionary or trust‑fund proposals. No council action on policy or funding was taken at the session.