Housing authority: HUD reserve cut puts local voucher program in 2026 shortfall

The Santa Rosa Housing Authority reported on July 27 that the Housing Choice Voucher program has been identified by HUD as being in a 2026 shortfall after HUD reduced HUD‑held reserves.

Executive Director Megan told commissioners that in early July HUD notified the authority of a reserve reduction that removed ‘‘about 1.26, almost 1,230,000 in HUD held reserves that HUD took back,’’ a change that has flagged the program as shortfall for 2026. Megan said staff immediately engaged HUD technical assistance and the authority’s federal lobbyists and has scheduled a meeting with HUD staff to appeal the reserve offset.

Megan said the authority is already implementing HUD shortfall requirements, including monthly meetings with HUD, not pulling households from the waiting list, not issuing requests for proposals for project‑based vouchers and pausing absorption of portability vouchers. She warned a potentially significant impact is an inability to absorb emergency housing vouchers; the authority currently supports 97 households with that funding, which ends in December 2026.

Commissioners asked whether reestablishing the reserves could require legal action. Megan said the immediate plan is to work with HUD on regulatory interpretation and implementation rather than file suit, and noted the authority also has administrative reserves that can be used to offset the HUD reduction while the appeal proceeds.

Public commenters urged the authority to pursue every available legal and administrative channel to restore funding and emphasized the connection between voucher funding and the development pipeline used to produce affordable housing.

The authority did not take a vote on a policy change at the meeting; staff said it will provide monthly updates as it pursues the HUD appeal and implements shortfall monitoring requirements.