Report Prepared by: Kimberly Nutt, Housing Program Supervisor, Housing Division/ Development Services Department
Title
SUBJECT: Public Hearing - Introduction and Review of the Draft U.S. Department of Housing and Urban Development (HUD) 2025-2029 Five Year Consolidated Plan and 2025 First Year Annual Action Plan; and Receipt of Public Comment for the Public Hearing
REPORT IN BRIEF
Presentation and discussion of the HUD 2025-2029 Consolidated Plan and 2025 First-Year Annual Action Plan; and Opportunity for Public Participation and Comment.
RECOMMENDATION
City Council -
A. Conduct a public hearing to receive public input regarding the preliminary draft of the 2025-2029 Five Year Consolidated Plan and 2025 First Year Annual Action Plan document; and,
B. Provide comment, if any, on the recommended distribution of five-year goals, objectives, and priorities as determined by the needs assessment outreach conducted to-date.
Body
ALTERNATIVES
No Council Motion or Approval is necessary for this item.
AUTHORITY
The U.S. Department of Housing and Urban Development (HUD) requirements for Consolidated Submissions for Community Planning and Development Programs (24 CFR Part 91); and, the Charter of the City of Merced, Sections 405,409, and 411 et seq.
CITY COUNCIL PRIORITIES
As provided for in the 2024/25 Adopted Budget; and the 2024/25 Council Priorities regarding Quality of Life, Economic Development, Public Safety, Community Investment, and others that can be addressed through HUD funding.
DISCUSSION
The Housing Division is requesting that Council hold a Public Hearing to provide the community an opportunity to comment on the preliminary draft of the 2025-2029 Five Year Consolidated Plan/Strategic Plan and the 2025 First Year Annual Action Plan.
The preliminary draft of the plan is provided with this report at Attachment 3. Work on the plan continues, so what is being provided as this “first look” draft is subject to further changes and updates as work progresses to finalization later this spring.
Staff welcomes Council comment on any of the recommended five-year priorities, goals, and objectives that have been determined following extensive community needs assessment efforts with the community and stakeholders.
Comments and any guidance provided will be summarized and incorporated into the final draft of the plan documents that will be presented to Council for approval later this year at the Second/Final Public Hearing, which is tentatively scheduled on May 5, 2025.
What is a Consolidated Plan?
The Consolidated Plan (or “Con Plan”) is a five-year planning document that identifies needs within households and communities with low to moderate incomes and outlines how the City will address those needs using HUD-issued funds it receives over the five-year period.
Ultimately, the Consolidated Plan guides the annual investments of the issued HUD funds and helps achieve HUD’s mission of providing decent housing, suitable living environments, and expanded economic opportunities for populations and communities with low to moderate incomes.
The Consolidated Plan, and each ensuing Annual Action Plan, serves as the City’s official application to HUD for the following federal grant resources:
• Community Development Block Grants (CDBG) - CDBG is a flexible funding source that can be used for both housing and non-housing activities, including neighborhood revitalization, workforce and economic development, community and nonprofit facilities, and infrastructure and public services in communities that serve residents with low to moderate incomes. The City anticipates receiving approximately $1,000,000 annually in CDBG funds during the Consolidated Plan period.
• HOME Investment Partnerships (HOME) - HOME is used for building, acquiring, and rehabilitating affordable housing for rent and homeownership. It may also be used for direct rental assistance to residents with low incomes. The City anticipates receiving approximately $480,000 annually in HOME funds during the Consolidated Plan period.
The Con Plan is divided into five major parts:
1. The Process - these are sections marked “PR” and summarize the City’s efforts to engage residents and stakeholders and determine the community’s priorities.
2. Needs Assessment - these are sections marked “NA“ and identify the priority needs of the City’s populations with low to moderate incomes.
3. Housing Market Analysis - these are sections marked “MA“ and describe the economic environment in which the City will implement its programs.
4. Strategic Plan - these are sections marked “SP” and establish the goals, policies, and actions for addressing the needs of the community.
5. First Year Annual Action Plan - these are sections marked “AP” - and which may look the most familiar - and carry out the first year of the five-year strategic plan. In it, there will later be much more detail about the projects and programs that the City plans to carry out during the program year spanning July 1, 2025, to June 30, 2026.
Draft Goals and Objectives for the 2025-2029 Consolidated Plan Period
Draft Goals
The draft goals and priorities for the 2025-2029 Consolidated Plan are based on community and stakeholder feedback received through meetings and surveys, U.S. Census Bureau data, City and County housing data, and a variety of City and County planning documents.
Through preparing the Needs Assessment and conducting comprehensive community engagement, the following goals have been preliminarily established in the draft plan:
1. Enhance housing opportunities by increasing the availability of affordable housing options and improving the efficiency and cost-effectiveness of existing housing.
2. Promote housing stability for the city’s most vulnerable residents by supporting a range of programs and services that address needs across the housing spectrum, from emergency to permanent housing.
3. Improve quality of life throughout communities by improving and expanding access to essential services, community infrastructure, and economic development opportunities.
4. Address housing inequalities by offering fair housing services to residents of Merced.
These goals reflect the diverse priorities identified through the community engagement and development process of the City’s Consolidated Plan. They are also guided by HUD’s SMART framework, insuring they are Specific, Measurable, Action-Oriented, Realistic, and Time-Based.
Draft Objectives for Housing, Homelessness, and Quality of Life
Through preparing the Needs Assessment and conducting a comprehensive community engagement process, the following key needs were identified:
Housing:
• Increase the housing inventory across all income levels, with a particular focus on long-term affordable housing and housing for vulnerable populations.
• Services that increase housing stability including home repairs, rapid rehousing, short term and long term rental assistance, utility assistance, and food security programs.
• Development of new affordable housing units, prioritizing seniors, individuals with disabilities, or other households more vulnerable to housing instability.
• Support to purchase and maintain homes, including financial assistance programs, homebuyer education, and home repair programs to help residents achieve and sustain homeownership.
• Explore alternative development models, such as the subsidy of Accessory Dwelling Units (ADUs) or mixed-use affordable housing.
Homelessness:
• Prevention services that link people to resources, including rapid rehousing and mental and behavioral health services.
• Expansion of emergency housing programs, including rapid rehousing, short-term emergency rental assistance, and shelters.
• Supportive services such as mental or behavioral health services and substance abuse treatment both for those experiencing homelessness and those in permanent supportive housing.
Quality of Life:
• Investment in community programs and centers to support seniors, youth, and families, particularly in South Merced.
• Increase and improve pedestrian walkways and bikeways, especially in South Merced and areas with large investments in affordable housing, to better connect households to work centers.
• Support for vulnerable populations through public services like nutrition assistance, physical, mental, behavioral health services, general healthcare, childcare, job training, and support for young adults transitioning from foster care.
• Invest in streetlighting, parks improvements, ADA compliant sidewalks, and other such public infrastructure, especially in South and Central Merced or other areas of high low to moderate income concentration.
• Investment in job training and education programs in industries of growth.
Requirements Guiding the Citizen Participation Process:
Public input essentially maps and navigates the direction allocated funds will travel over the next five years to accomplish the goals and priorities established from needs assessment efforts.
The City has an adopted Citizen Participation Plan (CPP), last amended in 2020, which HUD requires per 24 CFR Part 91 as part of the overall requirements of the Consolidated Plan development process and the resulting annual grant disbursement.
The adopted CPP contains the “instructions” for how the City has said it will conduct outreach efforts aimed to solicit the input of residents and stakeholders in the development of all HUD-related plans and annual reporting documents, as well as how it will solicit collaborative partnerships with local non-profit organizations and other agencies most oftentimes necessary to carry out the Con Plan goals and priorities and address the community needs that have been determined.
The current CPP requires that the City hold a minimum of two community meetings during the development of the Con Plan to gather public input to identify the needs and priorities of the low to moderate income community. Additionally, the City is required to consult with community stakeholders in focus groups to gather further input as to the needs of the community from their various areas of expertise, including the areas of homelessness and public housing. Housing staff also uses the annual City Council Town Hall meetings, typically held in neighborhood districts, to gather input from neighborhood residents who speak about the needs of their specific areas of town.
The City is required to publish public notices in English, Spanish, and Hmong informing residents of the public hearing dates and public review and comment periods that will be held to provide citizens the opportunity to participate in this process.
Up to this point in the process, all CPP requirements have been met. A 30-day Public Review and Comment Period will be held beginning February 19, 2025, and will extend through March 20, 2025, during which time the public can view and submit written comment on a draft of the Consolidated Plan/Strategic Plan and First Year Annual Action Plan. A third community input meeting is planned to be held virtually via Zoom on February 25, 2025, to answer any questions about the drafts and to record public comment for inclusion in the plan.
At this stage in the development of the 2025 Annual Action Plan, a list of potential projects for the coming year is not possible, as the Housing Division is currently conducting the community non-profit funding application process (also known as Notice of Funding Opportunity, or “NOFO”). Mandatory information meetings were conducted on January 29 and 30, 2025, and applications are due by February 21, 2025.
Consultant Information:
The amount of time, analysis, research, data-gathering, and expertise necessary to coordinate and prepare the Con Plan warranted the need to enlist the services of a qualified consultant to assist the Housing Division with this process. After a proposal solicitation process to locate a suitable consultant, the City contracted with RSG Solutions in November 2024. RSG has extensive experience working with over 100 cities and counties each year to build and implement strategies around housing and economic development and has previously been a key partner with the City of Merced, assisting with various housing programs and projects such as Housing Successor Agency, property disposition, and development of pro-housing policies.
IMPACT ON CITY RESOURCES
No budget adjustment or appropriation is needed at this time.
Nationwide, HUD has historically announced its annual CDBG and HOME allocations between the months of February to March - however, in at least the last two program years, announcements have been made as late as May. HUD’s calculation of allocations is dependent upon the timing and actions the U.S. Congress takes in appropriating and approving funding to all federal assistance grant programs and departments of the federal government.
Given the changes and recent occurrences within the Federal system so far this calendar year related to the new administration, Housing staff anticipates another year of late allocations. Therefore, the 2025 Annual Action Plan will be prepared using estimated amounts, with contingency planning for high/low actual allocations, in order to continue and keep the plan preparation on schedule.
As the annual non-profit organization funding application process has not yet been completed, and further involves screening out any ineligible projects and scoring those that are potentially eligible, a preliminary project list for the 2025 program year is not yet available.
ATTACHMENTS
1. Analysis - Community Feedback
2. Analysis - Stakeholder Feedback
3. Preliminary Draft - 2025-29 Consolidated Plan/2025 Annual Action Plan
4. Presentation