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Date: |
November 17, 2026 |
08 |
Title
Authorize Joint Application for Homekey+ Program and Application for Prohousing Incentive Program Funds (Districts: All)
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Overview
The County of San Diego (County) Health and Human Services Agency (HHSA) continues to pursue a variety of funding opportunities for housing programs to increase access to affordable and stable housing options for San Diego County residents.
On November 26, 2024, the California Department of Housing and Community Development (HCD), in collaboration with the California Department of Veterans Affairs, announced $2.1 billion of available funding for the Homekey+ program, a program that provides an opportunity for financial support to regional and local public entities to develop permanent supportive housing for veterans and people living with a behavioral health challenge, including mental health and/or substance use challenges, who are at-risk of or experiencing homelessness. Today’s action would authorize a joint application between the County and the Valley Creek LP, a California limited partnership that includes the San Diego Community Housing Corporation (SDCHC) and National Community Renaissance of California (National CORE), to the Homekey+ program for $9.9 million to support the 136-unit Valley Creek Apartments affordable housing development located in the City of Escondido on County property.
In alignment with these efforts, the County continues to pursue funding opportunities that expand access to homeownership. On October 13, 2026, HCD released the Prohousing Incentive Program (PIP) Round 5 Notice of Funding Availability (NOFA) to provide financial support to jurisdictions that adopt policies promoting housing development. Under PIP Round 5 NOFA, the County is eligible to apply for up to $1.5 million. If awarded, these funds would further enhance the County’s first-time homebuyer programs.
Today’s actions request that the San Diego County Board of Supervisors (Board) find that the proposed actions are exempt from the California Environmental Quality Act; adopt a resolution authorizing a joint application with Valley Creek LP and SDCHC and National CORE to HCD for up to $9.9 million in Homekey+ program funding; execute documents related to the award of Homekey+ program funding for the development; and direct the Auditor and Controller to establish a trust fund in relation to the Homekey+ program. Additionally, today’s actions request adoption of a resolution authorizing the County to apply for, and if awarded, accept Prohousing Incentive Program funds. This action supports the County’s Housing for All Initiative by further advancing efforts to promote housing stability and address root causes, through expanded access to affordable housing and supportive services.
Body
Recommendation by Chief Administrative Officer:
1) Find in accordance with Section 15060(c)(3) of the California Environmental Quality Act (CEQA) Guidelines, that the proposed actions described herein are administrative in nature and not a project as defined by the state CEQA Guidelines Section 15378(b)(5).
2) Adopt a Resolution entitled: A RESOLUTION OF THE BOARD OF SUPERVISORS OF THE COUNTY OF SAN DIEGO AUTHORIZING JOINT APPLICATION TO AND PARTICIPATION IN THE HOMEKEY+ PROGRAM.
3) Authorize the Deputy Chief Administrative Officer, Health and Human Services Agency, or designee, to, if awarded funds, accept funds and enter, upon successful negotiations, into a partnership agreement with Valley Creek LP, San Diego Community Housing Corporation, and National Community Renaissance of California, or an affiliate thereof, and into a Standard Agreement with the California Department of Housing and Community Development (HCD) for the administration of awarded Homekey+ funds up to $9.9 million.
4) Authorize the Deputy Chief Administrative Officer, Health and Human Services Agency, or designee to: execute agreements, amend agreements as needed to reflect changes to services and funding, execute certification forms, prepare and execute all necessary documents for the submittal, regulatory processing and implementation, and take any other actions necessary as required by HCD for Recommendation 3, as applicable.
5) Authorize and direct the Auditor and Controller to establish a trust fund in relation to the Homekey+ program grant for payment for Valley Creek multifamily rental housing development, with interest earnings allocated and distributed to the fund.
6) Adopt a Resolution entitled: A RESOLUTION OF THE BOARD OF SUPERVISORS OF THE COUNTY OF SAN DIEGO AUTHORIZING APPLICATION FOR, AND RECEIPT OF, PROHOUSING INCENTIVE PROGRAM FUNDS.
7) Authorize the Deputy Chief Administrative Officer, Health and Human Services Agency, or designee, to negotiate and execute all contracts, related documents and/or amendments, and to take all necessary actions for the administration and implementation of the Prohousing Incentive Program.
8) Authorize the Deputy Chief Administrative Officer, Health and Human Services Agency, or designee, if awarded funds, to execute the State’s Standard Agreement for acceptance of the grant funds of up to $1.5 million, any amendment thereto, and any related documents necessary for the County of San Diego’s continued participation in the Prohousing Incentive Program.
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Equity Impact Statement
The 2026 Point-in-Time Count (PITC) identified 9,803 individuals as living on the streets or in shelters throughout the county. In January 2026, there were approximately 359 unsheltered Veterans and 289 sheltered Veterans in the region. A 2023 study by the Journal of American Medical Association Psychiatry showed that Veterans are at a higher risk of experiencing mental health challenges and substance use disorders, compared to the general population. Data from the 2026 PITC also shows that among unsheltered adults in San Deigo County who reported behavioral health conditions, 34% are experiencing mental illness and 25% are experiencing substance use disorders. This shows the strong need for integrated housing and behavioral health interventions to better serve this vulnerable population. The County of San Diego is committed to finding effective solutions to prevent and end homelessness by offering supportive services and permanent supportive housing options.
As these challenges persist, broader housing pressures in the region further heighten instability for many households. With the median cost of a home in San Diego approaching $1 million (Redfin, 2026), homeownership has become increasingly unattainable for first-time homebuyers, particularly low and moderate-income families. Limited entry-level inventory and significant upfront costs create additional obstacles for those seeking long-term stability through homeownership. These conditions highlight the need to expand affordable pathways to homeownership and provide financial assistance that supports equitable access.
Sustainability Impact Statement
Today’s proposed actions support the County of San Diego’s Sustainability Goal #2 by promoting just and equitable access to housing and Goal #4 to protect the health and well-being of residents. Homekey+ efforts ensure that affordable housing developments are reserved for individuals and families experiencing homelessness or chronic homelessness. Prohousing Incentive Program efforts further advance these goals by expanding access to affordable homeownership for low- and moderate-income households. By reducing upfront costs and helping families establish long-term housing stability, PIP funding supports more equitable homeownership opportunities and strengthens the resilience of neighborhoods across the region.
Fiscal Impact
Recommendation 1
There is no fiscal impact associated with Recommendation 1. There will be no change in net General Fund costs and no additional staff years.
Recommendation 2-5
Funds for this request are not included in the Fiscal Year (FY) 2026-28 Operational Plan for the Health and Human Services Agency. If approved and awarded, this request will result in one-time costs and revenue of up to $9.9 million in FY 2026-27 for the Valley Creek Apartments affordable housing development. The funding source is State allocated funding from the Homekey+ Program. Upon award of Homekey+ grant of up to $9.9 million. Staff will return to the San Diego County Board of Supervisors with requests for approval of mid-year actions to adjust the budget if necessary. At this time, there will be no change in net General Fund costs and no additional staff years.
Recommendations 6-8
Funds for this request are not included in the Fiscal Year (FY) 2026-28 Operational Plan for the Health and Human Services Agency. If approved and awarded, there will be no costs and revenue in FY 2026-27 and estimated one-time costs and revenue of up to $1.5 million in FY 2027-28 for first time homebuyer programs. The funding source is the State of California Department of Housing and Community Development’s Prohousing Incentive Program. Funds for subsequent years will be incorporated into future operational plans. At this time, there will be no change in net General Fund costs and no additional staff years.
Business Impact Statement
The Homekey+ proposal will have a positive impact on the business community, since the recommended actions will result in construction work to be performed at the property that is awarded funding. Contracts resulting from these recommendations may be executed with private sector firms and will involve a competitive bidding process. The Prohousing Incentive Program funds, if awarded, are estimated to generate up to 10 real estate sales, through the County of San Diego’s first-time homebuyer programs. This positively impacts housing industry professionals involved with real estate transactions.
Advisory Board Statement
N/A
Background
The County of San Diego (County) administers a variety of housing programs to increase access to affordable and stable housing options for San Diego County residents. One program that supports expanding affordable housing is the Homekey+ Program, an initiative of the California Department of Housing and Community Development (HCD) in collaboration with the California Department of Veterans Affairs (CalVet) stemming from Proposition 1, which was approved by California voters in March 2024. On November 26, 2024, HCD, in partnership with CalVet, announced the availability of $2.1 billion in funds from the Homekey+ program.
Homekey+ provides an opportunity for regional and local public entities to develop permanent supportive housing for Veterans and people living with a behavioral health challenge, including mental health and/or substance use challenges, who are at-risk of or experiencing homelessness. This program advances the State objective of reducing homelessness and safeguarding vulnerable populations through changes to the Mental Health Services Act. Eligible applicants include cities, counties, regional and local public agencies including Public Housing Authorities who may apply independently or jointly with a development partner. HCD is accepting applications on a rolling basis until all funding is awarded to eligible developments. The County continues to expand housing opportunities and partnerships, this being the fifth Homekey+ partnership in the region. Two developments are nearing completion, and two applications are under review with HCD.
The County, as an eligible applicant, is partnering with SDCHC, National CORE, and Valley Creek LP to apply for up to $9.9 million in additional Homekey+ resources. This application, which requires no additional County dollars, builds on previous County investments into this development, including County-owned land. In September 2026, the County awarded $6 million from the Innovative Housing Trust Fund to support the Valley Creek Apartments development, supplementing the April 2025 award of 47 Project Based Vouchers (PBV) and 20 Veteran Affairs Supportive Housing PBVs. Homekey+ funding, $3 million from the City of Escondido, and the County’s previous commitments including funding, vouchers, and County land with a 99-year ground lease at a nominal fee, will facilitate the development of Valley Creek Apartments with 136 new units of affordable housing for seniors in the City of Escondido. Units will provide affordable housing for low-income seniors up to 60% of the Area Median Income, as well as units for unhoused senior Veterans.
Separately, the County administers the Down Payment Assistance (DPA) program, which expands homeownership opportunities for moderate-income households through low-interest, deferred payment loans. The program is currently supported by State of California Permanent Local Housing Allocation (PLHA) funds, and since 2023, the DPA program has helped 28 moderate-income households purchase a home. The County actively pursues funding sources that increase homeownership opportunities for low- and moderate-income residents. On October 13, 2026, the State of California announced Round 5 of the Prohousing Incentive Program (PIP), making approximately $8.0 million available to jurisdictions with a Prohousing Designation. Through a separate action in Fall 2026, staff will be seeking authority to renew the County’s Prohousing Designation. The County is eligible to apply for up to $1.5 million, which if awarded could support an additional 12 households with DPA. In accordance with Board Policy B-29, HHSA certifies that activities proposed for PIP funding are worthy of funding with County resources if external financing were unavailable. If awarded, these program funds will provide additional support to the County’s DPA program. In Round 1 of PIP funding, the County received $2.4 million, which was used to support a development, Brookview Senior Villas, providing 60 affordable units for low-income seniors in Fallbrook. The County applied for funding under PIP Rounds 2,3, and 4 but was not awarded since priority was given to jurisdictions who had not previously received PIP funding.
Under Board authority granted on March 24, 2026 (24), staff are authorized to submit applications for additional funding opportunities to support future housing or community development activities. Today’s actions request the Board to determine the proposed actions are not subject to California Environmental Quality Act; adopt a resolution authorizing a joint application with SDCHC, National CORE, and Valley Creek LP, authorize the Deputy Chief Administrative Officer, Health and Human Services Agency, or designee, to enter into an agreement with SDCHC, and National CORE, and Valley Creek LP and to take all actions as required by HCD for the Homekey+ program; direct the Auditor and Controller to establish a trust fund in relation to the Homekey+ program; and adopt a resolution to apply for and if awarded accept PIP Round 5 funding.
Environmental Statement
Section 15060(c)(3) of the California Environmental Quality Act (CEQA) Guidelines provides that activities identified in Section 15378 of the CEQA Guidelines are not subject to CEQA review. Section 15378(b)(5) provides that administrative activities of governments that will not result in a direct or indirect physical change in the environment are exempt from CEQA review. The proposed activity involves the adoption of a resolution authorizing a joint application submission to the California Housing and Community Development Division for Homekey+ Program funds, and authorization of a partnership agreement with SDCHC, National CORE and Valley Creek LP, to administer the Homekey Program+ funds, if awarded. Subsequent actions that may develop as a result of the partnership agreement will require subsequent environmental review by the applicable lead agency prior to acquisition, rehabilitation or construction activities, as appropriate, and pursuant to the state CEQA Guidelines. Therefore, the proposed actions are not subject to CEQA review, pursuant to Section 15060(c)(3) of the state CEQA Guidelines.
Linkage To The County Of San Diego Strategic Plan
Today’s action supports the County of San Diego 2026-31 Strategic Plan Initiatives of Sustainability (Economy and Resiliency), Equity (Housing and Economic Opportunity), and Community (Engagement, Quality of Life, and Partnership). Additionally, today’s actions support the regional Live Well San Diego vision of healthy, safe, and thriving communities and the Housing for All Initiative by supporting the development of safe and affordable housing for low-income households and improving the housing and service delivery system for individuals at risk of experiencing homelessness through collaborative solutions.
Respectfully submitted,
Ebony N. Shelton
Chief Administrative Officer
Attachment(s)
Attachment A- A RESOLUTION OF THE BOARD OF SUPERVISORS OF THE COUNTY OF SAN DIEGO AUTHORIZING JOINT APPLICATION TO AND PARTICIPATION IN THE HOMEKEY+ PROGRAM
Attachment B - A RESOLUTION OF THE BOARD OF SUPERVISORS OF THE COUNTY OF SAN DIEGO AUTHORIZING APPLICATION FOR, AND RECEIPT OF, PROHOUSING INCENTIVE PROGRAM FUNDS