REPORT TO THE CITY COUNCIL FROM: JENNIFER CLARK, AICP, Director Planning and Development Department PHILIP SKEI, Assistant Director Planning and Development Department BY: JENNIFER DAVIS, Senior Management Analyst Housing Finance Division, Planning and Development Department SUBJECT ..Title ***RESOLUTION - Authorizing application for and acceptance of funding from the United States Department of Housing and Urban Development's FY26 Pathways to Removing Obstacles to Housing Grant Program to fund the development of affordable housing and authorizing the City Manager or designee to sign all necessary implementing documents (Subject to Mayor's Veto) ..Body RECOMMENDATION Staff recommends the City Council adopt a Resolution authorizing application for and acceptance of funding from the United States Department of Housing and Urban Development's (HUD) FY26 Pathways to Removing Obstacles to Housing (PRO Housing) Grant Program to fund the development of affordable housing and authorizing the City Manager or designee to sign all necessary implementing documents. EXECUTIVE SUMMARY The United States Department of Housing and Urban Development (HUD) issued a Notice of Funding Opportunity (NOFO) on June 3, 2026, pursuant to its FY26 Pathways to Removing Obstacles to Housing (PRO Housing) competitive grants program. HUD is authorized to provide funding to state and local governments, multijurisdictional entities, and metropolitan planning organizations under the PRO Housing Program, pursuant to the Consolidated Appropriations Act, 2026, using the Community Development Block Grant (CDBG) framework, providing $50 million for competitive grant funding to help communities reduce regulatory barriers to affordable housing production and preservation and increase housing affordability. As an eligible entity, the City intends to apply for PRO Housing Program grant funding for up to $10 million to be used for the new construction of an affordable, scattered site mixed-income development providing both rental and ownership opportunities, which are eligible activities, in Chinatown. The mixed-income housing units will be developed on City owned property and/or property owned by the Housing Successor to the Redevelopment Agency of the City of Fresno. The project meets HUD's national objectives of at least 51% of the units benefiting low- and moderate-income (LMI) persons earning up to 80% Area Median Income (AMI), while meeting an urgent need for housing in an Opportunity Zone. If awarded, the HUD PRO Housing Program grant will provide gap funding for the new construction of high-quality affordable housing, thereby significantly increasing the housing availability and redevelopment of Chinatown. BACKGROUND The United States Department of Housing and Urban Development's (HUD) Pathways to Removing Obstacles to Housing (PRO Housing) Grant Program was established through the federal Consolidated Appropriations Act, 2026, which provided $50 million for competitive grant funding for state and local governments, multijurisdictional entities, and metropolitan planning organizations, using the Community Development Block Grant (CDBG) framework. The PRO Housing Program rewards communities that have taken steps to remove regulatory barriers to building and preserving homes by providing funding to further expand affordable housing, especially in areas with an acute need for affordable housing for low- to moderate-income (LMI) households earning up to 80% Area Median Income (AMI). On June 3, 2026, HUD issued a Notice of Funding Opportunity (NOFO) inviting eligible applicants to apply for funding no later than August 3, 2026. The City is an eligible entity and intends to apply for PRO Housing Program funding in the amount up to $10 million to facilitate affordable housing production and redevelopment with a priority to serve low- and moderate-income (LMI) households in Downtown Fresno's Chinatown District. If awarded, PRO Housing Program funding will enable the City to meet affordable housing priority recommendations set forth in the "One Fresno Housing Strategy" by offsetting the costs to thoroughly address the City's critical need for housing affordable to low- and moderate-income (LMI) households in Opportunity Zones. The City's proposal includes PRO Housing Program funding that will allow the City to prioritize the use of federal funds through gap funding for the development of approximately 100 new units of affordable rental and ownership housing in Chinatown. The affordable, scattered site mixed-income housing units will be developed on City owned property and/or property owned by the Housing Successor to the Redevelopment Agency of the City of Fresno. The project meets HUD's national objectives of at least 51% of the units benefiting low- and moderate-income (LMI) persons earning up to 80% Area Median Income (AMI), while meeting an urgent need for housing in an Opportunity Zone. The project not only seeks to alleviate the housing crisis in Fresno but also aspires to invigorate the surrounding neighborhood, contributing to the economic and social revitalization of the Chinatown District. By creating high-quality housing that meets the needs of diverse families, the project will serve as a model for future developments in the area. Providing authorization to finalize and submit a PRO Housing Program application for grant funding in an amount up to $10 million will support the production of affordable housing specifically in the Chinatown District. The activities included in the City's PRO Housing Program grant application will assist in bringing the City closer to meeting the housing goals and objectives as outlined in the "One Fresno Housing Strategy" by addressing high-priority local housing needs, supporting economic development through the creation of new affordable housing units, and promoting infill development and infrastructure improvements within a Downtown Opportunity Zone. Securing a PRO Housing Program grant will provide essential gap funding for housing development, enabling the City to make significant strides in addressing the affordable housing crisis, while delivering immediate and long-term relief to the community through the creation of new affordable housing. The funds will not only assist in creating affordable housing units but will also support the broader goal of fostering inclusive and equitable growth in Downtown Fresno's Chinatown District. ENVIRONMENTAL FINDINGS This item is not subject to the California Environmental Quality Act (CEQA) at this time. Appropriate CEQA and NEPA environmental documents will be prepared for the funded activities implemented during the City's administration of any awarded PRO Housing Grant Program funds. LOCAL PREFERENCE Local preference is not applicable as the Resolution supports a federal funding application and does not involve public contracting or bidding. FISCAL IMPACT There is no impact on the City's General Fund as a result of this action. If awarded, funding for the project will be provided through the United States Department of Housing and Urban Development's (HUD) FY26 Pathways to Removing Obstacles to Housing (PRO Housing) Grant Program awarded to the City of Fresno. Attachment: Resolution Authorizing Application to HUD FY26 PRO Housing Grant Program