Title
Recommendation to Direct Staff to Explore Integrating the Housing Authority of the City of Alameda into the City of Alameda, or Other Models of Governance, in Order to Advance the City’s Supportive Housing Priorities. (City Manager 10021030)
Body
To: Honorable Mayor and Members of the City Council
From: Gerry Beaudin, City Manager
EXECUTIVE SUMMARY
The Housing Authority of the City of Alameda (AHA) is an important partner in providing affordable housing opportunities in Alameda. AHA administers federal rental assistance programs and participates in affordable housing development through affiliated entities and partnerships. The City of Alameda (City) also advances affordable housing through its land use authority, allocation of federal Community Development Block Grants, use of public property, infrastructure investments, and development partnerships.
Although the City and AHA share broad housing objectives, recent work on the Rebuilding Existing Supportive Housing at Alameda Point (RESHAP) Project has illustrated that AHA and the City differ in project priorities, federal housing assistance allocation plans, information-sharing practices, and the coordination of decisions affecting City-sponsored housing. City staff also seek clearer transparency into AHA’s governance, relationships between AHA and its affiliated development entities, budgets and financial condition.
Staff recommends that the City Council direct staff to explore integrating AHA’s functions into the City as a way to achieve greater alignment of the two agencies, and to consider other governance options as appropriate. This would be a multi-step process, with staff returning to City Council with a recommendation in early 2027.
BACKGROUND
AHA provides housing assistance to eligible households primarily through federally funded programs, including the administration of Housing Choice Vouchers and Project-Based Vouchers, related eligibility and compliance functions, and required inspections. AHA also participates in the development, ownership, and preservation of affordable housing through affiliated entities and development partnerships.
The City advances affordable housing through its Housing Element, development approvals, land and infrastructure resources, allocation of Community Development Block Grants (CDBG), support for local and state grant applications, and partnerships with housing providers. The City and AHA consequently have overlapping interests in the location, timing, financing, affordability, and delivery of housing projects. Their respective legal authorities and responsibilities, however, are different yet complementary, and do occasionally overlap. In 2022, the City eliminated AHA’s contract administration of the Rent Program and integrated the program into the City’s core functions, in part due to concerns about AHA’s administration of the program.
For the last ten years, the City and AHA have discussed the need for Project-Based Voucher (PBV) assistance for the RESHAP project, through a quarterly check-in meeting designed to align the two agencies’ housing priorities. This dialogue culminated this year in a conflict between the City and AHA when Stardust Gardens - the first phase of RESHAP - secured critical state funding and reached a point where a decision on PBVs was needed quickly. City staff engaged in numerous meetings with AHA staff throughout the year beginning in January to seek solutions, and attended the August, September, and October AHA Board of Commissioners meetings. During these interactions, staff observed the following challenges:
AHA and the City are not aligned in their funding priorities for affordable housing projects. The Five-Year Consolidated Plan, reviewed by the Social Services and Human Relations Board and approved by City Council, identifies priority affordable housing projects, and is the guiding document for both AHA and the City. However, it does not list the projects in order of priority and, as such, was not effective in guiding both agencies to identify RESHAP as a high-priority project for PBVs over the years. The City heard numerous reports from AHA that RESHAP would not be competitive for PBVs during the long-term discussions about RESHAP.
Moreover, in 2022, AHA was designated by the U.S. Department of Housing and Urban Development (HUD) as a “Moving to Work” Agency, a designation designed to provide high-functioning housing authorities with greater flexibility, with the goal of improving efficiency. With this designation, AHA has considerable leeway in how it sets its own rules for allocating funding. AHA’s self-published, Board-approved Administrative Plan allows AHA to skip a competitive process for its own projects, but does not allow this same flexibility for non-AHA projects, suggesting AHA’s own projects are a higher priority for funding allocation.
There is limited transparency regarding the rules and regulations governing voucher allocation by both AHA and HUD. Housing Authority regulations from HUD are complex, and guidance appears to be provided verbally by HUD staff. City staff attempted to engage directly with Region 9 HUD staff to request information on transferring vouchers from Alameda Point Collaborative units to Stardust Gardens. While HUD staff were receptive to a meeting and committed to looking into the request and responding, they did not return City staff’s numerous requests for a response. Subsequently, City staff were told by AHA and by the City’s own federal lobbyist (never confirmed directly by HUD staff) that AHA would interpret HUD regulations on HUD's behalf.
City staff requested written correspondence between AHA and HUD to better understand what had transpired following the City’s initial meeting with Region 9 staff and were provided with email records between AHA and HUD that were dedicated to scheduling meetings. It appears based on this experience that interpreting complex Federal rules and regulations is left to AHA, with limited written guidance from HUD. City staff has had routine difficulties understanding AHA’s interpretations of HUD regulations and securing specific written references to these regulations. Rather than AHA offering a variety of solutions to the RESHAP voucher issue, it has been left to City staff to make proposals for solutions without the benefit of deep knowledge of HUD regulations. The City’s attempts to explore these ideas with AHA have been interpreted by AHA staff as the City “changing its requests.” The City and AHA have not been able to find a path to collaborative communication and problem-solving.
The AHA Board of Commissioners is not provided with easy to understand or timely communications by AHA staff, limiting transparency to both the Board and the general public. The AHA Board of Commissioners (the Board) is appointed by the Mayor and approved by the City Council, with the exception of the Executive Director of AHA, who is the Board President. Unlike other appointed Boards in the City that either make recommendations to the City Council, or whose decisions can be appealed to the City Council, the AHA Board operates wholly independently of the City in its decision-making after appointments are made.
City staff have observed several concerning instances of the Board receiving information late, and either receiving an overwhelming amount of information or too little information to make an informed decision. For example:
• The August 19, 2026 special Board meeting agenda packet was posted and modified on August 19, which included a one-page staff report on the RESHAP voucher request, and a 54-slide presentation given at the meeting.
• The Board at the August 19 meeting directed staff to provide a more detailed forecast of AHA's 2027 Budget for the September 16 Board meeting. The report for the September 16 meeting was posted on September 11 and included a two-page staff report on this issue, followed by a nine-page supplemental memo, which was posted the morning of the meeting. City staff had been ready to conduct a full, thorough review of detailed budget information, given the Board's direction on August 19, but that information was not provided to the Board for its September 16 vote. The staff report and supplemental memo, together with the staff presentation, were the foundation for the Board vote to hold off on any competitive process and instead seek a waiver from HUD to transfer current vouchers from APC to RESHAP.
DISCUSSION
Given the complexity of HUD rules and regulations governing any housing authority’s activities, it is of the utmost importance that a housing authority makes every effort to clearly and succinctly interpret HUD regulations in a way that can be understood by the general public and other stakeholders, including City staff. This is particularly critical in the Bay Area given the dire need for affordable housing and the importance of government agencies remaining aligned to deliver housing as efficiently and quickly as possible.
Under its 2023-2031 Housing Element, the City aims to deliver 5,353 new housing units, including 1,421 units available to very low-income households. So far, the City has delivered 472 total units, of which 209 are very low-income units. The City and the Housing Authority must improve alignment and communication to accelerate housing delivery in Alameda. The City’s success in securing State Affordable Housing and Sustainable Communities and Multifamily Housing Program funds for Stardust Gardens was met with criticism and obstruction by AHA, including AHA making calls to the State of California questioning its grant decisions.
This delay in taking action on PBVs threatened to jeopardize the timeline for delivery of both Stardust Gardens and the 478-unit West Midway mixed-income development. The City was able to avoid a major delay in these housing projects by stepping in to commit up to $25.5 million in Alameda Point Base Reuse funds to fill the gap left by the lack of PBVs. This experience demonstrates the need for clearer coordination, shared priorities, and timely decision-making between the City and AHA.
Staff Recommendation
Staff recommends that the City Council direct staff to explore integrating AHA’s functions into the City as a way to achieve greater alignment in communications, priority setting, and housing project delivery across the two agencies, and to consider other governance options as appropriate. This would be a multi-step process, with staff returning to City Council with a recommendation in early 2027.
Approaches and recommendations will be evaluated based upon their efficacy in improving:
1. Alignment of housing priorities, voucher decisions, and development pipelines;
2. Transparency concerning organizational structure, budgets, financial condition, and decision-making;
3. Accountability to HUD, the City, and the public at large in all policy decisions;
4. Information-sharing and coordination across agencies and development partners; and
5. Supporting effective delivery of affordable housing by preserving AHA’s ability to administer housing assistance and exploring future options for AHA’s development functions to be consistent with the City’s priorities
Proposed Scope
Staff proposes retaining qualified professionals with experience in California and federal housing authority law, HUD programs, affordable housing development, public agency governance, and organizational and financial assessment. Staff recommend a three-stage assessment, returning to the City Council for separate decisions on each of the following stages:
1. Review the governance relationship between AHA and the City, in an effort that includes but is not limited to:
a. Understanding AHA’s governance, operations, development affiliates, budgets, financial relationships, and existing oversight and reporting mechanisms;
b. Clarifying the City’s and AHA’s respective authorities and regulatory obligations;
c. Identifying potential improvements and legally feasible organizational or governance approaches; and
d. Returning to City Council with a recommendation.
2. Determine the future of AHA’s development affiliates.
Staff seeks to evaluate the relationship of AHA as a grantor of funds, and AHA’s development affiliates as grantees, to understand how perceived conflicts of interest are managed and avoided. Specifically, staff would:
a. Evaluate the relationship of AHA’s funding allocation functions and development affiliates to understand the controls separating the flow of funds from one entity to another (i.e. do AHA staff involved in granting of funds benefit if AHA projects are awarded these funds? How is this controlled?);
b. Explore the effectiveness of AHA’s development affiliate model versus a traditional, independent nonprofit development model, and how AHA’s development affiliate function may be modified, if desired;
c. Return to City Council with a recommendation.
3. Determine the future of administrative functions held separately by AHA and the City.
Depending on the governance model endorsed by City Council in the first stage, staff would determine whether AHA’s human resources, finance, legal, and other administrative functions that also exist within the City should be merged with City departments or remain independent. To do this, staff would:
a. Evaluate the functions of these groups and how they are similar or different from the City’s functions;
b. Evaluate whether HUD regulations or other legal requirements may require separate or unique functions; and
c. Return to City Council with a recommendation.
To initiate this process, staff would seek participation stakeholders involved in AHA’s functions and mission, while maintaining a clear City-directed scope and independent professional analysis.
ALTERNATIVES
• Direct staff to refine the scope or approach and return to Council.
• Direct staff to explore a different alternative or alternatives. In this case, the City Council should provide clear direction on which alternative(s) should be explored.
• Do not direct staff to explore this action at this time.
FINANCIAL IMPACT
There is no fiscal impact associated with this action. Staff will conduct initial coordination and scoping using existing FY 2026-27 budget resources. If staff determines that additional funding is needed, such as for consultant services or other expenditures, a request will be brought to Council for separate consideration and approval.
MUNICIPAL CODE/POLICY DOCUMENT CROSS REFERENCE
City of Alameda 2023-2026 Strategic Plan priority: House All Alamedans and End Homelessness.
City of Alameda Housing Element, 2023-2031
City of Alameda Five-Year Consolidated Plan, 2025-2029
ENVIRONMENTAL REVIEW
This action does not constitute a “project” as defined in California Environmental Quality Act (CEQA) Guidelines Section 15378 and therefore no further CEQA analysis is required.
CLIMATE IMPACT
The proposed assessment would have no direct climate impact. Any future actions resulting from the assessment would be evaluated separately.
RECOMMENDATION
Direct staff to explore integrating the Housing Authority of the City of Alameda into the City of Alameda, or other models of governance, in order to advance the City’s supportive housing priorities
Respectfully submitted,
Gerry Beaudin, City Manager
By,
Abigail Thorne-Lyman, Base Reuse and Economic Development Director
Financial Impact section reviewed,
Ross McCarthy, Finance Director