HomeMy WebLinkAbout2026-04-09; U.S. Department of Housing and Urban Development Continuum of Care Program Update (Districts - All); Murphy, JeffCommunity Services Branch
Housing & Homeless Services Department
1200 Carlsbad Village Drive Carlsbad, CA 92008 442-339-2810 t
Council Memorandum
April 9, 2026
To: Honorable Mayor Blackburn and Members of the City Council
From: Jeff Murphy, Deputy City Manager, Community Services
Mandy Mills, Director of Housing & Homeless Services
Chris Shilling, Homeless Services Manager
Via: Sheila Cobian, Assistant City Manager
Re: U.S. Department of Housing and Urban Development Continuum of Care
Program Update (Districts All)
This memorandum provides updated information regarding the city’s Continuum of Care (CoC)
funding from the U.S. Department of Housing and Urban Development (HUD) and revises prior
assumptions based on recent developments. As of April 1, 2026, HUD will provide a 12-month
noncompetitive renewal of existing CoC grants, ensuring continued funding for grants awarded to
the city through June 30, 2027. Renewal amounts will be included in the fiscal year (FY) 2026-27
draft Operating Budget.
Background
HUD’s CoC Program is a federal funding and planning initiative that provides financial assistance to
local communities to address homelessness. The city currently administers two HUD CoC-funded
programs. This includes a Permanent Supportive Housing (PSH) Program and a Rapid Re-Housing
(RRH) Program. Together these programs provide $1,589,233 in funding for housing and
supportive services.
Discussion
As previously reported to City Council, HUD announced in 2024 that CoC awards would cover a
two-year period, which would have resulted in renewal of the city’s grants through FY 2026–27.
However, in 2025, HUD announced it was rescinding the two-year commitment and would instead
make funding for FY 2026–27 competitive. The new Notice of Funding Opportunity (NOFO)
released on November 13, 2025, incorporated a cap limiting funding for permanent housing
projects to no more than 30% of total CoC funding. Because approximately 90% of San Diego
CoC-awarded funds are dedicated to permanent housing, the Regional Task Force on
Homelessness, as the CoC collaborative applicant, advised the city that its existing PSH and RRH
Programs would not be recommended for funding under the new competitive criteria. Based on
that information, HUD CoC funding was removed from the city’s Homelessness Action Plan
funding plan presented to the City Council on December 2, 2025, and staff began evaluating
alternative program options.
Memo ID# 2026014
To the members of the: CITY COUNCIL Date: ______ CA____ CC____ CM____ ACM____ DCM (3)____x x x
xx4/9/2026
SC
{city of
Carlsbad
Council Memo – U.S. Department of HUD Continuum of Care Program Update (Districts All)
April 9, 2026
Page 2
Federal Legal and Administrative Update
HUD’s planned change in administration of the CoC Program was challenged by California and
many states in federal court. The court issued a preliminary injunction preventing HUD from
implementing the change and requiring HUD to proceed under the prior framework while the
litigation is pending. HUD then reopened/reinstated the prior funding process to allow eligible
renewal projects to be reviewed under the original NOFO criteria.
In addition, Congress approved appropriations language intended to prevent grant interruptions
by requiring HUD to issue 12-month noncompetitive renewals for CoC grants expiring during
calendar year 2026 if awards under a new NOFO have not been made by April 1, 2026.
HUD did not make any awards under a new NOFO by this date. HUD must now provide 12-month
noncompetitive renewals for grants expiring in the second quarter of calendar year 2026,
including the city’s programs, to prevent a lapse in funding.
Updated Implications for the City
Based on current information and coordination with regional partners:
• The city’s two CoC-funded Programs (PSH and RRH), currently set to expire
June 30, 2026, are expected to continue through June 30, 2027, under a federally
required noncompetitive renewal.
• No changes to program scope or service delivery are anticipated at this time.
• Staff do not anticipate City Council action at this stage but will return to the City Council
for action, if necessary, once HUD issues formal award guidance or implements the
renewal process.
Next Steps
Staff will track HUD announcements related to renewal awards and any further guidance resulting
from the federal litigation. Staff will incorporate the CoC funding amounts into the draft Operating
Budget based on the federal requirement for noncompetitive renewal, with final adjustments
made upon issuance of formal HUD award documentation or renewal guidance.
cc: Geoff Patnoe, City Manager
Cindie McMahon, City Attorney
Paz Gomez, Deputy City Manager, Public Works
Laura Rocha, Deputy City Manager, Administrative Services
Zach Korach, Finance Director
Dalton Sorich, Assistant City Attorney