What's at stake?
Fresno Mayor Jerry Dyer announced during Thursday’s Fresno City Council meeting that the state has revoked their Prohousing Designation. The designation gave the city access to apply for millions of state housing dollars. Dyer said there is a roadmap to getting the designation back, but the process could take months.
The mayor’s announcement comes on the same day that the Fresno City Council began hearings over a proposal to streamline housing developments on office-zoned land and near bus stops. The proposal must pass to satisfy the Prohousing requirements, but council comments make it clear that’s no guarantee.
California housing regulators have revoked Fresno’s ability to apply for millions of dollars in state housing funds, citing what they believe is an inability from the city to address its housing needs in a timely manner.
The state’s decision was announced by Fresno Mayor Jerry Dyer at Thursday’s City Council meeting — the same day a hearing was scheduled over a proposal to streamline the process of developing housing in office zoned districts or near bus stops.
“We’ve not done enough, in their eyes, to accelerate housing within our city,” Dyer said at the meeting, after learning of the state’s decision from a call from the Newsom administration.
The state awards Prohousing Designation status to cities and counties that they believe are doing their part in addressing their local housing needs. The Prohousing Designation is even a requirement to even apply for millions of dollars in housing subsidies. The city obtained the coveted status in 2023.
The revocation letter by the state cited multiple housing policies the city hasn’t passed, now well beyond the established deadline of fall 2024.
Dyer said at the council meeting, “We’re the only city awarded the designation that missed the deadline, and I’m ashamed of that, as the mayor of the city, and I know all of you on the council are as well.”
The city loses Prohousing status at a time when the guarantee of future housing dollars across the nation has never been more uncertain.
Earlier this month, the Fresno Housing Authority sounded the alarm to constituents that heavy cuts proposed in President Donald Trump’s current budget plan would cause a “mass displacement event,” as it proposes gutting the Housing Choice Voucher, or Section 8, program.
Dyer also announced as part of his budget plan that other federally subsidized projects across the city, like the $32 million Senior Center project in Central Fresno, are also at risk, as the federal department of Housing and Urban Development faces massive change.
Most of the city’s affordable housing funds come from the state and federal government.
Will the city clear its first hurdle toward regaining Prohousing status?
Thursday’s meeting also saw the council hold an afternoon hearing for a proposal to streamline housing developments in the city’s office zoned districts — many of which are located in North Fresno along the Bullard, Herndon, First and Cedar corridors. The city needs to approve the streamlining proposal to get back in the good graces of state regulators.
With the proposal already being alleged by some local leaders as being suspiciously processed in conjunction with a controversial southwest Fresno rezoning bid, its connection to the city’s Prohousing status attaches yet another complicated entanglement for the council to consider.
The afternoon hearing, which lasted about two hours, included many of the same narratives discussed among councilmembers dating back to the proposal’s first appearance on the agenda in March.
Those who lobby for an approval say it would signal a rejection of NIMBY attitudes and sprawl development practices in the city, an investment in already-established, high-resource neighborhoods, and provide a roadmap for cheaper housing city-wide.
Opponents of the proposal, meanwhile, say a rejection affirms the local government and the public’s right to more easily voice their concerns over future developments in their neighborhoods, while not handing over too much power to unelected developers.
No vote was held on Thursday, as the hearing was only meant to formally introduce the proposal and allow for residents to voice their opinions on it.
About 20 residents spoke during public comment, mostly in opposition to the ordinance.
Among the commenters was local realtor John Krikorian, who said he believes the council’s approval of the proposal, as is, would “bring [Council] closer to being an authoritarian government.”
Local developer Dirk Poeschel was one of the supporters of the ordinance, who said he believes the proposal includes “reasonable safeguards to assure public notice.”
Many electronic comments were also submitted to the council ahead of the hearing, with most in opposition to the proposal. “The planners and city council do not consider the preservation and character of the neighborhood,” read many of the letters.
Among the groups who sent letters in favor of the proposal are the Fresno Chamber of Commerce and INVEST Fresno, a coalition of developers and business leaders.
Councilmembers float amendments to by-right development proposal
The proposal, as is, would allow developers to get housing projects in office-zoned districts approved by-right, meaning without the need for discretion by the Fresno City Council or for public input. Development approvals could still be appealed.
Possible concessions were floated as a way to move the proposal across the finish line — such as revoking the ministerial nature of development approvals for projects planned within 500 feet of a school, and across other sensitive areas.
Council President Mike Karbassi floated another possible amendment to the proposal: getting rid of ministerial approval entirely.
The state’s Prohousing Designation and the city’s compliance with its Housing Element are contingent on the city zoning more land to be available for homes. City staff agreed that the proposal does not need to include ministerial approval to meet Prohousing requirements.
“So ministerial does not have to be approved,” Karbassi confirmed with city staff. “I know the developers want it, but it does not have to be approved to actually get our pro housing designation back.”
“That’s correct,” said Sophia Pagoulatos, a long-range planner with the city, in response.
No councilmembers agreed to any amendments at the hearing, as most chose to reserve judgment until the final vote.
There was no officially scheduled time for the proposal to be brought back to the Council for a final vote announced at Thursday’s hearing. However, time will be of the essence for the councilmembers to approve this proposal and others if they choose to regain the coveted Prohousing status.
The state’s letter outlined the remaining of the city’s 33 housing commitments that must be approved for Fresno to regain that status. Dyer said at Thursday’s council meeting that they should all come before the Council for approval by the fall, with most scheduled to appear by June.
Dyer and White said that, ultimately, the state has discretion to give the status back, and may choose to award it based on the city simply showing haste to approve the items.
“… but we’re going to shoot for all 33,” Dyer said.
Karbassi said during the mayor’s earlier comments that the state’s decision was ultimately unfair, citing the city’s strides in housing and homelessness response.
“We’re getting no credit whatsoever for that, and they’re pouncing on us, and that’s very frustrating for me,” Karbassi said. “From this to the unfunded mandates, where we have to take everything on ourselves …We have big city problems. We don’t have the tax base of a big city.”
Acknowledging the state’s discretion, Karbassi said he wouldn’t be holding his breath on the future of the city’s Prohousing status.
“I think the trust has been broken with HCD, because I think we had certain assurances that we were on our way to keep our designation, and they’ve taken that from us, so I’m very suspicious,” Karbassi said.
City loses competitive edge to fund downtown project
Pagoulatos, the planner, told Fresnoland the city could lose out on its current grant applications — including a bid for $10 million for homelessness support and prevention.
On top of losing access to state dollars, the loss of the Prohousing designation could put current projects at risk, too.
Dyer said the Fresno Housing Authority is soon applying to the state to help them subsidize a massive affordable, mixed-income housing project on what was formerly a CVS Pharmacy on Fulton and Tuolumne Streets downtown. The project, he said, aims to add 464 apartments, with half of those units affordable to people making less than the region’s median income.
The loss of the project would be yet another loss for a city that’s desperately tried to grow its downtown.
The housing authority is applying for $35 million from the state’s Affordable Housing and Sustainable Communities program, according to Kristine Morgan, the authority’s communications manager. The program doesn’t require Prohousing status to apply, but it does favor applications from cities with the designation.
The housing authority said they are “uncertain” how the loss would affect their application, but they still plan to apply.
“While changes to Pro Housing status may influence competitiveness in some programs, we will continue to evaluate and compete for all possible funding programs,” Morgan said. “Our priority is to keep critical projects moving forward while adapting to evolving conditions.”
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