To: Contra Costa County Housing Authority Board of Commissioners
From: Joseph Villarreal, Executive Director
Report Title: Report on the Shortfall Funding Status of the Housing Choice Voucher Program
☐Recommendation of the County Administrator ☐ Recommendation of Board Committee
RECOMMENDATIONS:
CONSIDER accepting a report on the shortfall funding status of the Housing Authority’s (HACCC) Housing Choice Voucher (HCV) program.
BACKGROUND:
Shortfall in the Housing Choice Voucher (HCV) program is when a housing authority does not receive enough annual renewal funding to continue housing everyone on their program currently. There are many reasons a housing authority could face shortfall, but, in general, Congressional funding for the voucher program has not kept up with rent inflation nationally, which has been historically high over recent years. As a result, the United States Department of Housing and Urban Development (HUD) has been inundated with an increasing number of housing authorities across the country who have fallen into shortfall, and it has been difficult for HUD to juggle funding to keep everyone housed nationally.
Nationally, the HCV program received $38.4 billion in funding for 2026, with $400 million set aside to fund housing authorities in shortall, a number that is about double what had previously been set aside for this purpose. However, HUD is currently projecting that shortfall will actually total somewhere between $600-$800 million this year. To compound matters, it is impossible for HUD to truly gauge the expected scale of shortfall by year’s end since not every housing authority is good at projecting their costs. Last year HUD had housing authorities who did not realize they would be in shortfall for 2025 until December, including one that needed $35 million in additional funding in the middle of the month. It is hard to imagine how these agencies were not aware they would be in shortfall until that late in the year.
Staff have made several initial changes to HACCC’s HCV operations that have resulted in our projected shortfall dropping by about $1.3 million this year. Staff are currently analyzing more substantive policy and subsidy changes and will bring these to the Board in September. The decisions our agency needs to make center around the balance of how much risk we are willing to take that HUD will have enough funding if we need more by the end of the year versus how much more rent burden we are willing to place on our families. Staff have also had several productive conversations with HUD staff and will update the Board at the August 11, 2026, meeting.
FISCAL IMPACT:
The United States Department of Housing and Urban Development (HUD) is projecting a shortfall in 2026 voucher funding for HACCC’s HCV program of approximately $11,000,000. This is down from $13,320,654 in July.
CONSEQUENCE OF NEGATIVE ACTION:
None. Informational Item Only.