In 2023, the U.S. Department of Housing and Urban Development introduced the Pathway to Removing Obstacles to Housing (PRO Housing) grant. This grant provides funding to local, regional and state governments and planning organizations to identify and remove barriers to affordable housing development and preservation. Grant funds are made available through a competitive grant application process. Applicants who can demonstrate progress and commitment to overcoming local barriers to affordable housing, especially by enacting improved laws and regulations, will be prioritized among the pool of applicants.

Small-scale Neighborhood Homes Initiative and Development Impact Fee Assistance for Affordable Housing

The City of San Diego will be applying for the Housing and Urban Development’s Pro Housing Round 2 grant for the maximum award amount of $7 million. If awarded this grant, the City of San Diego would utilize $1,000,000 of the grant funds for Small-scale Neighborhood Homes and $6,000,000 of the grant funds to provide financial assistance for Development Impact Fees.

Small-scale Neighborhood Homes Initiative - Small-scale neighborhood homes are townhomes, rowhomes and small-scale multiple-home buildings that are built to the same scale as surrounding traditional single homes that can provide home options for first-time homebuyers, families with children and middle-income households. These types of homes are often missing due to regulatory barriers such as zoning that limit the available land where these types of homes can be built. 

The PRO Housing Round 2 grant would fund the second phase of the Small-scale Neighborhood Homes initiative which includes the following: 

• A study to identify the feasibility of developing Small-scale Neighborhood Homes.
• An Analysis to identify opportunities to promote home ownership and provide alternative approaches to home development such as co-ops, land trusts, and social housing.
• An inclusive public engagement strategy to identify key groups, stakeholders, and communities, provide outreach and engagement opportunities, and organize workshops to solicit public input through the planning process. 
• Development regulations to allow for the development of Small-scale Neighborhood Homes at varying densities through new or amended zones within the City's Sustainable Development Areas.

For more information about the Small-Scale Neighborhood Homes initiative, please visit the Small-scale Neighborhood Homes initiative webpage.

DIF Credit for Affordable Homes Program - Development in the City, including affordable housing, is subject to the payment of DIF. Once collected, DIF funds are used to help fund public infrastructure, such as parks, libraries, and road improvements. The PRO Housing Round 2 grant application would provide funding to offer payment of DIF in the form of fee relief for qualifying affordable home developments, including 100 percent affordable homes located within the Sustainable Development Areas and High and Highest Resource areas as identified by the California Tax Credit Allocation Committee. High and Highest Resource areas generally have access to higher paying jobs, better performing schools, and fewer environmental issues like poor air quality. The funding of the DIF Credit for Affordable Homes Program will help to incentivize the construction of affordable housing in High and Highest Resource areas by covering the costs of the public improvement fees associated with the affordable homes to further the City's fair housing goals. 

Review and Comment

Public review of the application is an important element of the grant application. You may access a draft of the grant application below, and may provide comment on the application by emailing homesforallofus@sandiego.gov. 

PRO Housing Round 2 Grant Application 

In addition to reviewing and providing comment on the grant application, you may also attend the upcoming City Council meeting on Oct. 1, 2024, and provide public comment at the public hearing where we will be asking city council for authorization to apply for and accept grant funds. You may access the City Council agenda here. 

Strategic Plan Priority Areas of Focus

This initiative focuses on the following priority areas of the Strategic Plan: