Pasadena Housing Budget Grows 5.4% Amid Federal Funding Concerns

The Pasadena Housing Department’s proposed budget for the upcoming fiscal year will increase by $2.5 million, primarily driven by grants supporting homelessness services and affordable housing initiatives, according to a staff report to be presented to the Economic Development and Technology Committee.

The Fiscal Year 2026 budget recommendation of $48.8 million represents a 5.4% increase over the current year’s spending, with services and supplies accounting for the largest growth at $2.4 million (6.1%). This includes significant funding increases for homeless services ($1.03 million), affordable housing projects ($615,000), and disaster response through the Emergency Solutions Grant program ($590,000).

“Homelessness funding has increased due to the award of new federal CoC and ESG grants, State ERF and FHC grants, and Measure A Local Solutions Fund revenue,” the report states. The department currently provides permanent supportive housing to 505 formerly homeless individuals.

The budget also reflects a notable staffing increase, with 14 additional full-time equivalent positions bringing the total to 105.70 full time employees. This growth stems primarily from 16 unbudgeted MASH positions added in November 2024, partially offset by two limited-term positions ending due to sunsetting grant funds.

Despite the overall increase, the department faces looming funding challenges. The ARPA funded Emergency Housing Voucher (EHV) program, which assists approximately 88 extremely low and very low-income households, will face a $2 million annual funding shortfall after 2026. The department plans to partially backfill the shortage with County Measure A dollars.

The budget report also highlights the department’s accomplishments in FY 2025, including providing housing for transitional age youth through the TAY I project (6 units), creating 25 affordable units through Inclusionary Housing requirements, and acquiring 17 Caltrans properties. Additionally, the department provided monthly rental assistance to 1,370 extremely and very low-income households and secured full-time permanent employment for 26 MASH program trainees.

Community development achievements included allocating over $4 million in State funding for the ADU loan program, awarding more than $300,000 to six nonprofit organizations providing public services, and funding over $1.3 million for infrastructure and public facility improvements.

Looking ahead, the Housing Department plans several major initiatives for FY 2026, including an affordable housing agreement for the Starr PSH/TAY project (52 units) at 231 N. Hill Ave., construction of five accessory dwelling units through the Pasadena 2nd Unit ADU Program, and the disposition of Caltrans SR 710 homes to generate additional housing funds.

Other planned initiatives include capital improvements at the Bad Weather Shelter location, reconfiguring Centennial Place, and expanding the MASH program by establishing new training opportunities with community partners and increasing MASH administrative positions throughout City Departments.

The budget includes $303,200 in General Fund enhancement requests, with $125,000 for personnel and $178,200 for non-personnel expenses. This includes $75,000 for the Housing Rights Center, which will no longer qualify for CDBG funding in FY 2026 because their application did not meet threshold requirements.

Federal CDBG funds are being reduced due to the CDBG CARES fund sunsetting, and the department warned committee members about potential additional federal funding cuts that could impact various housing programs in FY 2027, potentially affecting Community Development Block Grants, rental assistance, and homelessness services.

The Economic Development and Technology Committee will consider the proposed budget during its regular meeting on May 20, 2025, at 5:00 p.m.