How California Housing Funding Streamlining can Support Inclusive Housing

San Francisco Skyline with Transamerica building at center

The California Department of Housing and Community Development (HCD) implementation of AB 434, which will streamline a majority of HCD funding sources,  must make the promise of community living a reality  by funding affordable, accessible and integrated housing where people with and without disabilities can live and thrive together. The Kelsey shared public comment on how the program can meet these needs.

Dear Multifamily Housing Program, 

The Kelsey pioneers disability-forward housing solutions that open doors to more affordable homes and opportunities for everyone. We have 240 homes in our pipeline, including The Kelsey Ayer Station and The Kelsey Civic Center, and lead organizing and advocacy initiatives to support policy and market conditions to make inclusive housing the norm. We appreciate HCD’s hard work to implement AB 434 and we are grateful for the opportunity to comment. 

Our comments on the 2022 MHP Draft Guidelines and Appendix A,  Consolidated Scoring Appendix, are focused on how the guidelines impact the production of affordable, accessible, integrated, and inclusive housing that include the needs of people with disabilities, particularly Disabled Californians who are extremely low and low income and who need supportive services in order to live and thrive in the communities of their choice. Although integration is mandated by the Supreme Court “Olmstead” case, and thus the Americans with Disabilities Act (ADA) Title II, California has severely underinvested in developing community-based integrated housing for people with disabilities. 

As HCD continues to embark on streamlining and strengthening the largest funding source for affordable housing in California, and despite the fact that the statute forming the program explicitly mentions the housing needs for people with disabilities, the AB 434 guidelines and scoring matrix does not offer any specific incentives for developers to include integrated housing for people with disabilities into their projects. There has been explicit institutionalization, segregation, housing disinvestment, and discrimination towards people with disabilities in California, disproportionately multiply marginalized and Black and Brown disabled Californians; this can only be remedied with changes that explicitly include people with disabilities and their protected right to integrated, community-based housing. Strengthening the program via amending the AB 434 guidelines and scoring index must be accompanied by an increase in outreach and input from diverse Californians with disabilities. Along with our colleagues in the Disability Rights field, we have continued to identify missed opportunities for HCD to gain critical insight and feedback from Disability communities. 

Despite our areas of concern, which are explained below, we support the changes that include deeper targeting and more weight for lower-income households, as reflected in the Draft Consolidated Scoring Appendix. We are also supportive of the revised scoring appendix Section II B that creates a cap on the number of points achievable, which support’s HCD’s goal of funding a meaningful number of projects in areas it designates as “High and Moderate Resource” while retaining the possibility of funding for high-quality projects in communities of color that may be erroneously categorized as “Low Resource” or “High Segregation and Poverty.”  We also support that units with deep targeting must be distributed proportionately across all unit sizes. Additionally, we support that the guidelines now require a minimum of 15% of units in new construction projects to be accessible to people with mobility disabilities and 10% be accessible to people with sensory disabilities. We believe that these requirements are just the bare minimum and that HCD can continue its commitment to serving all Californians in need of affordable homes by incentivizing developers to go beyond minimum levels of accessibility. 

In summary, our concerns address specific impacts of the guidelines and scoring on people with disabilities, specifically: 

  • Disincentives for serving people with disabilities unless they are also experiencing homelessness; 
  • Favoring and incentivizing projects with higher concentrations of people with disabilities than recommended in community integration mandates and risks creating more institutional settings and less inclusion; 
  • Current limitations on defining services, and how services are planned and delivered within communities to support those utilizing home and community-based services (HCBS) and affirm individual choice.

Eligibility and Scoring Related to “At Least 45 percent Special Needs” 

In Article 2, Administration of Funds- Section 7307. Eligible Project section, we have concerns about the current qualifications for eligible project types, specifically in regards to: “(2) Special Needs, where at least 45 percent of the Restricted Units are limited under Department Regulatory Agreements to occupancy by Special Needs Populations, and the  Project complies with the integration requirements specified in subsection (f) below.”  

The requirement of a high minimum percentage of at least 45 percent, risks an overconcentration and continued segregation of people with disabilities, which opposes the integration mandate of Olmstead. The current percentage established by HUD Section 811, to ensure full integration of people with disabilities, is no more than 25 percent of units designated for people with disabilities. This requirement of at least 45 percent will make projects ineligible for using HUD Section 811 vouchers, which is a critical federal investment in affordable, accessible, and integrated housing for people with disabilities. Furthermore, at least 45 percent is not aligned with the California State Transition Plan to implement the HCBS Settings Rule by March 2021.

And although section (f) states that: 

“(f)  Special Needs Projects must demonstrate the integration of targeted populations with the general public by…2)   In Projects with more than 20 units, have no more than 49 percent of total units restricted under any “Department Funding Sources”, as defined in Section 7302(i) below, to occupancy by disabled Special Needs Populations. This limitation shall not be interpreted to preclude occupancy of any Project Units by persons with disabilities, or restrictions by other funding sources, including but not limited to TCAC, that result in more than 49 percent of total Project Units being restricted to persons with disabilities. It shall also not apply to projects complying with alternative requirements for demonstrating Olmstead compliance adopted by counties and approved by the Department.”

Regardless of the number of units, no more than 49 percent still comes into conflict with the standard of integration set by HUD Section 811 which is no more than 25 percent of units for people with disabilities. If the definition of Special Needs population continues to include people with disabilities, our recommendation is that should HCD set the requirement somewhere between 20% (the minimum level in prior versions of the MHP guidelines) and 25 percent. ​​

Definition of Special Needs

First, the current definition excludes people with certain types of disabilities who should be included. Specifically, excluded are people transitioning from hospitals, nursing homes, development centers, and other care facilities who have disabilities other than physical or sensory (e.g., mental disabilities, traumatic brain injuries). It also excludes people with physical or sensory disabilities who are transitioning from other settings—such as living with aging parents or in congregate settings—who want to integrate into the community but need affordable housing, with or without supports. Additionally, we are perplexed by the categorization of people by certain types of disabilities. As articulated by our colleagues at Disability Rights California, the categorization leaves underserved populations in some places and is duplicative in others. 

To address these issues, one recommendation is for HCD to revise the definition of “Special Needs Population(s)” to include people with a disability who need supportive services or home and community-based services to maintain housing stability. If this recommendation is implemented, then the requirement of projects having “at least 45% special needs” must be lowered and capped to ensure full integration of people with disabilities (as discussed above).

An alternative solution can be to create a new category outside of “Special Needs Population” for people with disabilities who need supportive services and create aligned eligibility measures and scoring criteria that would require a lower cap on the percentage of units reserved, to again ensure full integration. 

*In summary: Combining the two above, ideally both of these would be addressed. But, at minimum, either the percentage requirement of units to be eligible for special needs must be decreased or the definition of Special Needs and Disability need to be broken out in order for any disability-focused, HUD 811 eligible community to qualify for funding.

Definition of Disability

We echo the comments of our colleagues from Disability Rights California that the definitions of disability, including “(nn) intellectual disability” and “(y) Disabled population”, must be improved by aligning with federal definitions; such changes can support program consistency and help to include Californians with disabilities whose needs are still going unmet by HCD. 

Definitions of Case Management Services & Culturally Competent Services 

For terms (q) “Case Manager” and  (u) “Comprehensive Case Management”, please add “home and community-based services” to the list of services that the qualified person would provide. Adding home and community-based services explicitly supports people with disabilities’ protected right to receive self-directed services in their homes in community-based settings.  

Additionally, add “accessibility-related needs” or “disabilities” to the description of “culturally competent services” within the definition of “(t) Community-Based Developer”. Specifically,

 “‘culturally competent services’ means services that respect diversity in the community and respond effectively across cultures, regardless of differences in language, communication styles, beliefs, attitudes, accessibility-related needs OR disabilities and behaviors…” 

Adding a term like accessibility-related needs or disabilities affirms that responding effectively to diverse communities must include respecting and responding to the accessibility-related needs of people with disabilities. Adding “accessibility-related needs” or “disabilities” to this definition would also apply to (yy) “new community-based developer”. 

In addition, HCD should continue to prioritize the creation of service plans that allow individual choice around the type and level of services they receive. Currently, many NOFAs provide a resident service plan that implies the same services should be delivered and planned for all residents. However, we know one size does not fit all and should ensure communities do not predetermine what types of services residents desire before actual individuals themselves are consulted. We welcome continued conversations on how HCD can provide housing that aligns with the HCBS settings rule and supports individuals with disabilities choice and self-determination around services as more individuals transition to community-based housing rather than institutions and congregate settings.

Positively Scoring People with Disabilities At Risk of Homelessness / Institutionalization Alongside Chronically Homeless

The scoring criteria – in combination with certain definitions – weighs heavily towards projects serving Chronically Homeless households, making it virtually impossible to be competitive in serving any other populations, including people with disabilities who are at risk of homelessness and institutionalization.  We believe that serving chronically homeless individuals is critical and therefore, we support what leading homelessness advocates and organizations state as the appropriate percentage of units needed to best serve that population. In addition, projects that are serving populations who are at risk’s of homelessness and institutionalization must also be competitive for funding. This would ensure that HCD also prioritizes funding projects that can prevent people from experiencing homelessness.

Positively Scoring Projects Near Transit and Services

In addition to ensuring HCD advances the full integration of people with disabilities, we are disappointed to continue to see that the HCD adopt CDLAC’s approach to Affirmatively Furthering Fair Housing – an approach that has resulted in the disinvestment of the State’s housing resources from urban communities of color. New construction projects in San Francisco, Oakland, and San Jose have been virtually shut out of 2021 CDLAC funding rounds. Under the scoring criteria (b1) “State Policy Priorities”, no new construction of Large Family projects in areas that the HCD/TCAC Opportunity Maps designate as “Low Resource” or “High Segregation and Poverty” can achieve the maximum score that is necessary to receive funding in a competitive environment. As HCD staff are aware, the mapping methodology designates many urban communities of color as “Low Resource” or “High Segregation and Poverty,” despite the fact that these are communities of opportunity with access to transit and culturally appropriate resources for most impacted communities, including people with disabilities. In fact, access to high-quality public transit and services is key to building accessible, affordable, inclusive, and integrated housing for people with and without disabilities. We understand that efforts are underway to revise the map methodology. These efforts will take time, and it is imperative that HCD make changes to ensure that urban core projects are not completely shut out of HCD funding programs in the meantime.  

Additionally, we still believe that there should be more weight given to projects that are proximate to services and public transit. A recent publication that described the formation of the Opportunity Maps “California For All: How State Action Can Foster Inclusive Mixed-Income Communities” (Metcalf, 2020), noted that the researchers involved in the opportunity maps did not see any improved outcomes for residents who lived close to amenities such as grocery stores, drug stores, or schools. The methodology used to develop the maps did not take into consideration the growing set of literature that notes the positive externalities and health benefits of living within the urban core and being able to walk and take high-quality public transportation to your daily destinations. The other deficiency of the maps is that they focused on opportunity purely in terms of family economic mobility. It should not be a surprise to HCD that not all Californians are a part of a family unit nor have goals of economic upward mobility; although those two benefits should be available to more low-income Californians, writing the rules so that only affordable housing narrowly focused on those goals will be built will create unintended outcomes.

Case Example: The Kelsey Ayer Station 

The Kelsey is proud to develop The Kelsey Ayer Station in San Jose with both funding from the City of San Jose and also as an HCD supported project via The project was awarded funding from HCD’s Transit-Oriented Development (TOD) program. The Kelsey Ayer Station is a 100% affordable housing community, less than 400 feet from the light rail, and a 10-minute roll from downtown San Jose. This 115 unit community is universally designed to serve people with and without disabilities. It will provide 30% of its units for extremely low-income San Joseans (20% AMI) at less than $500/per month rent. The Kelsey Ayer Station is explicitly committed to affordability levels that are inclusive to people with disabilities whose sole source of income is SSI. This environmentally forward, urban infill project is inherently more expensive to build than projects on larger sites less connected to amenities. 

If the guidelines were adopted without recommended changes  Implementing these eligibility requirements and proposed consolidated scoring criteria would prevent future projects like The Kelsey Ayer Station from being competitive for funding. Yet if these current draft criteria are implemented, thus applied to TOD, we wouldn’t have been competitive. We would not have been competitive because The Kelsey Ayer Station reserves 24.5 percent of the units for extremely low and low-income people with disabilities who need supportive services. This cap on reserved homes aligns with the integration mandate of Olmstead and the Americans with Disabilities Act and therefore qualified us to receive HUD Section 811 funding.

The Kelsey Ayer Station has been celebrated as a first-of-its-kind disability-forward housing for the rest of the state and country to model.  Despite this community being disability-forward – ensuring that the development and future operation is on the needs of people with disabilities and community inclusion – under the proposed “at least 45%” requirement, projects like this would not qualify as special needs. HCD must align its consolidated scoring criteria to ensure that projects that explicitly aim to create inclusive, integrated housing for people with disabilities who need supportive services remain competitive for funding. 


Thank you again for the opportunity to comment on AB 434 MHP guidelines and the scoring matrix. Whether it is our recommendations on scoring, definitions, supportive service planning, we look forward to continuing and deepening collaboration with HCD as you work to implement AB 434 and ensure that all Californians, including extremely low and low-income people with disabilities who need supportive services, have affordable, accessible, and inclusive housing. 

We believe that California must lead the way in our country’s advancement of full integration and freedom of people with disabilities and the structure of HCD’s programs and implementation of AB 434 is critical to this advancement. 


Allie Cannington, Manager, Advocacy & Organizing

Micaela Connery, CEO