January 29, 2026

Sticks & Bricks News for Developer’s: Inclusionary Housing

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This month’s Sticks & Bricks takes a closer look at why inclusionary housing remains a critical tool for affordable housing production, and why recent proposals to weaken San José’s IHO raise real concerns for developers and communities alike. We also share timely updates on new and extended funding opportunities, including HOME, CDBG, and local NOFAs, alongside key research and resources shaping the policy landscape in 2026. Plus, don’t miss upcoming training and events designed to help developers stay informed, connected, and prepared for what’s ahead.

The Value of Inclusionary Housing — Why It Matters

Earlier this week, San José City Council held what was referred to as “Housing Day,” where council considered a package of proposed changes aimed at jump starting housing production amid rising costs and stalled projects. Several of these efforts, particularly the time limited incentives and increased flexibility, reflect the financial pressures developers are facing, and SV@Home supports such solutions that help housing developments move forward. 

We also recognize that inclusionary housing depends on projects moving forward, and that ongoing housing production is one important way to help ease the affordability pressures experienced by lower-income residents. However, we are especially interested in how proposed updates to the Inclusionary Housing Ordinance (IHO) will preserve the City’s ability to produce deeply affordable homes over the long term, particularly if affordability requirements tied to the housing market are reduced or shortened.

For affordable housing advocates, the IHO is not just a policy requirement, it is a critical part of the local housing ecosystem. Inclusionary programs consistently produce affordable homes without relying on scarce City subsidies and help generate local resources that can be leveraged alongside state and federal financing. Shifting affordability levels upward or eliminating deeper-affordability options may help move forward some housing communities, but it also risks over-producing homes that remain out of reach for households with the greatest need, while weakening one of the City’s most reliable affordability tools.

We all agree that San José needs more housing, and fast, but not at the expense of affordability. Policies that increase homes built while reducing affordability shift greater pressure onto already-limited funding sources, leaving us with fewer tools to meet housing production goals for households who need it most while the need for homes that are truly affordable remains. As these discussions continue, SV@Home will continue advocating for solutions that balance feasibility with equity, recognize the realities of housing development finance, and grow local housing supply without leaving the lowest-income residents behind.

Funding Opportunities

Explore these new funding sources for affordable housing development:

  • NEW: HOME Investment Partnerships Program (2024 NOFA, Amendment #2)
    • The California Department of Housing and Community Development has extended the HOME 2024 NOFA for Program Activities after the round was undersubscribed, and applications will now remain open until funds are exhausted or a new NOFA is released.
  • NEW: HCD – CDBG Program (2025 NOFA, Amendment #1)
    • HCD has amended the 2025 CDBG NOFA to extend application timelines, with the portal opening February 2, and applications due April 3, 2026.
  • NEW: Sunnyvale NOFA
    • For developers with projects in Sunnyvale: the city has released its 2026 Notice of Funding Availability, supporting affordable housing land acquisition, pre-development, development, and rehabilitation. Applications open now through February 17.
  • San Jose Rolling RFP
    • The City of San José has launched a rolling RFP for its Gap Financing Program, accompanied by updated underwriting guidelines. Projects submitted will be publicly scored, with top proposals prioritized for funding and the remainder added to a new waitlist.
  • Homekey+ and Tribal Homekey+
    • The State of California has launched two parallel funding programs to expand Permanent Supportive Housing for individuals experiencing or at risk of homelessness with behavioral health challenges. The Homekey+ NOFA provides $2.145 billion for projects serving veterans and other individuals with behavioral health needs, and the Tribal Homekey+ NOFA allocates $121 million specifically for Tribes and Tribal Entities.

News and Resources

Access important resources and guidance for affordable housing development:

  • ICE Response Resources
    • At SV@Home, we are committed to providing developers with the resources necessary to effectively train staff on how to respond to potential ICE raids. Here we have compiled a list of available resources to help navigate these challenges.
  • NEW: Housing Action Coalition – 2026 Developer Pathway Program
    • The Housing Action Coalition has launched the Developer Pathway Program, a one-year pilot designed to support BIPOC and women-led developers with real, active projects through early-stage technical assistance, feasibility guidance, and structured feedback. Applications are due February 26, 2026, and the program is open to developers working on market-rate, mixed-income, and affordable housing projects across the Bay Area and Sacramento
  • NEW: Terner Center – Assessing the Cost of Impact Fees on Affordable Housing
    • This new Terner Center for Housing Innovation research brief analyzes how local impact fees affect affordable housing feasibility, using LIHTC data from 2020–2023. The findings show that impact fees add nearly $20,000 per unit on average, and highlight how fee waivers, reductions, or deferrals could materially improve project viability and reduce public subsidy needs.
  • NEW: Terner Center – 2026 Federal Housing Policy Preview
    • The Terner Center’s 2026 Federal Housing Policy Preview outlines key bipartisan housing bills, budget decisions, and executive actions that could shape development, financing, and affordability in the year ahead. The commentary is a helpful roadmap for developers tracking potential changes to federal funding programs, loan products, and regulatory requirements as Congress heads into an election year.

Upcoming Events

Mark your calendars for these key industry events: