Feds give Vallejo rental assistance lifeline but hint at cuts to come

VALLEJO – The U.S. Department of Housing and Urban Development agreed this week to cover a $1 million shortfall to rental assistance programs in Vallejo amid growing concerns about cuts to social safety net programs under the Trump Administration.

City spokesperson Robert Briseño said the Vallejo Housing Authority met with HUD this week to discuss the expected shortfall, and HUD agreed to cover the needed amount for all Vallejo families who are utilizing certain HUD programs like Housing Choice Vouchers, veterans’ housing and project-based voucher assistance. 

 “The Vallejo Housing Authority also notes that this type of shortfall is typical for high-rent areas,” Briseño told Vallejo Sun. “This is NOT related to any budget decreases. The funds were allocated and obligated prior to the new administration budget.”

However, HUD hinted at cuts that were on the way, and told the city not to offer any new assistance. Briseño said HUD told the Housing Authority not to issue any new vouchers, freezing the current waitlist, and to stop absorbing vouchers from other jurisdictions.

Vallejo is not alone in the Bay Area in its shortfall over affordable housing, as other housing authorities such as in Oakland also face financial struggles. However, several members of the Vallejo City Council have within the last month raised concerns that such financial issues will only grow worse under the Trump Administration’s multi-faceted cuts.

While Trump’s “Big Beautiful Bill” passed in July does not directly impact HUD affordable housing funds, it aims to eliminate over $1 trillion in federal spending on other safety net programs which low-income people rely on, like Medicaid and food stamps. Additionally, Congress is proposing sweeping cuts to HUD’s budget and programs which could leave thousands of Californians without rental assistance. 

More than 900,000 Californians rely on federal housing assistance, while only about one in four of those eligible receive help, according to the California Budget & Policy Center. The Trump Administration’s proposal in Congress would cap assistance at two years, which could leave an estimated 306,800 people across the state without it, according to the Center on Budget and Policy Priorities.

Vallejo councilmembers fretted over the potential funding crises during a June 24 City Council meeting to approve the 2025-26 budget. Housing Authority Director Alicia Jones said that the department’s expenses had reached $2.6 million, compared to revenues of only $2.2 million. Her report said that typically when the Housing Choice Voucher program experiences a shortfall in Housing Assistance Payments to landlords – which are used to provide Section 8 tenant-based assistance – HUD will usually cover all funding for current landlords using year-end expenditures. 

However, Jones said, HUD does not always cover an entire shortfall. Worse, she added, “The situation looks even more concerning for the calendar year ending in 2026, with a projected shortfall of $1,711,642.”

There are multiple impacts from funding cuts from HUD, the city said, including measures already in place like rescinding vouchers and a freeze on selecting people currently on a waiting list. There could also be staffing shortages due to inadequate administrative fees. Jones’ report showed that a 25% cut in future HUD support to Vallejo would impact approximately 375 families, with an average per-unit cost of $1,501, while a 50% reduction would affect about 750.

Already, Jones added, the housing authority is reissuing housing choice vouchers to people on the regional list more slowly than average, serving 20 families per month rather than 70.

Councilmember Tonia Lediju, who manages the San Francisco Housing Authority, said that due to the federal government’s efforts to make sweeping cuts, it’s possible that HUD may not follow through on covering shortfalls in the future. 

“HUD has directed housing authorities not to make that assumption,” Lediju said. “If we don't get the dollars from HUD, we don’t make it. That means we have impacted families who would not have their subsidy paid.” 

Lediju brought up the matter again during the council’s July 8 meeting, when they voted unanimously to approve a five-year consolidated plan to submit to HUD. She asked to soon discuss how support for new homeowners in Vallejo can still happen, despite Trump’s bill impacting community development block grants starting in the 2026-27 fiscal year. 

Councilmember Alexander Matias agreed. “There is a size of our population that is on edge,” he said. “If we could get them some help, they could get into their first home. Why aren’t we unlocking some of this money to get more renters into their first home?”

Jones said that the current year’s funding from federal and state sources is set in place, but admitted that funds for the next year are absolutely uncertain. However, she said the authority’s goal is to allocate about $800,000 to 32 households for first-time homebuyers down payments under the Community Development Block Grant program. 

Lediju asked to bring that plan to the city’s Housing and Community Development Commission to consider allocating more funds for the goal while looking at new affordable housing developments, which are underway. 

The city did not speculate about what damage future federal cuts from the Trump administration could do to Vallejo’s affordable housing. Briseño told Vallejo Sun this month that the Housing Authority will continue housing assistance payments for current homeowners at this time.