Mayor Jerry Dyer said at Thursday’s city council meeting that Fresno has lost a state designation allowing it to apply for grant money for affordable housing projects.

Dyer announced that after two years, the city had lost its Pro-Housing Designation. The designation allows the city and developers to better compete for limited California grant money to build affordable housing.

“We’ve not done enough in their eyes to accelerate housing within our city,” Dyer said. “In fact, we’re the only city awarded the designation that missed the deadline. I’m ashamed of that as the mayor of this city.”

Dyer told GV Wire the loss of the designation stems from the council’s vote in December 2023 to reverse a previous decision and deny a hotel conversion to affordable housing in north Fresno.

Dyer said that the city can get the designation back, but if councilmembers want it back, they’ll have to make tough decisions. One of those includes a plan to fast-track housing conversions from office properties.

“If we want this designation, we’re going to have to do some things from the dais, the council will, that they may not be all that comfortable with,” Dyer said. “Any time you grant ministerial authority, meaning that projects for affordable housing are going to be able to not necessarily be rubber stamped, but approved in a more expedient fashion.”

Pro-Housing Designation Makes Grant Applications Easier

Grant money is often essential to getting affordable housing projects financed. Qualifying for those grants can be extremely competitive said Katie Wilbur, executive director of RH Community Builders, an affordable housing developer.

The extra consideration from the Pro-Housing Designation gives projects extra points as proposals are ranked.

“Not having that designation kind of starts you at a deficit, meaning your project needs to be stronger in other areas to be competitive with areas that do have that,” Wilbur said.

Dyer said the city could not even have applied for $43.7 million for housing in downtown Fresno and Chinatown without the designation. The city received it in March 2023. Fresno is now the first city to have lost the status, Dyer said at the meeting.

“The Pro-Housing Designation means to Fresno our increased opportunity to be able to receive additional funding from the state for not necessarily the city, but some of our partners like Fresno Housing and other nonprofit developers who focus on affordable housing,” Dyer told GV Wire.

Fresno Council Kills Affordable Housing Project in 2023

Dyer said the council’s decision to kill an affordable housing project in 2023 put the city on the radar of California Department of Housing and Community Development.

Before the denial, the council had unanimously approved RH Community Builders’ application for funding to convert the Quality Inn Hotel at Fresno Street and Bullard Avenue into 59 units of permanent studio rooms for the homeless.

After the state granted the project $16.5 million, councilmembers changed their minds, siding with neighbors who said the project would bring blight to the area. Critics pointed out that the housing would be near liquor and cannabis stories.

After a long public comment period, councilmembers voted 5-2 against the project, with Annalisa Perea and Nelson Esparza supporting it.

At the time, Dyer and Fresno City Manager Georgeanne White warned councilmembers that turning down the Project HomeKey funding could have negative consequences.

Fresno City Council President Mike Karbassi on Thursday told GV Wire he has no regrets on the vote. He said any housing approval has to be done with the consent of the neighborhood.

He also said the city has “really stepped up” when it comes to building affordable housing.

“I think it’s fair for us to expect a certain level of slack because we don’t have the big tax base other cities have, affordable housing doesn’t generate tax revenue for us,” Karbassi said.

Council Will Vote on Expediting Housing Infill Housing Construction

The council is voting Thursday on a proposal from councilmember Annalisa Perea to expedite office conversions to housing projects. It would allow builders to do the conversions without having to go through the lengthy environmental review and rezoning process so long as the projects meet a slew of other requirements.

It also provides an appeal process for councilmembers.

The modifications to the development code could add capacity for more than 20,000 additional housing units, according to the city.

Karbassi said that ministerial authority takes power away from the council on land-use decisions.

Perea said the change helps builders get through a process that can take months or years and can cost hundreds or thousands of dollars. She said it encourages infill development.

“The whole premise behind ministerial — and I get that it’s a scary word — is to do something a little bit faster, and in this case, we chose housing,” Perea said.