To: Honorable Chair and Commissioners
From: Molly Rattigan, Deputy Executive Director
Prepared By: Stephanie Gaul, Housing Manager
TITLE:
Title
Section 8 Administrative Budget Adjustment
LABEL
RECOMMENDED ACTION:
Recommendationle
Adopt a resolution approving a budget adjustment to increase the expenditure budget of the Section 8 Administration fund as documented in Budget Amendment No. 5P05.
Body
DISCUSSION:
The Section 8 rental assistance program currently serves approximately 1,150 households within the County of Napa. Fair Market Rents are a key component of how the Section 8 program determines rental assistance amounts. Fair Market Rents are determined by the US Department of Housing and Urban Development (HUD) annually and reflect the 40th percentile of rents in the local area. Fair Market Rents, once defined by HUD, are utilized to determine the local Payment Standard, which is the maximum amounts the housing authority will pay towards rent and utilities for a voucher holder, based on bedroom size. By design, Fair Market Rents don’t keep pace with real-time changes in the housing markets, particularly in high-cost and high-demand areas. In Napa, Fair Market Rents restrict voucher holders’ access to limited available inventory.
The updated Fair Market Rents for 2026, which were released in August 2025, showed a decrease in fair market rents for Napa County. The decreases range from under 1% to 3% across the range of bedroom sizes. While the decrease is minimal, staff believe a decrease in fair market rents is not reflective of actual market conditions. Zillow shows the average rental price in August 2025, as an average across bedroom sizes, to be $3,200. The Zillow price is approximately 15% higher than the two-bedroom Fair Market Rents for 2026.
When HUD releases Fair Market Rents there is an opportunity for housing authorities to contest the local area Fair Market Rents and complete a local study to be submitted to HUD. Because the Fair Market Rents have historically lagged, and a decrease in Fair Market Rents further restricts voucher holders’ access to available units in Napa County, it is important to complete a Fair Market Rent study at this time. Staff notified HUD of the Housing Authority of the City of Napa’s contest of Fair Market Rents on September 18, 2025. In addition, staff released a Request for Proposal (RFP) for preparation of a Fair Market Rent study to be completed in conformance with HUD guidelines and in a format acceptable to HUD. RFP responses were due on October 15, 2025 and staff is negotiating with the selected vendor.
Because the Fair Market Rent study was not contemplated when the Fiscal Year 2025-26 budget was prepared, a budget adjustment is necessary to enter into an agreement with the selected vendor. The housing authority has sufficient reserves in the Section 8 administration fund for the budget adjustment.
FINANCIAL IMPACTS:
The estimated cost to the Section 8 Administration fund (84312510) is $125,996. A budget adjustment of $125,996 in the Section 8 Administration fund (84312510-53240) is necessary and is available in the unaudited fund balance as of September 30, 2025.
CEQA:
The Executive Director has determined that the Recommended Action described in this Agenda Report is not subject to California Environmental Quality Act (CEQA), pursuant to CEQA Guidelines Section 15060(c).
DOCUMENTS ATTACHED:
ATCH 1 - Resolution
EX A - Budget Adjustment
NOTIFICATION:
None.