The City of Palo Alto is pleased to present the U.S. Department of Housing and Urban Development (HUD) funded Community Development Block Grant (CDBG) application package to interested parties.
Donor Name: City of Palo Alto
State: California
City: Palo Alto
Type of Grant: Grant
Deadline: 01/07/2026
Size of the Grant: Not Available
Grant Duration: 1 Year
Details:
The City of Palo Alto invites organizations to submit an application for Program Year 2026-2027 CDBG funding for projects in the following categories:
- Economic Development;
- Housing;
- Public Facilities and Improvements, and
- Public Services
The purpose of the CDBG program is to enhance and maintain viable urban communities through the provision of decent affordable housing, a suitable living environment, and the expansion of economic opportunities, principally for low- and moderate-income persons. CDBG is an important tool for assisting local government agencies to tackle serious challenges facing their communities. The CDBG program has made a difference in the lives of millions of people and their communities across the nation.
National Objective #1 Activities benefiting low- and moderate-income persons/households
- The definition of a low- or moderate-income person or household is one having an income equal to or less than the income limits established by HUD. A minimum of 70% of the City’s total allocation must be used for this purpose. In order to determine if a project/activity qualifies under National Objective #1, it must fall under one of the following two activities: Direct Benefit Activities or Area Benefit Activities
Direct Benefit Activities
- A direct benefit activity requires the sub recipient to document that the program is benefiting low- and moderate-income persons. At least 51% of the recipients of Public Service programs must be within low- and moderate-income limits. Certain other activities, such as Housing rehabilitation, require 100% of the program participants to be low- and moderate-income households.
- Economic Development Activities
- Economic development activities include all endeavors aimed at increasing or maintaining the level of business activity in the City. These activities mandate that a business create or retain permanent jobs, of which 51% will be available to persons of low and moderate income. Examples include loans or grants to businesses providing job training opportunities for low- and moderate-income persons, and advertising and recruiting efforts directed to areas where substantial numbers of low- and moderate income persons reside.
- Public Services
- Up to 15% of the City’s total annual CDBG allocation may be used for Public Service Activities. At least 51% of a public service activity’s clientele must be documented as low- and moderate-income residents. Public service activities must be a new service or an increase in the existing level of service. Examples of public services include homeless needs, senior programs, childcare, domestic violence, drug abuse, and crime prevention programs.
- Presumed Benefit
- Certain groups are presumed by HUD to meet the low- and moderate-income criteria. HUD has defined these groups as: abused children, battered spouses, elderly persons, “severely disabled” adults, homeless persons, illiterate adults, and migrant farm workers.
- Housing Activities
- Housing activities involve the acquisition or rehabilitation of properties, or activities that support new housing construction for the purpose of benefiting low- and moderate-income households. The following are examples of Housing activities which meet these criteria:
- Rehabilitation of Housing occupied by low- and moderate-income persons. Improvements must eliminate sub-standard or deteriorating property conditions.
- Rehabilitation of multi-unit rental Housing of which at least 51% of the units are occupied by tenants whose income is less than or equal to 80% of the County median income.
- Housing activities involve the acquisition or rehabilitation of properties, or activities that support new housing construction for the purpose of benefiting low- and moderate-income households. The following are examples of Housing activities which meet these criteria:
- Economic Development Activities
Area Benefit Activities
- Area Benefit Activities serve geographic areas where not less than 51% of the households are low and moderate income. To meet this criterion, 51% of household incomes must be equal to or less than 80% of the County’s median income. Examples of Area Benefit Activities include public improvements such as street, sidewalk, curb and gutter improvements (and related design and engineering) and community centers.
- Public Facilities and Improvements Construction and/or general improvements to a neighborhood are allowable when the area is primarily composed of low- and moderate-income residents. General improvements include, but are not limited to, street and related improvements, sidewalks, public facilities, and water and sewer facilities.
National Objective #2 Activities which aid in the prevention or elimination of slums or blight
- Activities may qualify if benefiting a slum or blighted area as defined under state or local law and containing a sub-standard number of deteriorating or dilapidated buildings or infrastructure within the area. Redevelopment activity areas qualify under this category.
National Objective #3 Activities designed to meet community development needs having a particular urgency
- Activities must be designed to alleviate existing conditions which pose a serious and immediate threat to the health or welfare of the community, and which became urgent within the past 18 months.
Goals
The City of Palo Alto’s Five-year Goals were established to address the current housing and community development needs in the City:
- As of 2023, the City of Palo Alto had a shortage of 2,638 rental units or subsidies for very low-income renters—those with income of $75,000 and less. There are 5,082 renters with income of less than $75,000 in the City and 2,444 units affordable for them. Affordable rental units and rental assistance to reduce the cost of market rents continue to be needed in Palo Alto.
- The extremely high costs of rents—the median gross rent is more than $3,000/month—puts low-income households at great risk of becoming unhoused due to increasing rents. The market is further constrained by competition to house university students.
- Fewer than 1% of homes in Palo Alto are valued at amounts that a median-income household ($146,000 for a family of 4) could afford. Homeownership is vastly out-of-reach for all but very high-income households.
Specifically, from July 1, 2025 through June 30, 2029, the City’s Consolidated Plan expects to establish the following priority needs and subsequent goals as a guide for allocating CDBG funding:
- Increase the Supply and Condition of Affordable Housing
- Assist in the creation and preservation of affordable housing for low-income and special needs households. This includes funding home repair programs.
- Respond to Homelessness and Risk of Homelessness
- Support activities to prevent and end homelessness, such as funding affordable housing opportunities, resource centers for homeless individuals, and support for tenants of single-room occupancy units.
- Strengthen Neighborhoods through investing in Infrastructure and Public Facility Improvements
- Provide community services and public improvements to benefit low-income and special needs households. This includes assisting those with disabilities to transition from unstable housing to permanent housing, supporting residents of long-term care facilities, and supporting individuals experiencing domestic violence.
- Support projects that increase opportunities for Workforce Development
- Support economic development activities that promote employment growth and help lower-income people secure and maintain jobs. This includes funding nonprofits working toward developing the skills of low-income and homeless individuals.
- Provide supportive services to Low-Income Households
- Provide supportive services to low-income households through bolstering case management and navigation of services including legal assistance and tenant/landlord resolution.
Project Period
The CDBG funding cycle is from July 1, 2026 to June 30, 2027.
Eligible Activities
- Public services, within certain limits. The City awards CDBG funding to nonprofit organizations to provide public services and housing for low-income and special needs households, such as:
- Single Room Occupancy (SRO) resident supportive services for lowincome residents to help them maintain housing stability,
- Long-term care ombudsman to service the elderly,
- A one-stop, multi-service, day drop-in center to provide services for the homeless within the City,
- Domestic violence services; and
- Housing and emergency services
- Interim assistance necessary to arrest deterioration or alleviate emergency conditions threatening public health and safety
- Housing services
- Construction of housing
- Homeownership assistance
- Provision of assistance to carry out economic development and job creation/retention activities
- Rehabilitation and preservation of residential and non-residential structures, both publicly and privately owned
- Activities relating to energy conservation and renewable energy resources
For more information, visit City of Palo Alto.
