Budget Workshop for Housing & Community Development Department – May 13, 2026
Budget Workshop for Housing & Community Development Department – May 13, 2026
The Housing and Community Development (HCD) Department presented its fiscal year 2027 budget to the committee. Director Mike Nichols and CFO Tamika Jones outlined staffing reductions, budget alignment with the mayor's priorities, and plans to close the budget gap. Discussion covered grant administration costs, the city's homelessness initiatives, and alternative funding sources. Two members of the public offered comments.
Public Comments & Testimony
- Doug praised CFO Tamika Jones for her work securing grant reimbursements and noted a large turnout at HCD's budget meeting at the Fantastic Neighborhood Center. He advocated for factory‑built housing as a rapid, cost‑effective solution and urged a demonstration project, possibly on Third Ward lots.
- Laura Allier requested financial statements from the Houston Housing Authority (now Alliance HTX). Councilmember Ramirez clarified the authority is a separate entity not under city control and directed her to the agency's website.
Discussion Items
- Staffing Reductions: HCD reduced full‑time FTEs from 183 to 156 (a reduction of 27) and eliminated 16 funded positions from other city departments (from 25 to 9), primarily due to the closeout of disaster grants.
- Budget Alignment: The department aligned its $1.2 million general fund allocation with the mayor's priority of "government that works" and its $37 million special revenue fund with "quality of life."
- Closing the Gap: HCD proposed eliminating the rent line item (an eligible administrative expense) for an 8% reduction, falling short of the citywide 10% target because of limited general fund allocation.
- General Fund and Special Revenue Fund Expenditures: General fund expenditures cover personnel (including a portion of the director's salary), employee exit costs, restricted accounts, and non‑reimbursable services. The special revenue fund supports the in‑street homelessness initiative, with all dollars flowing to partner agencies.
- Revenue and Grant Awards: The estimated new awards for FY27 are similar to FY26 except for the inclusion of DR24 funding. CDBG increased slightly, HOME decreased, and overall the dollar amount was a "pleasant surprise." Administrative cost percentages vary by grant (e.g., DR24 at 5%, CDBG up to 20%).
- Administrative Costs and TURS Funding: Councilmembers questioned how administrative costs are covered beyond grant caps. CFO Jones explained that employees must track hours by grant code; TURS affordable housing funds supplement administrative expenses. Last year, about a third of the TURS appropriation covered such costs.
- Homelessness Initiatives: Director Nichols noted the city spent $16 million on a new facility and $133 million annually to operate it. He emphasized the need for more federal funding and county investment in exit housing. Councilmember Martinez urged exploring stable revenue sources (e.g., hospital district, bonding capacity). Councilmember Thomas highlighted the importance of maintaining HUD entitlement allocations amidst proposed federal budget cuts.
- Future Funding and Coordination: Councilmembers discussed bonding capacity through the Houston Housing Finance Corporation or housing authority, the need for county commissioners to invest more in housing, and aligning the city's land trust, land bank, and other entities.
Key Outcomes
- No formal votes were taken; the presentation and discussion served as an informational budget workshop.
- The department will continue to pursue grant reimbursements and may add compliance staff to ensure accurate time allocation.
- Director Nichols committed to exploring factory‑built housing, with Councilmember Thomas expressing support for a demonstration project.
- The committee acknowledged the department's efficiency given limited general fund support and the need to "match money with mission."
Meeting Transcript
On to our next budget workshop, this time housing and community development department. So we are joined by housing director Mike Nichols and CFO Tamika Jones. We've also been joined by Councilmember Tiffany Thomas, who was here the last part of the last meeting, too. And I think that covers everybody that has been here. So with that, director, the floor is yours. I want to thank you so much for your time. Although we are not the biggest users of general funds, uh, we do have an important depart department, and we feel that the finance area is one of our strengths. So we'll answer all sorts of questions, but the first set should be fairly easy. Um page one is the who's controlling areas is our current organizational structure as of April 30th, 2026. Compared to last year's presentation, HCD has reduced its staff from 183 full-time FTEs to 156, the reduction of 27 people and funding positions within other city departments from 25 to 9, a reduction reduction of 16. These reductions are primarily attributed to the closeout of our disaster grants and associate personnel, and I hope it has to do with some efficiencies in our various departments. We really took this to heart as we reduce staff. Um we're still looking at that and seeing if it impacted our timeliness of our work, but we will continue to work through that. Um I will turn this over now to Tamika Jones, TJ, and um who again I'm highly indebted to um because as I've come into this department, having a strong CFO has been very important to me. Good afternoon. Moving into our presentation, we will move to the next slide. What we wanted to highlight here for the committee is our strategic alignment with both our general fund allocation as well as our special revenue fund. So taking a look at, and these amounts are in thousands, taking a look at our 1.2 million, almost 1.3 million in general fund, you will see we have aligned that with the mayor's priority of government that works, as well as the third just over 37 million for our special revenue fund. We have aligned that with the quality of life mayor's priority. Next slide. Next slide. What we wanted to also highlight to the committee is the housing departments. Thank you. Yes, thank you. Yes. I don't know that we're really tall, but I'm the shortest one in my house. She's tall. She's just the shortest in our house. Yeah. Uh, we wanted to highlight for the committee plans to eliminate the gap. So what this does show is our department's contribution towards the city's initiative with departmental reductions of about 10 percent. So, due to our limited general fund allocation, we unfortunately do not have a full 10% to give. Uh however, what we do have available to give is the reduction of our line item related to rent. Rent is an eligible administrative expense that we are able to seek reimbursement for through either our federal or state awards uh because it is an administrative line item, so we are able to uh reduce that amount on our general fund allocation. If you take a look at that amount as a total percentage, it's just over eight percent. So, not a full 10 percent, uh, but it is about an eight percent reduction. Now moving into our general fund and special revenue fund expenditures. What you can see here is a comparison between fiscal year 25 actuals along with fiscal 26, where we were with our budget, where we believe we will end up at the end of fiscal year 26, along with what we are proposing our fiscal 27 to be, along with just a variance. So, as you can see for our general revenue, our general fund, excuse me, we are estimating a 1.2 almost 1.3 uh million dollar allocation. And then for our special revenue fund, which does support our in-street homelessness initiative, we are estimating and proposing a 37.3 million dollar uh fund balance for fiscal year 27. And we are projecting to spend the fund balance for both of those funding sources by the end of each fiscal year. And we typically do a good job of expending the full fund balance. Let's talk through what some of those categories are within each one of those funds. So with the general fund, you can see and this is just a comparative also to show you some of those prior fiscal years. So with the limited general fund, we do cover um personnel. That personnel does include a portion of our director's time as well as employee exit costs that are non-reimbursable with some of our other funding sources. If you recall, we are very heavily uh grant funded, uh 99.9% grant funded. So this is our limited allocation, and so a portion of our director's salary is covered under the general fund as well as our employee exit costs. Um we are eliminating the office rent as I talked about a few minutes ago. Uh restricted accounts, uh restricted accounts are those interfund accounts that we um have at the cost of being a city department that makes up the majority of our general fund allocation.
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