DATE: 08/05/2026
TO: Chairperson and Members of the Community Development Commission
FROM: Housing and Neighborhood Services Department
TITLE: HOUSING CHOICE VOUCHER (HCV) WAITING LIST CLOSURE
RECOMMENDATION
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Staff recommends that the City of Oceanside Community Development Commission (CDC) authorize the closure of the Section 8 HCV waiting list effective September 30, 2026.
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BACKGROUND AND ANALYSIS
The Oceanside Housing Authority (OHA) administers the federally funded Section 8 HCV Rental Assistance program. OHA currently maintains an active HCV waiting list and as of July 7, 2026, there are 5,013 applicant households on that list. OHA’s maximum authorized vouchers is 1,600 vouchers based on its Annual Contributions Contract (ACC) with the U.S. Department of Housing and Urban Development (HUD). However, the actual number of vouchers currently being used by families is 1,397 participant households given the current rental market rates and the average HCV rental assistance (the difference in the rental rate and what the tenants are able to pay).
ANALYSIS:
OHA operates under strict federal budgetary constraints determined by HUD’s ACC. For Calendar Year 2026, OHA's total renewal funding allocation for the HCV program is $31,212,504. Currently, OHA has 1,397 vouchers in active play (leased households requiring monthly subsidy) with an annualized expenditure of $30,694,908. This leaves a restrictive remaining balance of only $517,596. This is a minimal cushion that is insufficient to absorb mandatory program reserves by HUD, administrative fee shortfalls, and any inflationary rent adjustments occurring throughout the year. Federal funding allocations for the HCV program remain stagnant and no further additional allocations are anticipated to address the demand of eligible households on the waiting list or increased housing costs.
The fundamental driver of the current crisis is the hyper-inflation of the rental market in coastal San Diego County. The HUD federal funding formula has structurally failed to keep pace with localized market realities. Because OHA must pay significantly higher subsidies per family just to maintain current participants in their homes, OHA faces an immediate deficit by simply supporting the families already housed, which leaves no financial room to issue new vouchers.
Due to these severe funding constraints, OHA has not been able to select new families from the waiting list since January 2024. This issue is further compounded by regional pressures, as neighboring housing authorities-including Carlsbad, Encinitas, the City of San Diego, and the County of San Diego-having already closed their respective waiting lists to manage their own funding constraints. As one of the last open waiting lists in San Diego County, OHA faces an unsustainable influx of regional applicants looking to get on a waiting list, making closure an operational necessity.
Given the current outlook of funding from the federal government and the rising costs associated with the HCV program, even with an open waiting list, the financial reality is that OHA will not be able to select new applicants from waiting list for the next several years. Continuing to accept new waiting list applications creates false expectations for vulnerable families who believe an open list equates to housing assistance still being available.
From a program administrative perspective, staff must maintain the waiting list by accepting and processing applications and periodically updating those already on the list despite the lack of availability of funding to provide rental assistance. Closing the waiting list is a proactive step to prevent an unmanageable administrative backlog, preserving staff resources for servicing current participants, maintaining program compliance and providing realistic expectations to the public.
The HCV waiting list closure will not impact families currently on the waiting list; all active applicants will retain their existing placement, application dates, and local preferences. In addition, OHA will continue to operate and maintain its existing, separate site-specific Project-Based Voucher (PBV) waiting lists. Furthermore, in accordance with federal regulations, OHA will continue to establish and open new site-specific PBV waiting lists as new affordable housing construction developments come online, such as El Camino Real, Coast Villas and Olive Park.
Regulatory Compliance, Public Notice, and Agency Protocols
Per the OHA Administrative Plan <https://www.ci.oceanside.ca.us/government/housing-neighborhood-services/housing/section-8-housing-choice-voucher-program/forms-and-documents>, the agency is permitted to close the waiting list if it maintains an adequate pool of families to utilize available assistance (Attachment 1) and no formal action by the CDC is required by HUD. To ensure full statutory alignment, OHA will execute several mandated compliance actions.
Following authorization by the CDC, OHA will comply with federal regulations under 24 CFR § 982.206 <https://www.ecfr.gov/current/title-24/subtitle-B/chapter-IX/part-982/subpart-E/section-982.206> by publishing a multilingual public notice in local newspapers, minority media outlets, and prominently on the City’s website. This notice will be active at least ten (10) business days prior to the closure date of September 30, 2026. This public messaging will explicitly clarify that the closure does not penalize or remove families currently on the waiting list. This requested action by the CDC is the first step in providing transparent communication to the public of the OHA’s intent to close the HCV waiting list.
Finally, while HUD regulations do not require advance federal approval to close a waiting list due to funding constraints, OHA staff will formally notify the HUD Los Angeles Field Office in writing immediately following the CDC's authorization and prior to the effective closure date. This notification provides HUD with the necessary administrative record justifying the waiting list closure and officially verifies that OHA is taking appropriate, proactive mitigating steps to align program expenditures with its available federal funding allocation.
FISCAL IMPACT
No fiscal impact is anticipated by this action.
COMMISSION OR COMMITTEE REPORT
At its May 26, 2026, meeting, the Housing Commission, by a vote of 7-0, recommended that the City of Oceanside Community Development Commission authorize the closure of the Section 8 HCV waiting list effective September 30, 2026.
CITY ATTORNEY’S ANALYSIS
Closure of the Section 8 Housing Choice Voucher Rental Assistance program should be made in accordance with the Oceanside Housing Authority Administrative Plan, specifically Chapter 4 Part II <https://www.ci.oceanside.ca.us/government/housing-neighborhood-services/housing/section-8-housing-choice-voucher-program/forms-and-documents>, and in compliance with federal regulations under 24 CFR § 982.206
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Prepared by: Raymond Rull, Housing Program Manager
Reviewed by: Leilani Hines, Housing & Neighborhood Services Director
Submitted by: Jonathan Borrego, City Manager
ATTACHMENTS:
1. OHA Administrative Plan Ch. 4.II.A-C