U.S. Department of Housing and Urban Development
Office of Community Planning and Development

Consolidated Plan Contact


The City of Merced is located in the fast-growing San Joaquin Valley in Central California. The past two decades have seen the Valley area change from an agricultural economy to a mixed economy in which manufacturing is playing an increasingly important role along with government, retail trade and service industries.

Action Plan

The City of Merced's Consolidated Plan presents a strategy committed to pursuing all available federal, state and local resources to meet its housing and community development needs. HUD has approved $1,538,000 in Community Development Block Grant funds and $487,000 in HOME Investment Partnership Act funds for the City of Merced for fiscal year 1995. The One-Year Action Plan included in the Consolidated Plan details the various projects and programs on which these funds will be spent. Funds will primarily be used for housing and community livability activities.

Citizen Participation

The City of Merced has developed and follows a detailed Citizen Participation Plan that strongly encourages the involvement of low, very low and extremely low income residents in decisions regarding the expenditure of housing and community development funds. Public meetings and hearings are publicized and conveniently scheduled and technical assistance to citizens is provided by the City upon request.


The 1990 Census counted 56,216 people in the City of Merced, a 54% increase over the 1980 population of 36,499. The city's population is expected to grow substantially in the coming five years, although estimates vary. The projected 1997 population for the City of Merced as indicated in the Regional Housing Needs Plan of 1991 was 81,630, a 45% increase over 1990 figures.

Merced's median income (1990 Census) is $28,269. Very low income households are households with annual incomes up to $14,999 and low income households are households whose incomes fall between $15,000 and $24,000. Low and very low income households represent 44% of all households city-wide.

The past two decades have also seen profound, long-term changes in the city's population. Not only has the city grown, but it has become increasingly diverse. Between 1980 and 1990, the city's Asian/Pacific Islander population grew by over 1300%. The city's Hispanic population also grew quickly in the 1980s, increasing by a rate of 63%. These population trends have had important impacts on the city's housing market since both groups are predominantly low income. The ethnic breakdown of the population of Merced is as follows: White - 27,514 persons, 49% of total. Hispanic - 16,786 persons, 30% of total. Asian/Pacific Islander - 8,001, 14% of total. Black - 3,406 persons, 6% of total. Native American - 392. 1% of total. Other - NA.

South Merced has the highest concentrations of racial and ethnic minorities. The Asian/Pacific Islander concentration in the two Census Tracts in South Merced is more than twice the city-wide concentration. Likewise, the concentration of people of Hispanic origin is more than one and a half times the concentration citywide. For nearly every measured household income, housing conditions, overpayment, overcrowding, etc., South Merced is "worse off" than the rest of the city.


Housing Needs

The greatest need for housing assistance is among very low income households where the incidence of housing overpayment affects the vast majority of households, particularly among renter households and among households making less than 30 % of median income. Elderly households also represent a significant assistance need, particularly among elderly households with incomes of less than 30% of median and elderly households that rent. The housing needs of large family households are greatest among those households in the very low income category where severe overpayment is widespread. For large family households with incomes greater than 50% of median, the most significant housing problem is overcrowding.

Housing Market Conditions

The number of housing units in Merced increased 28% in the 1980s to a total of 18,848 units in 1990. Citywide, the largest increase was in the number of renter-occupied units. From 1980-1990, the number of renter-occupied units grew from 6,623 to 9,877, an increase of 49%. The rate of increase for owner-occupied units was 22%.

The fast-growing population has outpaced growth in the city's housing inventory and , as a result, in 1990 there were few vacancies and many overcrowded units in the city. Home prices and rents also increased in the 1980s, and many households demonstrated extreme housing cost burdens in the 1990 Census.

The economic recession in California has been the most recent trend to impact the city's housing market, slowing the pace of construction and putting a damper on escalating home prices. This has actually had some beneficial effects for affordable housing in the city. As sales activity has become increasingly concentrated among homes in the lower cost ranges, developer interest in new affordable housing projects has increased. Lower interest rates have also increased developer interest in such projects and have made home ownership opportunities available to more potential homeowners.

One of the most interesting current trends is the dramatic recent increase in the vacancy rate citywide (4% in 1990 to approximately 10% in 1995). This trend is directly related to the closure of Castle Air Force Base and the subsequent loss of approximately 5,750 base personnel. An eventual conversion of the base to a non-military use may dampen or eliminate the impact on vacancy rates

Affordable Housing Needs

There is a shortage of housing units in the City of Merced that are affordable to very low and low income households. Nearly 3 out of every 4 low and very low income households pay more than 30% of their income on housing costs. In particular, there is a shortage of housing units that can meet the needs of large family households with very low or low incomes. These households currently experience the highest incidence of housing overpayment, with nearly 100% of such households with incomes below 30% of median paying more than 30% of their income on housing.

The survey of city housing conditions conducted in the fall of 1991 identified 1,502 housing units in the city that are substandard and in need of rehabilitation. Most of these units are located in the older sections of Central and South Merced where there are significant concentrations of low and very low income households. Rehabilitation of such housing units is a critical component of the city's affordable housing effort as it provides a relatively inexpensive strategy for maintaining and improving the number of units that are available to low and very low income households.

To date the centerpiece of the city's rehabilitation efforts has been the Housing Rehabilitation Loan Program, representing the largest budget allocation for housing related programs in the city. The program has been extremely popular and successful, providing low-interest loan funds to eligible households and then recycling those funds into additional loans for other households as they are repaid over time. In the past fiscal year, loans were provided for the rehabilitation of 40 housing units in the city.

The city also operates an active Homebuyer Down payment Assistance Program.

Homeless Needs

There is no reliable data on the number of unsheltered homeless families or individuals in the City of Merced. However, it is believed that the number of such persons is small. Most people who are homeless in the City are able to find shelter of some sort either through one of the homeless-service agencies in the city or through family or friends.

Facilities and services for homeless people in Merced are primarily provided by the Merced County Community Action Agency (MCCAA). In the city limits, the MCCAA operates two permanent emergency shelter facilities, a transitional shelter facility, six transitional housing sites and a motel voucher program. MCCAA programs are supported through a variety of sate, federal and local private funding sources. In addition, there are several local private providers of services for homeless people, namely the Salvation Army (breakfast program), Catholic Social Services (motel voucher program), the Second Baptist Church (hot lunch program) and St. Vincent de Paul (bag lunch program). Services for people on AFDC are provided by the Merced County Human Services Agency.

The City of Merced is not currently providing any direct homeless assistance and thus has not identified any specific homeless shelter activities. However, the City is committed to working with both private and public homeless service agencies should they request such assistance in the future.

Public and Assisted Housing Needs

Public housing in the City of Merced is provided and managed by the Merced County Housing Authority (MCHA). The City of Merced Housing Program works in conjunction with the Housing Authority to ensure that the city and county housing programs work in tandem to provide quality housing for all city residents.

There are currently 286 public housing units within the City of Merced. Of these, 74 are single-family residential with the remainder being included within several multiple- unit complexes. The MCHA has stated that all of the older multiple-unit public housing complexes within the City have been upgraded to comply with Section 504 requirements. The remaining 74 are single family residences scattered throughout the city which are not subject to Section 504.

Currently none of the public housing units within the City of Merced are participating in an approved HUD comprehensive Grant Program for rehabilitation. However, a 44 unit development was recently completed utilizing Comprehensive Grant.

The MCHA currently has 562 Section 8 certificates and 531 Section 8 vouchers in use under its jurisdiction. The MCHA does not oversee any unit based Section 8 assistance programs. In light of Merced's large and growing population of very low and low income households, the need exists for more Section 8 subsides.

There are several programs in the City of Merced that provide housing and housing- related services for people with special needs. These programs provide assistance to the elderly, persons with mental illness, substance abusers, persons with AIDS, victims of domestic violence and farm workers. Many of these programs are operated in conjunction with or through the County of Merced. While the City of Merced has not adopted a priority for providing housing assistance to special needs populations in fiscal year 1995, the City's Affordable Housing Task Force has established a subcommittee to study the needs of special populations. In addition, a 116 unit low-income senior citizen project will be developed using a combination of PDA housing set-aside funds and low-income housing tax credits.

Barriers to Affordable Housing

Governmental controls and regulations can constrain new residential development either through the requirements they impose or in the manner in which those requirements are enforced. The following is a summary of public policies that impact the cost/and or delivery of housing in Merced:

Fair Housing

The Affirmative Marketing Policy of the City of Merced is described in detail in the Consolidated Plan. The City shall continue its practice of providing general information and telephone reference numbers to persons contacting the Housing Division with questions regarding affirmative marketing, federal fair housing, tenant's right, assisted housing and correction of substandard conditions in tenant-occupied dwellings.

Lead-Based Paint

In the City of Merced it is estimated that 8,785 housing units occupied by low income or very low income households contain lead-based hazards. Although accurate statistics are not available, it is likely that many of these homes are concentrated in the South Merced area where there is a concentration of families in poverty and substandard housing, two factors that are often correlated with the incidence of lead poisoning.

Lead based paint hazards represent an immediate risk to children. In 1994 there were been twelve to fifteen cases of elevated lead poisoning in children in the city that were investigated by the County Departments of Public Health and Environmental Health.

Lead poisoning education and abatement efforts in Merced are provided through the cooperative efforts of the County Public Health Department, Environmental health Division and Child Health and Disability Program.

Community Development Needs

The City of Merced is committed to ensuring the safety and well being of its citizens.

The overall non-housing priority is to improve the quality and quantity of community services offered. Immediate community development needs are to ensure funding for adequate police services, further cooperation and goodwill between the City Police and the Southeast Asian Community and ensure the continuation of the Community Garden Program.


Vision for Change

The provision of affordable rental units is one of the most significant needs in the City of Merced. The city will continue to use CDBG, HOME and other available funds to pursue the creation and preservation of all types of affordable housing with and emphasis on large families living in over crowded situations. Aside form housing the city will continue to pursue funding for activities that will enhance and ensure community safety and livability.

Housing Priorities

Priorities for affordable housing include: 1) The creation and preservation of all types of affordable rental housing 2) Provision of home ownership opportunities to low and moderate income households through the city's Direct Home Ownership Assistance Program. 3) Continued rehabilitation of existing structures through the city's Housing Rehabilitation Loan Program. 4) Continuation of the Emergency Loan Program for families with urgent need or serious health and safety problems.

Non-Housing Community Development Priorities

Priorities for non-housing community development needs are to: 1) Ensure funding for adequate police services 2) Further cooperation and goodwill between the City Police Department and the Southeast Asian Community and 3) Continue to fund the Community Garden Program.

Anti-Poverty Strategy

The City of Merced Housing Program works closely with the City's Economic Development Specialist to ensure that affordable housing efforts are properly coordinated with economic development activities to reduce the incidence of poverty in the City of Merced.

At present, the City has allocated $100,000 to a small business development loan program that provides low interest loans to qualifying low and moderate income business owners in the city. In addition, the Economic Development Specialist works to recruit new industry to the city and expand existing business. The goals, policies, and programs of the City of Merced's Housing Program help to support these anti-poverty initiatives by helping to ensure an adequate supply of quality, affordable housing in the community, thereby supporting business development activities.

Housing and Community Development Resources

Federal Programs

The primary federal resources are the HUD Community Development Block Grant (CDBG) Program and the HOME Program which is also funded by HUD. CDBG funds are provided to urban communities for use in neighborhood revitalization, economic development, community facility improvement, prevention and elimination of slums and activities aiding low-moderate income persons. Merced has been awarded $1,538,000 in CDBG funds for fiscal year 1995. The HOME Program is a flexible grant program that provides money to participating jurisdictions for use in responding to local housing needs. HOME funds may be used for acquisition, rehabilitation, new construction, tenant-based assistance, home-buyer assistance, planning and/or support services. Merced has been awarded $487,000 for the 1995 fiscal year.

State Programs

The City of Merced Housing Program works with private developers to obtain bond financing from the California Housing Finance Agency (CHFA) for the development of rental housing. The State program provides deferred loans to convert negative cash flows in projects where at least half of the units are for low-income households. Such funds and financing agreements are between CHFA and the developers themselves. The Housing Program provides assistance to developers in applying for CHFA financing.

Local Programs

Resources for Merced's Housing Program are provided through 2 local sources, Redevelopment Agency Set-Aside Funds and Rehabilitation Program Income. The Redevelopment Agency provides funding for the city's housing activities through tax- increment funds raised as the result of private investment in the city's redevelopment area. Redevelopment Agency set-aside funds for housing typically amount to $500,000 per year. The Merced's Housing Program operates a housing rehabilitation loan program that provides financing for the rehabilitation of housing units occupied by low and moderate income households. Income from this program is recycled back into new loans for new rehabilitation projects. Such funds typically amount to $375,000 in a program year.


While there are no nonprofit organizations that contribute significant financial resources towards housing activities in the city, the Valley Coalition for Affordable Housing does work closely with the city to promote the development of new affordable housing projects, with city funds providing the majority of the financing for such projects.

Coordination of Strategic Plan

In the Consolidated Plan the City of Merced provides a detailed description of the coordination efforts that will be undertaken by the City of Merced Housing Program over a five year period. The goal is to enhance coordination between itself and other housing and service providers in the City, namely the Merced County Housing Authority, the Merced County Community Action Agency, the Human Services Agency, and the Department of Public Health and Mental Health. As part of its affordable housing efforts, the City of Merced will undertake an annual evaluation of the housing programs included in the Consolidated Plan. This evaluation will be compiled in an Annual Performance Report which will be subsequently submitted to HUD for review and approval.


Description of Key Projects

The City of Merced One-Year Action Plan outlines the proposed use of approximately $2,325,000 in CDBD, CDBG program income and HOME funds. These funds will be spent on a variety of activities including:


Map 1 - Points of interest.

Map 2 - Low and moderate income areas outlined.

Map 3 - Low and moderate income areas outlined with Hispanic concentrations indicated.

Map 4 - Low and moderate income areas outlined with Asian and Black concentrations indicated.

Map 5 - Low and moderate income areas outlined with unemployment.

Map 6 - Low and moderate income areas outlined showing downtown area with streets.

For additional information regarding the Consolidated Plan for the City of Merced please contact:
Mr. Lee Pevsner
ousing Programs Manager
City of Merced
678 West 18th Street
Merced, CA 95340
Phone - 209-385-6863
Fax - 209-725-8775

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