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

Consolidated Plan Contact


The City of Modesto is located in Stanislaus County, in the northern section of California's San Joaquin Valley. Modesto serves as the County seat and jobs center for Stanislaus County and parts of adjacent San Joaquin County. The City also serves as the regional center for retail, government, medical and other services provided to area residents.

Action Plan

The City of Modesto Consolidated Plan represents an expansion of the traditional ways the City has approached housing and community development issues. The goal is to integrate housing, economic and community development needs, resources and strategies in a coordinated and comprehensive manner so that the City, its neighborhoods, and citizens can works together.

Included in the plan is the Annual Action Plan for Fiscal Year 1995-96 identifying proposed projects to be funded with approximately $ 5.2 million of Community Development Block Grant (CDBG) funds and HOME Investment Partnership Program and program income. These funds will primarily be spent on housing rehabilitation, neighborhood revitalization, economic development and housing development and assistance.

Citizen Participation

As part of the development of the Consolidated Plan, the City reached out to representatives of non-profit organizations, neighborhood groups, the private sector, other government agencies and services clubs to determine community development needs and to develop priorities and strategies. Overall, the City has begun to form partnerships with many of the "players", as efforts continue to focus the CDBG and HOME programs on our locally defined needs and priorities. In order to provide structure and guidance in developing the Consolidated Plan and the Annual Action Plan, the City followed a Citizen Participation Calendar. The Calendar identifies proposed dates for meetings, public hearings and application deadlines.

Citizen Participation Calendar will be developed on an annual basis to correspond with the development of the Action Plan for the subsequent year and community development activities. The Calendar, Requests for Proposals for Funding, and the Proposed Used of Funds were published in local newspapers and translated in Spanish. Four public hearings were held to consider community development needs, requests for funding; funding recommendations; and the adoption of the overall Consolidated Plan. Included in the Citizen Participation Calendar, and prior to the second hearing, (and for a 30-day period), copies of the draft Consolidated Plan were available for public review and comment. The Plan was approved by the Modesto City Council on May 2, 1995 for implementation commencing July 1, 1995.


The City of Modesto, California is located in Stanislaus County, in the northern section of the San Joaquin Valley. Modesto is the metropolitan area's central city and has been a major player in Stanislaus County's demographic and economic development. This should not be surprising given the growth of the City which serves as the County seat for Stanislaus County and as a jobs center for Stanislaus County and parts of San Joaquin County. Modesto also serves as the regional center for retail, government, medical and other services provided to area residents.

Population migration, especially from the San Francisco Bay Area, accelerated during the second half of the 1980s. By the mid-1980s, a combination of local and regional factors-- including an interest in local economic diversification following the recession of the early 1980s, a search for new revenue sources in wake of Proposition 13, declining housing affordability levels in the Bay Area, and the perceived benefits of Stanislaus County's quality of life -- served as catalyst for growth An expanded radius of migration and more long distance commuting had occurred. These results had a measurable effect on Modesto.

In 1989 the median family income (MFI) was $32,922. While 19% of the City population in 1989 had incomes below 50% of area median, the proportions were substantially higher for the African-American (37%), Asian (36%) and Hispanic (27%) population.

The ethnic breakdown data for the City of Modesto indicate that the largest growth rates for specific ethnic groups occurred in the Asian and Hispanic populations. The Asian and Pacific Islander population grew from 3,316 in 1980 to 12,384 in 1990, an increase of 273%. This Hispanic population grew from 11,231 in 1980 to 26,920 in 1990, an increase of 140%.



Modesto's rapid growth has caused major problems in its ability to meet housing needs. As the population has grown and demanded more housing, housing costs have increased, putting more pressure on the lower income population. As new housing development catered to a Bay Area commuter population that could afford higher cost housing than local consumers, the local population was priced out of most of the new housing that was being developed. Consequently, the bulk of new housing development in the late 80's and early 90's consisted of larger and more expensive homes that were beyond the affordability of local residents.

The subsequent recession reduced both the available pool of Bay Area homebuyers and the ability of local residents to purchase more expensive and larger homes. In effect, the housing market became more localized, price in relation to local incomes became a key factor in the market, and the inventories of higher priced homes limited opportunities for local construction and growth. Presently, the housing market is very weak and caters primarily to local, first-time homebuyers.

Housing Needs

It is estimated that the number of households needing housing assistance will increase within the next five years, based on preliminary data from the 1990 Census and current demographic and economic trends. As long as the cost of housing remains higher in the Bay Area, Modesto and other cities of the San Joaquin Valley will continue to experience a growth rate augmented by in-migration. Furthermore, as housing cost are lower in the Central Valley than in the Bay Area, out-migration will tend to be lower.

One gauge in measuring the level of migration into Stanislaus County lies in the increase of public assistance. Since public assistance amounts are basically the same throughout the State, families on public assistance see the San Joaquin Valley as the place where their income will buy more, especially in the cost of housing. As a result of this and the other economic and demographic trends, the number of households receiving public assistance has continued to increase. Most families on public assistance also require housing assistance.

The following are six major "needs" studies that address a variety of housing needs:

  1. Regional Housing Needs determinations as required by State law, which are determined by the local Council of Government (SAAG).
  2. Housing Element identified housing needs for the various income categories.
  3. Housing Needs resulting from increased population growth, both in the City and the surrounding region.
  4. Housing needs resulting from the deterioration or demolition of existing units or from the loss of existing affordable rental stock;
  5. Housing needs resulting from the presence of special needs groups such as the elderly, handicapped, large families, farm workers, female-headed households, low-income and minority households and the homeless.
  6. Housing needs that result when households are paying more than they can afford for housing.

Housing Market Conditions

Consistent with county-wide housing and population trends, Modesto's housing stock has grown significantly over time. In 1960, there were 12,943 housing units, or 25% of the county's total housing stock. Between 1960 and 1990, the number grew by 370%, which was faster than in either the county as a whole (155%) or the state (105%). By 1990, the City of Modesto had 60,878 housing units, comprising 46% of the housing stock of the county.

In 1960, 32.6% of the occupied units in Modesto were renter occupied and these comprised 26% of all such units in Stanislaus County. Thirty years later, the comparable statistics were 41.5% and 48.9%. In the interim, the number of renter occupied units soared by 501% (4,005 to 24,077). For purposes of comparison, the county's growth was 206% while the state's was 122%. Between 1960 and 1990, the number of owner occupied units in Modesto jumped 309% (8,285 to 33,881).

During the 1990s, the recession and growth slowdown in Modesto have had their effects on both the construction industry and construction in general. From 1990 to 1993, Modesto's share of the permits for new single family construction in Stanislaus County fell from 37% to less than 19%. From 1991 to 1993, the annual number of permits never exceeded 500. While the City's share of county permits for multi-family construction jumped substantially between the two periods (to 64.2% in 1993), the number of city permits dropped below 100 between 1991 and 1993. However, what the permit data reveal is that, over the long term, Modesto has continued to build a substantial percentage of new multi-family units in Stanislaus County.

Affordable Housing Needs

As Modesto's housing market began absorbing Bay Area commuters, prices for both the ownership and rental units escalated, pushing lower income people out of Modesto and into other portions of the County. Even for people not considered low-income, the price increases caused more young adults to remain in their parent's home, since they could not afford to buy or rent a decent home.

Many low income families will endure higher costs for housing. Prices on developed lots have increased from $10,000 to as much as $70,000, and there has been increased pressure to open up more adjacent agricultural land for residential development. Many families are paying up to and sometimes over 50% of their income for housing, even in two-income households.

Modesto family of four with the average median income of $38,500 can theoretically qualify for a $115,000 loan, assuming that they have accumulated the necessary down payments and closing costs. It is difficult for first-time homebuyers to simultaneously pay rent and save for a down payment. As a result, many families (even those with adequate incomes) remain in rental units because of their inability to save or borrow the require down payment. This in turn, tightens the rental market and makes rental housing (the primary supply of housing for low and moderate income people) more expensive and less accessible.

Homeless Needs

The housing needs of those seeking emergency shelter or transitional housing has dramatically increased over the last ten years. The fastest growing population of those in need of shelter are families with children. Factors contributing to the rise in homelessness include rising unemployment, a lack of affordable housing, an increase in the number of people who fall below the poverty level, reductions in public assistance, and de- institutionalization of the mentally-ill. Others in need are homeless persons with drug and alcohol problems, battered women and children, teenage runaways, and evicted tenants.

Public and Assisted Housing Needs

The Housing Authority of the Stanislaus County owns and operates a total of 1,083 dwelling units throughout the county. There are 647 units in the Conventional Low-Rent Housing Program, 356 Farm Labor Program units, and 80 elderly housing units completed in 1994. Within Modesto there are 432 Conventional Low-Rent Units, 91 Farm Labor Program units, and all 80 elderly units. The developments are located on more than 30 scattered sites and range in size from a single unit to 150 units.

Barriers to Affordable Housing

Modesto is fortunate in that ownership housing is, by and large, relatively affordable. The recession of the early 1990's has resulted in a decline in real estate prices. Average sales prices of existing homes peaked in 1991 at $138,480. They have declined continuously since then and in 1993 were at $129,400. The slide in sales prices has continued in 1994 to less than $125,000. In 1994, the median sales price fell over 5% to $109,900.

For low and very low income households there is clearly a lack of supply of affordable rental units, particularly larger units able to house families. There has also been a serious slowdown in the construction of new multi-family units, in part due to the lingering recession. During the period 1987 to 1990, the City averaged 560 new multi-family units per year. For the period 1990 to 1993, the construction rate dropped to 62 units per year. This might also be attributed to an oversupply of rental units and the resultant reluctance of mortgage lenders to finance new or innovative multifamily projects.

Many of the barriers to providing or facilitating the development of affordable housing are not in the City of Modesto's control since they come from other sources. For example, the City cannot control the price of land, which increased in the late 1980s as Bay Area employees discovered the lower prices (comparatively) of Modesto's housing.

The relative cost of renting or buying adequate housing is the primary ongoing constraint to providing affordable housing in the City of Modesto. Construction costs, land costs, labor costs, and market financing constraints are all contributing to decreases in the availability of affordable housing.

Actions by the City of Modesto as well as the state and federal governmental actions can have an impact on the price and availability of housing in the City. Land use controls; compliance to building codes; exaction of development and infrastructure fees, site improvement requirements; and other state and federal programs (such as Article 34) intended to improve the overall quality of housing can actually serve as a constraint or barrier to developing affordable housing in Modesto.

Fair Housing

The issue of housing discrimination in Modesto, like most cities, covers many possible types of bias. Discrimination in housing can cover both rental housing or ownership housing. Tenants seeking to rent housing are the most common victims of discrimination, but there are allegations of persons from affected classes being denied mortgages necessary to purchase housing. Among those most commonly subject to housing discrimination are ethnic minorities, persons on public assistance, families with children, and persons with disabilities including HIV/AIDS.

Lead-Based Paint

Over the past two years, 29 homes in Stanislaus County were reported with lead levels above the acceptable levels. Thirteen of these homes were in the City. The City estimates that 35 housing units will need to be treated for lead-based paint within the next five years. The average cost for treating a lead-based painted house has been approximately $2,775 per unit. Based on this cost factor, it is estimated that it will cost approximately $97,000 to treat lead-based painted housing within the next five years.

Community Development Needs

Under the highest category of need identified were neighborhood revitalization (including all services offered within Target Areas such as mandatory housing rehabilitation, code enforcement, spring clean up, tool bank, infrastructure improvements, etc.); emergency food services; economic development and job training and literacy/English As A Second Language (ESL) services; youth and children services; homeless services and health care. The second category of need included open space acquisition and development; substance abuse; crime awareness; senior services; micro enterprises and cultural assimilation. The remaining needs identified were neighborhood facilities; American Disabilities Act improvements; small business loan program; and transportation services.


Housing and Community Development Objectives and Priorities

Notwithstanding potential cuts in funding from HUD, the City anticipates receiving $ 16 million dollars over the next five years. Priorities for allocating these funds, which have been developed through a cooperative Citizen Participation process, focused on the following areas:

While the actual allocation of funds to specific areas and project will fluctuate from year to year, the majority of funds will be spent in the areas listed above.

Housing Priorities

Neighborhood revitalization is one of the core programs that will be addressed during the next several years. It has represented the bulk of the City's investment of CDBG funds since the inception of the program, and the success of the Neighborhood Revitalization Program and the extent of need in the remainder of the City make it certain that a continuing substantial portion of the City's CDBG program will be focused on Neighborhood Revitalization.

Neighborhood revitalization is a combination of a variety of programs and efforts put forward by the City. Chief among these is the Housing Rehabilitation program. Unlike other cities which operate voluntary housing rehabilitation programs on a widely scattered basis, Modesto has adopted a mandatory housing rehabilitation program for selected low and moderate income neighborhoods. Every house within these neighborhoods is required to be inspected for minimum health and safety purposes and then, if necessary, rehabilitated. Because this is a mandatory program, every property owner in the neighborhood ( not only low and moderate income owners) is eligible to apply for low interest financing of the repairs.

Affordable housing development in the City is largely funded through the HOME program, with smaller amounts coming from CDBG and the Redevelopment Agency of the City of Modesto. HOME funds provide assistance to developers of affordable housing, with priority to the development of rental housing for families. Of secondary importance is assistance to developers of senior housing and for down payment assistance programs. The Redevelopment Agency, with the assistance of the Redevelopment Advisory Committee, has designated the following priority areas in the use of the 20% set-aside funds for affordable housing: rental housing construction; down payment assistance; and transitional housing for the homeless.

Non-Housing Community Development Priorities

The City sought input from various non-profit organizations and other government entities to establish priorities for meeting non-housing community development needs. As a result of this effort the City determined that among the highest priority of community development needs are: emergency food services; economic development and job training and literacy/ESL services (this may include affordable child care and adequate transportation services); youth and children services; homeless services; and health care.

In addition, the City will work with private non-profit agencies who deliver services to low and moderate income people in the community and, in some cases, provide CDBG funding for them. It will also work with other County agencies who are directly involved in the provision of services to low and moderate income people.

Anti-Poverty Strategy

The City will focus on economic development as its chief way of combating poverty. This will primarily include job development and skills training and the provision of incentives to employers to hire local low and moderate income citizens. One of the salient facts about the labor market in Modesto is that many low and moderate income people do not necessarily have the types of skills and training desired by employers. This, in turn, limits the City's ability to attract and retain certain types of employers. As part of its strategy over the next five years, the City will be joining forces with local and potential employers to provide job training services. The City will also entertain proposals from providers of ancillary services such as child care, transportation and ESL to assist in these work and skill training classes.

The City will make a concerted effort to increase and improve the supply of affordable housing through the use of CDBG, HOME and other private and public funds. While the production and preservation of affordable housing on its own cannot raise people's income or lift them from poverty, it does contribute to stabilizing living expenses and helps make life more affordable.

Housing and Community Development Resources

In carrying out the community development efforts identified in the Consolidated Plan, additional funding will be sought or used in order to leverage CDBG and HOME funds. Some of these sources include Redevelopment funds, tax credits, fee waivers and private programs such as private institutions affordable housing financing programs and a wide range of non-profit initiatives.

Coordination of Strategic Plan

The City will carry out the Housing and Community Development program through the Office of Housing and Neighborhoods, a division of the Community Development Department. Another division of the Department, the Office of Business Development, will be responsible for the administration of the Small Business Loan Program and other economic development activities funded by the CDBG program.

The Office of Housing and Neighborhoods will administer the balance of the CDBG program as well as the HOME program. It will also administer the Low and Moderate Income Housing Fund of the Redevelopment Agency of the City of Modesto. Finally, it is responsible for the enforcement of the Neighborhood Preservation Ordinance which deals with blighting conditions in the community such as graffiti, trash, junk, as well as the enforcement of housing and zoning codes.

Oversight for the Housing and Community Development activities of the City is provided not only by the Director of Community Development and the City Manager, but also by a variety of citizen committees that oversee different aspects of the program. The citizen committees are the Neighborhood Advisory Committee, the Citizen's Housing and Community Development Committee, the Economic Development Loan Committee and the Housing Rehabilitation Loan Committee.

During the next five years, the City will be working with, and leveraging CDBG and HOME funds for, a variety of governmental, non-profit and service organizations. By combining resources on projects that directly benefit low and moderate income people, we will be able to magnify the impact of our limited resources. In addition, the City will be working with the other major fund provider for non-profit organizations in the area (United Way) to ensure that we do not duplicate existing services and that the services that are funded are managed in the most efficient manner.


Description of Key Projects

The City of Modesto's FY 1995-96 Action Plan outlines the proposed use of approximately $5.2 million in CDBG and HOME funds, including program income. These funds will be spent mainly on an array of housing activities including:


Roughly 75% of the projects in the One-Year Action Plan are for the provision of services in designated Target Areas. Funds allocated to these areas are spent mostly on housing rehabilitation loans, supportive services and technical assistance. In addition, HOME funds are allocated to developers of affordable housing for eligible projects located throughout the City and are also allocated to the City's Community Housing Development Corporation (CHDO). Public services are provided to all eligible residents living in the City.

Lead Agencies

The City will carry out the Housing and Community Development program through the Office of Housing and Neighborhoods, a division of the Community Development Department. Another division of the Department, the Office of Business Development, will be responsible for the administration of the Small Business Loan Program and other economic development activities funded by the CDBG program.

The Office of Housing and Neighborhoods will administer the balance of the CDBG program as well as the HOME program. It will also administer the Low and Moderate Income Housing Fund of the Redevelopment Agency of the City of Modesto. Finally, it is responsible for the enforcement of the Neighborhood Preservation Ordinance which deals with blighting conditions in the community such as graffiti, trash, junk, etc.

Oversight for the Housing and Community Development activities of the City is provided not only by the Director of Community Development and the City Manager, but also by a variety of citizen committees that oversee different aspects of the program. Several other City departments will be involved in the carrying out various projects funded under the CDBG or HOME programs. These include the Departments of Public Works and Transportation for infrastructure and capital improvement projects as well as some ADA and Section 504 projects; the Department of Parks and Recreation for some capital projects related to parks and/or some youth services; the Police Department for any crime awareness programs; and the Fire Department for fire safety projects. Administrative support services are received from the Finance Department, City Attorney's Office, and the Office of the City Manager.

In order to carry out the identified non-housing community development projects, the City will contract with 17 non-profit organizations. These organizations will provide services including emergency food, homeless services, senior services, and employment and training services.

Housing Goals

The allocation of CDBG and HOME funds include increasing the supply of affordable housing for 228 households through housing rehabilitation, acquisition, and new construction; providing tenant based rental assistance to 85 families, providing emergency or transitional shelter to 24 households, and providing housing counseling and fair housing services to approximately 520 households.


MAP 1 depicts the Modesto vicinity and selected points of interest.

MAP 2 depicts the low and moderate income concentrations within Modesto.

MAP 3a depicts the racial distribution within the City.

MAP 3b depicts the racial distribution within the City.

MAP 3c depicts the racial distribution within the City.

MAP 4 depicts areas of relatively higher unemployment in Modesto

MAP 5 depicts the project area and locations.

For more information on the Modesto, California Consolidated Plan, please call;
Lydia Gonzalez at 209-577-5368.

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California's Consolidated Plans.