California State Treasurer Fiona Ma this month announced data indicating an impressive leap in California’s affordable housing production and preservation efforts in 2020.
According to the California Debt Limit Allocation Committee (CDLAC) and California Tax Credit Allocation Committee (CTCAC), the two committees Treasurer Ma chairs, issued tax-exempt bonds and allocated state and federal low income housing tax credits (LIHTCs) responsible for the production of 19,035 new affordable units and the rehabilitation of 4,736 affordable units in 2020.
“Our 2020 affordable housing production numbers for new construction units represent an astounding 144 percent increase from 2019. This is a major accomplishment during a global pandemic, a period of California’s history during which the need for affordable housing has never been greater,” said Treasurer Ma.
She pointed to the significant contributions to this effort by both Governor Gavin Newsom and Congressman Mike Thompson (D-Napa). Under legislation carried by Rep. Thompson in 2019, California was awarded $98 million of federal nine percent LIHTCs to finance affordable units in 13 counties devastated by wildfires in 2017 and 2018. Additionally, Governor Newsom signed budget legislation in June 2020 that allocated $500 million of additional funding for state LIHTCs for projects financed with tax exempt bonds. Owing to Gov. Newsom and Rep. Thomson’s legislative accomplishments coupled with regulatory reform, Treasurer Ma’s administration allocated bonds and tax credits in 2020 which financed the highest annual number of new affordable housing units in the state’s history.
“Despite the pandemic, 2020 was a blockbuster year for affordable and homeless housing, especially when considering the success of other state housing programs like Project Roomkey, Project Homekey, and No Place Like Home,” said Treasurer Ma.
California’s 2020 affordable and homeless housing victories extended beyond the LIHTC and tax-exempt bond programs, added officials. Last spring, Governor Newsom established two innovative programs using federal Coronavirus Aid Relief Funds (CRFs) designed to provide housing for individuals experiencing homelessness. The first, Project Roomkey, provides temporary non-congregate shelter through the purchase of trailers and the leasing of hotels and motels. To date, Project Roomkey has provided shelter for over 23,000 individuals which accounts for an increase of over 50 percent of California’s previously existing shelter capacity.
The second program, Project Homekey, is administered by the California Department of Housing and Community Development (HCD) and provides long-term, permanent housing through the purchase and rehabilitation of existing structures. In total, Project Homekey utilized $846 million in CRFs, General Fund dollars, and philanthropic investment to purchase and rehabilitate 6,029 critically needed housing units in 94 distinct projects across the state.
Treasurer Ma credited another contributor to 2020’s affordable housing achievements to a second HCD-administered program: No Place Like Home (NPLH). Signed into law in 2016 and approved by voters in 2018, NPLH dedicates bond proceeds towards the investment of permanent supportive housing for individuals experiencing homelessness and chronic mental health illness. Treasurer Ma accepted Bond Buyer’s “Deal of the Year Award” for her November 2019 issuance of $500 million in revenue bonds funding the NPLH program and the critical homeless housing infrastructure it builds. These bonds were marked as “social bonds” owing both to their progressive funding priorities and their main source of payments: tax revenue generated by Proposition 63’s (2004) 1 percent tax on incomes exceeding $1 million. HCD estimates 4,500 units will be produced under NPLH as a result of these bond sales.
“The pandemic is scary enough for those who have a place to isolate safely, but we’re not all so fortunate,” said HCD Director Gustavo Velasquez. “As a result of both Homekey and No Place Like Home, Californians and communities that previously lacked resources and investment now have a path forward toward opportunity and resiliency. As HCD continues to administer these critical programs, we are also working in partnership with CDLAC and CTCAC to ensure the state’s funding programs align in a way that makes it easier for cities, counties, and developers to build affordable homes to move us toward a ‘California for All’.”
“None of 2020’s affordable and homeless housing successes would have been possible without the historic alignment we’ve achieved between California’s four sister housing agencies,” Ma said.
This goal of increased alignment has been a centerpiece of Ma’s administration and was facilitated in large part through a regulatory reform process for CTCAC and CDLAC that concluded during 2020. These reforms and the increased alignment have enabled CDLAC, which provides bond allocation for the four percent LIHTC applicants, to increase the number of affordable housing projects it finances by over 70 percent since 2017.