CHC Industry Insight

Industry Insight - June 2020

*Special Statement from the California Housing Consortium*

“If you are neutral in situations of injustice you have chosen the side of the oppressor.” - Desmond Tutu

Below you will find our usual monthly work update. Our efforts to increase access to affordable housing for our state's most vulnerable residents not only continue, but are even more pertinent.

During these turbulent times, when so many are protesting to highlight our country’s ongoing struggle with social justice and racial inequality, we take seriously our responsibility to stand with and support those who have suffered from systemic racism, violence, and inequity for too long.

In a recent trip to the African American History Museum in Washington DC, at the end of the visit I found myself at the waterfall fountain in the Contemplative Court. A quote from Nelson Mandela on the wall held my attention:

“I cherish my own freedom dearly, but I care even more for your freedom.”

For me, now is the time to listen, learn, and find new ways to partner and ally with the communities we serve. May the memory of George Floyd, and, sadly, countless others, be a true catalyst for real change.

Sincerely,

Ray Pearl

Executive Director

Sacramento Update

As CHC remains committed to preserving and protecting affordable housing for vulnerable Californians and as we enter the critical, final stretch of budget season in Sacramento, I want to thank you for all you have done to support these efforts during these uncertain times.

We are all in this together, and only together can we guide a statewide economic recovery that prioritizes affordable housing — and equitable access to opportunity in every community —for lower-income Californians who need it most.

This has been CHC’s focus since March 13, when the state began to shut down in response to the coronavirus outbreak, and it is worth taking a moment to note what we have accomplished together.

During those first few weeks of this crisis, when uncertainty and confusion were at their peak, CHC submitted detailed letters to the Administration and Treasurer requesting extensions of tax credit and bond-related deadlines and sharing our recommendations for state action to support affordable housing through the emergency. HCD and CalHFA responded with guidance that has assisted our members on issues from compliance to managing mortgage payments.

CHC has also been actively working to keep affordable housing front and center amidst the broader state and federal response to this crisis—from our detailed Keep California Housed proposal for keeping struggling renters stably housed to the Affordable Housing and Homelessness Framework we’re advancing with 10 other California affordable housing and homelessness advocacy organizations.

We saw the result of this work in budget proposals from the Governor, Senate, and Assembly that maintain significant funding for affordable housing , and we continue to move ahead with legislation that will allow affordable housing to power the state’s economic recovery. We've made sure CHC's ideas are being heard— and we are getting noticed .

None of this work is finished, of course—and we will continue to advocate in Sacramento, Washington DC, and elsewhere for increased access to affordable housing .

Thanks to your efforts, we are well positioned to do just that—and we hope you will consider renewing your commitment to the work we are doing together .

In Case You Missed It

CHC's sponsored bill, AB 3107 (Bloom), which would authorize affordable housing development in commercial zones, passed out of Assembly Appropriations Committee this week and will now head to the Assembly Floor to be voted on sometime over the next two week. If you haven't already, please submit a support letter:
Sample letter
Email to Marina or submit online

After the Governor released his May Revision to the budget, the legislature released their joint budget proposal, which, among other things:
Exempts state LIHTCs from the Governor's proposal to cap annual business credits at $5 million for 3 years
Maintains the Governor's proposal to allocated an additional $500 million in state LIHTCs in 2021
Rejects cuts to other affordable housing funds recommended by the governor's budget and also devotes additional money to fighting homelessness

CHC joined state and regional partners to release a new Affordable Housing and Homelessness Framework.

The Senate released a housing production legislative package.

Our annual May Policy Forum and Housing Hall of Fame Awards has been postponed to September 2.

Affordable Housing in the News

This month in affordable housing news, all eyes are on how the state, with revenues down more than $54 billion, will build a final budget for the next year by the June 15 deadline. Unemployment claims in California have climbed past 5.4 million during the COVID-19 emergency , and the state Department of Finance is projecting jobless levels will climb to 18% this year —increasing demand for services at the same time the state is facing a deficit that is 37% of last year’s General Fund. Governor Newsom released a revised May budget that included no new spending, maintained substantial support for affordable housing , and proposed $14 billion in trigger cuts to everything from schools to health care and the safety net if Congress does not pass another stimulus package.

Two weeks before the deadline for passing the budget, the Senate and Assembly have agreed on their own proposal —refusing to accept the Governor’s trigger cuts and proposing instead to delay cuts instead, while increasing state borrowing. While the Legislature and Administration have time to work out their differences, with many tax deadlines extending into this summer, the state revenue picture may remain unclear well past June 15. As the Los Angeles Times recently put it : “If there is consensus on anything at this stage of budget discussions in Sacramento, it’s that the spending plan enacted before July 1…is likely to have a short shelf life.”

Federal Update from David Gasson, Boston Capital

There is an old saying in politics that two things you never want to see made are laws and sausage. In these days of home cooks and closet chefs, I am certain I am not the only person amongst us that has played a role in both processes. To be honest I enjoy both and the current process (law making), for obvious reasons, is a unique challenge.

We came up short in the House HEROES Act but not for a lack of effort. In our post-passage calls with staff for Ways and Means they acknowledged we made a compelling case that as the only federal tax credit that is tied to federal borrowing rates, the 4% LIHTC was a direct victim of the COVID-19 economic downturn and thus received serious consideration. Nonetheless, we were not going to be the only industry specific federal tax credit addressed in that package. That said we have been assured our LIHTC agenda is foremost on their list of priorities.

Fortunately the Senate has not, thus far, set the same parameters and thanks to Senator Ron Wyden (D-OR) we have a placeholder of sorts on the table as negotiations begin. As Ranking Member of the Senate Finance Committee, Senator Wyden’s LIHTC proposal carries weight and we are working to expand bipartisan support with his colleagues. Our goal remains fixing the 4% LIHTC rate but if we can get other provisions from the AHCIA included all the better. Based on comments from Senator Charles Grassley (R-IA), chairman of the Finance Committee, we may have to settle for a temporary fixed rate as they seem reticent to accept any permanent tax provisions. This is a prospect we are accustom to as it is the same scenario under which we secured the first fixed rate 9% LIHTC back in 2008. As we all know, the permanent 9% fixed rate was passed in 2015 in the PATH Act. No matter the circumstance we are diligently working to include the 4% fixed rate in the Senate package which we hope will come together over the next several weeks.

We are very appreciative of CHC’s efforts in the House and Senate on our shared affordable housing agenda and ask that you keep up the advocacy. We always find a way to win when the grassroots are mobilized.

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Save The NEW Date For

CHC's 2020 Policy Forum &

California Housing Hall of Fame Awards