CHC Industry Insight

Industry Insight - April 2021

Note from the Executive Director

Even as COVID numbers improve and many parts of the state have started to slowly reopen schools and businesses, things are still not quite back to normal in the Capitol, where the legislative session remains mostly virtual and our work continues to be done from a distance. One thing does feel familiar, though, as policy committees have begun to consider bills ahead of their April and May deadlines—including more than a dozen affordable housing bills supported by CHC.

This legislation includes several major proposals we’ve highlighted before—including a bill seeking to open some commercial sites to affordable development (AB 115, Bloom) and a new approach for helping local governments maintain progress toward their RHNA targets (AB 215, Chiu).

A number of other noteworthy bills are being taken up in the next few weeks as well, from AB 411 (Irwin, Chiu), a $600 million bond to extend funding for the Veterans Housing and Homeless Prevention program, to an innovative new tax credit incentive program in AB 1516 (Gabriel) that aims to encourage owners of at-risk properties to sell to affordable housing providers. After a year that has reminded us all of the importance of access to high-speed internet, the Legislature is also considering a number of new broadband infrastructure investments, including AB 1425 (Gipson), a bill that would fully fund the state account supporting broadband infrastructure in affordable housing.

We continue to work with lawmakers and staff—from a distance—to ensure these ideas will be useful tools for affordable housing providers. And we look forward to a day hopefully not too far in the future when we can do this work with you all in person once again.

Until then, be safe and stay healthy.

Sincerely,

Ray Pearl

Executive Director

In Case You Missed It

CHC's sponsored bill AB 115 (Bloom), which would allow residential development on certain commercial sites, will be heard this afternoon in the Assembly Committee on Housing and Community Development. Please submit support letters via the Legislature's online portal.
CHC is also sponsoring AB 215 (Chiu), which would create a new checkpoint partway through the eight-year RHNA cycle for the state to assess how close cities are to meeting their housing production targets—and intervene if needed.
State Senate Democrats released their "Build Back Boldy" budget priorities, which outlines their vision for using tens of billions of available one-time and ongoing General Fund revenues and federal American Rescue Plan funds. Included is $20 billion over 5 years to combat homelessness.
Major new investments in affordable housing—and the Low Income Housing Tax Credit, in particular—were included in the Biden Administration’s $2.25 trillion infrastructure proposal. The Affordable Housing Tax Credit Improvement Act is also expected to be released today! More below from David Gasson.
Applications opened last month for the first $2.6 billion of federal renter relief funds passed in December as part of the COVID stimulus bill. The program, which is open to both tenants and landlords impacted by the pandemic, allows qualified applicants to receive 80% of unpaid rent from April 1, 2020 to March 31, 2021. HCD has created a website with information about eligibility and applications. The $1.9 trillion COVID relief bill passed in March is expected to bring an additional $2.2 billion in renter assistance funding to California.
CHC partners Housing California and the California Housing Partnership launched their Roadmap Home 2030 campaign, promoting a 10-year suite of policies that seek to create 1.2 million affordable homes, protect more than a million renters form losing their housing, and fund housing and services for people experiencing homelessness. Follow the campaign @RoadmapHome2030.

Federal Update with David Gasson, Housing Advisory Group

It is finally Infrastructure week, month, and, more than likely, the year of Infrastructure. The Biden Administration has come out with the American Jobs Plan (AJP), which is an odd name for a package that includes so many sectors of economic development. Nonetheless, for housing advocates and practitioners this has the potential to be the single greatest investment in housing in a generation.

The AJP proposes spending in the neighborhood of $2.25 trillion, including $213 billion for housing. From what we know so far, the plan would:

• Produce, preserve, and retrofit more than a million affordable, resilient, accessible, energy efficient, and electrified housing units through targeted tax credits, formula funding, grants, and project-based rental assistance.

• Build and rehabilitate more than 500,000 homes for low- and middle-income homebuyers through passage of the Neighborhood Homes Investments Act (NHIA).

• Eliminate exclusionary zoning and harmful land use policies through a new competitive grant program that awards funding to jurisdictions that take concrete steps to eliminate barriers to producing affordable housing.

• Address longstanding public housing capital needs through a $40 billion investment to improve infrastructure of the public housing system.

• Upgrade homes through block grant programs, the Weatherization Assistance Program, and through extensions and expansions of home and commercial efficiency tax credits.

• Establish a $27 billion Clean Energy and Sustainability Accelerator to mobilize private investment into distributed energy resources; retrofits of residential, commercial and municipal buildings; and clean transportation.

At this point we are unsure what the administration is referring to by "targeted tax credits" but we have a meeting with the staff of the Domestic Policy Council and the National Economic Council to discuss the soon-to-be-re-released Affordable Housing Credit Improvement Act (AHCIA) and at that meeting we hope to get more information on the President’s proposal. Regarding the size of the AJP, congressional staff we have met with consider the President’s proposal conservative. Yes, the $2.25 trillion is low balling what we expect to come out of the House and Senate in regard to infrastructure and recovery programs. Democrats are going big and it would not surprise me to see a final price tag in the area of $3.5 trillion with housing spending in the area of $400 billion or more.

Speaking of the AHCIA, we expect the bill to be reintroduced later today. The new version will include the 50% increase in the 9% allocation over two years and a reduction of the 50% test, likely to 25%. There will be around 27 provisions in all and this time around, with the enthusiasm around a big infrastructure bill, I expect much if not all of the bill to be included in the final package. Senator Wyden is assembling a significant housing package which will likely include his Middle-Income Housing Tax Credit, potentially an increase in the PAB volume cap, a tax credit focused on providing services at LIHTC properties and much more. There will also be housing proposals coming from other members of the House and Senate. As I said previously, this final package could signal a generational change in housing policy and resources.

It is a very exciting time in Washington, this time for the right reasons. Your affordable housing advocates are at the center of the creative process in Congress and the Administration working to expand resources for production. More to come so stay tuned and get ready to advocate.

Affordable Housing in the News

This month in affordable housing news saw applications open for the first $2.6 billion of federal renter relief funds approved by Congress in December—along with several editorials in major papers on the state’s next big affordable housing challenges. HCD has created a helpful website with information on relief fund eligibility and applications, and HCD deputy director Geoffrey Ross told the San Jose Mercury News the state is expecting “potentially one million” renters to apply for the funds—with the department receiving more than 120,000 applications totaling $367 million worth of assistance in the first two weeks of the program. California will receive an additional $2.2 billion of relief from the COVID stimulus package signed in March.

As the state continues to look for ways to support lower-income Californians struggling to find affordable housing, the Los Angeles Times editorialized on what must be done next to reduce the steadily rising homeless population. In an aptly headlined piece, Want to lower the number who are homeless? Prevent people from falling into homelessness, the Times noted that LA “need[s] more permanent housing, and we need it faster,” along with a more robust set of “prevention measures” to help people avoid homelessness in the first place. As building permits continue to fall behind last year’s pace—another sign of an unhealthy housing market—a San Francisco Chronicle editorial warned of the Legislature’s ongoing “uphill battle against California’s housing construction bust.” The Chronicle highlighted the CHC-supported AB 215 (Chiu) as one of only a handful of bills this year that could effectively encourage more affordable housing production.

CHC Spotlight Member

CHC Member: McCormack Baron Salazar

Project Name: Marisol Village

Location: Sacramento, CA

Units: 487

Opening Date: Spring 2022

State & Federal Financing Sources: U.S. Housing and Urban Development, California Tax Credit Allocation Committee, California Debt Limit Allocation Committee, California Department of Housing & Community Development, California Strategic Growth Council, California Department of Developmental Services, Sacramento Housing and Redevelopment Agency, Housing Authority of the County of Sacramento, and Housing Authority of the City of Sacramento

“The River District is transforming from a declining industrial area into one of the largest mixed-use infill opportunities in the country,” said Dan Falcon, Managing Director, McCormack Baron Salazar. “Mirasol Village will be everything a neighborhood should be – walkable, safe, affordable – and, with a new Light Rail stop located across the street, close to transportation.”