California cities have millions for affordable housing. The difficulty is to spend it

As California cities receive more government money than ever for affordable housing, many are struggling to get projects off the ground.

OAKLAND, Calif. (CN) — Affordable housing is a priority nationwide, but a demand crisis in California has experts wondering how cities will navigate an increasingly costly and time-consuming system to improve housing. ‘offer.

“If housing prices are high and no one comes to you with a proposal, you’re probably sending the message that you’re not adjusting to development,” says UCLA housing researcher Mike Manville. He’s one of many experts who say California cities may have heaps of money to spend building affordable housing, but need to make strategic policy changes if they’re serious about tackling their housing crises.

California is unique because cities in need of affordable housing rely heavily on competitive federal and state funds. City leaders can apply for funding from the Community Development Block Grant program — which provides housing grants each year — or allocated by the governor, depending on the projects they want to build. They also compete by demonstrating why and how they will meet the housing need in their community. The Legislature also recently freed up hundreds of millions for affordable housing projects that meet certain criteria, adding another level of competition as the housing crisis deepens.

Some cities in the San Francisco Bay Area are pursuing aggressive policies to create affordable housing, battling a growing affordability crisis and historically exclusionary policies.

The Oakland City Council has approved approximately $60 million in public funding for affordable housing projects and $15 million from annual funding sources. The council recently voted to also seek $200 million in state affordable housing grants.

A chart showing the number of funding sources used is an example of how much funding comes together in an affordable housing proposal to be able to use state dollars – in this case, Oakland’s Homekey project proposal. (City of Oakland/Courthouse News)

Housing and Community Development Director Shola Olatoye said the city has received about $322 million from the state since 2020. In two years, the city has raised about $1.8 billion with the money from state and county, tax credit bonds and private loans. The city also discussed a ballot measure asking voters whether the city should seek $850 million to create public housing and improve city streets and facilities.

San Francisco has received at least $449 million in public funding for affordable housing since June 2021, housing department spokeswoman Anne Stanley said.

She said the city has streamlined how affordable building proposals move through the system, with requirements for developers to designate certain units as below market — or pay fees or dedicate land to housing.

A graph shows how the rate of housing construction in San Francisco is disproportionate across income levels, building more than the necessary number of homes priced for one income level, but well below the amounts needed for a range of lower income levels. (City of San Francisco/Courthouse News)

Sacramento passed a housing trust fund using affordable housing funds from a budget surplus. Community development spokesperson Kelli Trapani said the city invested $31.5 million in 2020 for 644 units that began taking shape in July.

“These resources have helped projects secure the financing needed to begin construction sooner and be more competitive for state and federal resources,” Trapani said. The city has also added policies to encourage the creation of “naturally affordable” housing, where new construction drives prices down.

This is a common approach also seen in San Diego. Housing Commission Vice Chairman Scott Marshall said by email that more than 2,000 affordable homes were green-lighted for funding last year, with about $16 million identified for more affordable rentals. .

Experts say that while these are good steps, the major question will be how quickly new housing will appear with limited land available for traditional public housing.

Ryan Finnigan, senior research associate at the Turner Center in Berkeley, said research supports the creation of housing at all price points to relieve pressure by opening up older housing. Cities must combine new housing with strong tenant protections to reduce the displacement of lower-income people than those moving in.

But in the Bay Area, resistance is high from residents who want their communities to look the same as they always have.

“Wherever you are, there will be someone who doesn’t want affordable housing,” Finnigan said, adding that local affordable housing debates seem to focus on finding a single “optimal strategy” – leaving many proposals dead in the water.

Bernard P. Love