Housing advocates throughout California gathered in Los Angeles on February 26 as State Assembly Speaker Toni Atkins (D-San Diego) unveiled a legislative package to address the state’s increasing housing affordability problems. A core component of the package is a proposal to expand the state’s Low Income Housing Tax Credit (LIHTC) program by $300 million per year. This component builds on Assembly Bill 35, authored by Assemblymember David Chiu (D-San Francisco) and developed in partnership with the Non-Profit Housing Association of Northern California (NPH), an NLIHC State Coalition Partner. Other elements of the legislative package include a $75 fee on real estate-related document recordings to be dedicated for affordable housing, a bill to direct how the state will use National Housing Trust Fund (NHTF) allocations, and an effort to reduce homelessness among formerly incarcerated Californians.
The proposed $300 million expansion of California’s LIHTC is a significant increase from the current tax credit ceiling of $75 million. The state tax credit, administered by the California Tax Credit Allocation Committee, augments federal LIHTC allocations. To be eligible for state tax credits, a project also must have received or be receiving federal tax credits. Projects using state tax credits must set aside either 40% of all units for households with income at or below 60% of area median income (AMI), or 20% of all units for households with income at or below 50% of AMI. According to the California Housing Partnership, also an NLIHC State Coalition Partner and a consultant on the tax credit expansion plan, the additional $300 million would leverage $600 million in private investment for affordable housing projects each year.
The proposed $75 document recording fee will provide an ongoing, dedicated source of revenue outside of the general fund to support California’s housing programs, such as the tax credit expansion. The fee will apply to property transfers, excluding home sales, and is projected to generate $300 million to $700 million annually.
Assembly Bill 90 designates the California Department of Housing and Community Development (HCD) as the state agency responsible for administering federal NHTF allocations. The bill would require HCD to post their plans for use of NHTF resources within 30 days of the initial receipt of funding. The bill also states that up to 10% of NHTF funding received may be used by the CalHome Program for affordable homeownership activities, as allowed under federal statute and interim HUD rule.
A proposal to reduce recidivism of ex-offenders through rapid rehousing would be funded through budget savings realized by enactment of Proposition 47. Approved by voters in November 2014, Proposition 47 reclassifies numerous felonies related to drugs and property as misdemeanors, thereby reducing the incarcerated population and saving hundreds of millions of dollars that are spent on corrections each year. The California Department of Corrections reports that at any given time 10% of the state’s parolees are homeless. Therefore, advocates are pushing for the legislative package to ensure that housing and supportive services are available for ex-offenders.
According to Speaker Atkins, annual state spending on affordable housing dropped to $340 million in 2014 from more than $1 billion just four years ago. State Treasurer John Chiang has set affordable housing production as one of his top priorities. At the announcement of the bill package, Treasurer Chiang noted that California is home to 13 of the 14 least affordable metropolitan housing markets in the nation.
Advocates are hard at work inside the Capitol and beyond, engaging coalition partners and allies to push for passage of the legislative package. The mayors of the state’s 11 largest cities have publicly announced their support, along with key business groups such as the Los Angeles Area Chamber of Commerce, the Silicon Valley Leadership Group, the Orange County Business Council, and the Bay Area Council.
“We are very grateful for Speaker Atkins’s and Treasurer Chiang’s strong leadership,” said Michael Lane, Policy Director at NPH. “The entire affordable housing community and our allies are rallying around this effort to pass these bills that will provide desperately needed funding and begin to allow our state to address our drastic affordability crisis that is impacting so many lower income residents,” said Lane.
For more information, contact Michael Lane, Policy Director, at firstname.lastname@example.org.