It’s December in Sacramento, the start of the holidays—and the unofficial beginning of budget season, when the administration puts the finishing touches on its January budget proposal.

CHC has joined with our partners in a letter outlining the steps that must be taken to ensure next year’s budget continues to close the state’s shortfall of 1.4 million affordable homes (more on that below).

This year, we’ve also made an urgent request to Treasurer Fiona Ma, requesting swift action on a related issue: a growing state bottleneck preventing billions of dollars already approved by voters—and included in the current state budget—from being used to quickly support affordable development.

In a letter delivered yesterday, CHC and a group of affordable housing and homelessness advocates jointly asked Treasurer Ma to allocate $4 billion of its private activity bond volume cap this year to affordable multi-family housing.

As affordable housing developers, we know how serious this issue has become: Thanks in large part to the success of our own advocacy over the last few years, the state has begun to direct substantial resources toward addressing the housing crisis—with voters approving $6 billion in funding through Propositions 1 and 2 and the Governor and Legislature adding $2 billion for affordable housing and homelessness programs in the 2019-20 budget, along with a $500 million expansion of the state Low Income Housing Tax Credit.

In order to access these new funds, however, affordable housing projects must also receive an allocation of private activity bonds. And for the first time in 15 years, the state has an insufficient amount of private activity bond volume cap to meet the demand.

This is the crux of our request to Treasurer Ma: While the existing state cap is just over $4 billion, CDLAC is estimating overall demand for all uses of about $10 billion this year. At least $4 billion is needed to pair with current state-funded affordable housing programs and to ensure all of the recently approved resources can be used to quickly and efficiently produce new affordable units.

We’ve asked Treasurer Ma to take immediate action to expand the affordable housing allocation—noting that a larger allocation will not only allow thousands of shovel-ready units to access new state funds, it will also allow more projects to tap additional federal resources. Unlike other uses of private activity bonds, every dollar used in an affordable housing development leverages at least 50 cents of additional federal funds. 

We are looking forward to partnering with the Treasurer on this request over the next few months. And while we work to move existing state resources out faster, we will also be encouraging the Governor in next year’s budget to consider bigger, transformative solutions that will provide the stable financing foundation the state needs to address its housing crisis. Read more about CHC and our partners’ 2020-21 budget proposals here.

CHC certainly recognizes the more resources the state brings to bear on its housing challenges, the more pressure will be exerted on the existing financing system. That will require us to be even more active and engaged in Sacramento—as well as at the federal level, where our advocacy will be more important than ever. Thank you for your support, and stay tuned for more updates after the holidays.

Sincerely,

Ray Pearl
CHC Executive Director