Monday, March 23, 2020

New Report Finds California Needs 1.3 Million More Affordable Homes; Calls for Federal and State Action

CALIFORNIA, March 23, 2020 -- COVID-19 has only added to the incredible hardships facing low-income Californians, particularly for those without access to adequate shelter. The California Housing Partnership's 2020 California Affordable Housing Needs Report  underscores why now more than ever our federal and state leaders must come together to address the housing needs of our lowest income and most vulnerable neighbors who are key pillars to keeping our economy and communities strong.  
This year's state report finds that while California has made some progress in stabilizing our affordable housing shortfall, we still need 1.3 million more affordable rental homes. 
Other findings from the report make clear the need for urgent action now:
  • 79% of extremely low-income (ELI) households are paying more than half of their income on housing costs compared to just 0.4% of above moderate-income households.
  • Median rent in California has increased 40% since 2000 while median renter household income has only increased by 8%, when adjusted for inflation. 
  • Renters need to earn 2.9 times the state minimum wage to afford the average asking rent in California.
  • Low-Income Housing Tax Credit housing production and preservation in California declined by 13% overall from 2016 due to federal tax reform.
  • When housing costs are considered, California's poverty rate rises by 34%.

"Despite the 2017 housing package and recent positive efforts by the Governor and Legislative leaders, state investment in affordable home production and preservation remains well below 2012 levels, undermining our progress in addressing homelessness and meeting the needs of our working families," says Matt Schwartz, President and CEO of the California Housing Partnership, "which is why we and our advocacy partner, Housing California, have begun California's Roadmap HOME 2030 to develop and implement a 'Marshall Plan' for statewide housing and homelessness solutions." 

For more information, visit the  Roadmap HOME website.

The California Housing Partnership calls on Congressional leaders to pass a COVID-19 stimulus package containing the following elements:
  1. $10 billion to expand the Housing Choice Voucher program with a priority on providing Housing Authorities with the resources both to: 1) keep existing tenants housed who are losing income due to COVID-19, and 2) helping create new affordable homes for those most impacted through the project-basing of some portion of these vouchers.
  2. $10 billion for the HOME Program, with a priority for creating and preserving housing for those with very low and extremely low incomes who are most affected by both the short and longer-term effects of COVID-19.
  3. Designate half of the proposed $10 billion in CDBG funding to support nonprofit housing providers struggling to keep their residents housed while also advancing their pipelines of critically needed new affordable homes.  
  4. $10 billion to re-fund the Tax Credit Assistance Program created by ARRA to fill the hole created by major banks who are citing COVID-19 and now refraining from new investments and loans in affordable home production, creating conditions that, without federal intervention, could become as damaging as 2008-9.
  5. Reconstitute the Tax Credit Exchange Program created by ARRA to allow the conversion of LIHTC allocations to loans to ensure continued liquidity in the low-income housing production markets as banks pull back on making new LIHTC investments. 
  6. Address the shortage of tax-exempt bonds, which is being worsened by COVID-19 delays in construction and completion, by: 1) creating an exemption for all affordable housing from the private activity bond cap, or 2) reducing the tax-exempt bond 50% test to 25%.
  7. Set the floor for the LIHTC 4% rate at 4% now before the rate drops any further than it already has (3.12% and falling), to prevent undermining the financial feasibility of tens of thousands of affordable homes in the pipeline.
  8. Allow limited partnerships to estimate LIHTC and amend returns with 8609s issued to avoid the loss of credits due to the inability to amend returns caused by the 2017 tax law changes.
  9. Extend LIHTC deadlines per the ACTION Coalition letter.
Additionally, the California Housing Partnership calls on state leaders to take the following actions in 2020:
  1. Make permanent the $500 million annual increase to the California Low-Income Housing Tax Credit Program to jump-start affordable housing production and provide an additional $100 million annually to rehabilitate existing affordable rental properties.
  2. Create a new Affordable Housing Preservation Tax Credit to preserve existing affordable housing at risk of conversion and to fight displacement pressures.
  3. Allow affordable housing to be built by right on land currently zoned for commercial or public uses and on church-owned lands. 
  4. Streamline Department of Housing and Community Development rental housing funding programs through a single application and award process to reduce development costs.
  5. Reduce the threshold for voter approval of local funding of affordable housing and infrastructure from 67% to 55% as was done for educational facilities in 2000. 
  6. Exempt supportive housing and affordable housing funded by MHP, HOME or CDBG from CEQA reviews.
View the  full report online.
To learn about affordable housing legislation currently being sponsored by the California Housing Partnership, visit our website.
For questions about the policy recommendations contained in this report, please contact Mark Stivers (, Director of Legislative and Regulatory Advocacy or Matt Schwartz (, President and CEO.

About the California Housing Partnership
The  California Housing Partnership creates and preserves affordable and sustainable homes for Californians with low incomes by providing expert financial and policy solutions to nonprofit and public partners. Since 1988, the Partnership's on-the-ground technical assistance, applied research, and legislative leadership has leveraged more than $20 billion in private and public financing to preserve and create more than 75,000 affordable homes.