February Update

The Latest News

February| 2022

Letter from the CEO

To Our Clients and Colleagues:

As we celebrate the Lunar New Year and begin Black History Month, we reflect on strength, wisdom, and courage around us. The Year of the Tiger is said to be a year of reviving enthusiasm and making progress—both important as we emerge from another COVID-19 surge, advance solutions for housing and homelessness, and embark on a new legislative season.

Federally, one significant change we may soon see this year is the appointment of the first African-American woman to the US Supreme Court—a commitment Biden made last week after Supreme Court Justice Stephen Breyer announced his retirement.

HUD Secretary Marcia Fudge, the second African-American woman to lead the agency after Patricia R. Harris was appointed in 1977, stepped into her role with deep experience, leadership, and the promise of change. She noted a one-time opportunity to “make some major changes and very quickly" to address historical morale challenges facing the agency.

And while progress at the national level has stalled with Build Back Better Act (BBB) and its historic $150 billion investment in the nation’s housing programs, discussions are ongoing about the housing programs that will remain in a scaled-down version of BBB and others that will move forward separately. More work will be needed by all of us to keep housing as a priority for funding this year.

Overall, last year was a good year for housing in California, with a significant infusion of new funding for housing and homelessness efforts and the passage of key bills that created new programs and resources, streamlined development, and increased accountability for meeting local housing needs. Looking forward to 2022, we are crossing our fingers for more progress, though we may not see transformative action given that it is an election year. Yet the Governor’s January budget proposal did include positive news, with a new two-year commitment of $4 billion for housing and homelessness programs.

In this month’s newsletter, we provide more detail on the programs included in the Governor’s budget proposal and the status of federal housing funding, a new fund and a new bill that takes on the challenges of student housing, key highlights of a new report from Harvard on America’s Rental Housing 2022 , as well as some regional news – including the SANDAG Housing Pipeline Request for Information due February 18, 2022.

We look forward to working with you throughout the year to make housing and homeownership accessible and affordable for all.

Sincerely,

Jennifer LeSar

President & CEO

LeSar Development Consultants

Legislative Update

Governor Newson’s Budget Proposal Continues Investment in Housing and Homelessness

In January, Governor Newsom revealed his budget proposal, coined “The California Blueprint,” which sets out his plans for State spending in Fiscal Year 2022-23. With $286.4 billion available—a 9.1% increase over last year—the budget includes significant surplus funds that allow for new one-time investments in key areas.

The Governor laid out budget themes, including COVID, climate change, and public safety, but also two that center on housing—confronting homelessness and tackling the State’s housing crisis.

While the budget proposal includes a new two-year commitment of $4 billion for housing and homelessness, a large investment greater than most years past, the amount is smaller than the $16 billion in new spending allocated in FY 2021-22. Read More. . .

Governor Newsom visits behavioral health and transitional housing facility in Los Angeles County.

California is Making Waves to Address Student Housing Needs: A New $5 Billion Fund Introduced

Last week, Assemblymember Kevin McCarty (D-Sacramento) introduced a bill to create a $5 billion fund for student housing development that would supplement the $2 billion in funding created last year for the California Higher Education Student Housing Grant Program.

The bill, AB 1602, would create an interest-free revolving loan fund using one-time funding to provide financial assistance to public colleges and universities. The funds, which would be used to build new units or demolish old units and renovate existing dorms, would need to be paid within 30 years from rent collected from students. It is estimated that this new fund could house more than 21,000 students. The bill will begin to move through the legislative process and is expected to first be heard in the Assembly’s Committee on Higher Education in March. Read More. . .

State Capitol News: New Assembly Housing Chair Announces Her Priorities

With Assembly Housing and Community Development Committee Chair David Chiu stepping down to serve as San Francisco’s City Attorney, Assembly Speaker Anthony Rendon appointed Buffy Wicks (D-Concord) to serve as the new Assembly Housing leader.

Assembly Member Wicks laid out her priorities for the year—housing accountability, rent relief, and homelessness—during recent appearances. Given that this is an election year and last year was a banner year for housing legislation, the Assembly Member indicates she does not see any major bills being introduced this year. Yet, issues that have challenged the success of key bills in the past, such as labor, are top on the list for resolution.

Many of the ideas likely to receive attention in the Assembly this legislative year come from a Housing Listening Tour organized in cities throughout the State during the legislative break by the newly formed Assembly Housing Working Group. Check out the report that summarizes the results of those efforts.

Federal Housing Briefs

The fate of the Build Back Better (BBB) continues to be uncertain. At the same time, House and Senate leaders are negotiating a final spending bill that allocates funding to agencies for the next year.

Here are two briefs summarizing housing investment priorities at risk in BBB and the status of the federal funding plan. Read More. . .

New Reports Released

The Joint Center for Housing Studies at Harvard just released a report called America’s Rental Housing 2022 to highlight the state of housing in the nation. Key findings included:

Rents have jumped back up following a drop at the beginning of the pandemic.
Vacancy rates are at 5.8%, the lowest since the mid-1980s.
Lower income renters of color were the most likely to have fallen behind on rent during the pandemic.
Evictions have not been as numerous as was initially anticipated, likely due to the infusion of Federal rental assistance.
Higher income families are leading the growth in renters, accounting for nearly 70% of the renter household growth between 2009 and 2019.
36% of America’s renter households make less than $30,000 a year.

With the recent push to make it easier to convert non-residential development to affordable housing and significant allocations of new funding for programs like this, the Terner Center for Housing Innovation released a timely report in December called Addressing Homelessness Through Hotel Conversions. The report outlines the challenges and solutions to using hotels and motels as permanent housing for the homeless. Key conclusions in the report included:

An expansion of project-based vouchers or other revenue sources are critically needed to ensure the long-term operation of hotel/motel converted properties.
Hotels and motel conversions should be streamlined, with discretionary review and elimination of other barriers.
Funding and technical assistance is needed for organizations seeking to convert buildings as well as for tenancy support services.

Regional News

Helping Jurisdictions Leverage New Homekey 2.0 Funding

Homekey is back in 2022 and bigger than before, thanks to substantial funding from the American Rescue Plan Act (ARPA). The program has become the backbone of the Governor’s strategy to provide lasting solutions to homelessness: the FY 21 State Budget allocated $2.75B in ARPA and State General Funds towards a second and third round of Homekey.

Recently, Governor Newsom announced $45M in awards for two new Homekey projects in Sacramento and Los Angeles that will make 170 units available. Including these new awards, a total of $323 million has been awarded through the Homekey program for 1,208 units in 14 projects across the state. Read More to learn about Homekey and LeSar’s engagement with the program.

SANDAG: Building Out the Region’s Housing Pipeline

SANDAG announced a Request for Information (RFI) last week to build a pipeline of known housing development projects that will be in construction within the next five years in the San Diego region.

This initiative is part of SANDAG’s Regional Early Action Planning (REAP) program to accelerate housing, equity, and climate goals in the region. With this RFI, SANDAG seeks to better understand the status of housing development in the region and identify investment needs and opportunities to align with the newly adopted San Diego 2021 Regional Plan. Responding to the RFI does not guarantee any funding or technical support; however, projects submitted for the RFI does ensure that the developers are notified of any future funding or other opportunities.

Projects representing all models of housing are requested, including rental and homeownership projects that are affordable to low- and moderate-income households. RFI Written Questions are due on Wednesday, February 16, at noon (Pacific Time) but answers will be provided on a rolling basis, and the Housing Pipeline RFI responses are due on Friday, February 18, 2022. Read More. .

BAHFA Announces Kate Hartley as its New Director

The Bay Area Housing Finance Authority (BAHFA) just named its first Director to lead the new entity created by AB 1487 (2019). BAHFA, the first regional housing agency in the State, will provide both technical assistance and financial assistance to the Bay Area’s nine counties and 101 cities. The Authority is housed in the Metropolitan Transportation Authority, the Bay Area’s transit planning, financing, and coordinating agency. Read More. . .

Join Our Growing Team!

GPLA Leadership Addition

It is with great pleasure that we welcome Krista Phipps to the Global Policy Leadership Academy (GPLA). Krista joined GPLA this month as Director, Business Growth Strategy and Execution. She will be leading on the execution of the business plan and marketing strategy, and on the delivery of the services and products that GPLA offers.

Krista brings a wealth of experience in economic development, public policy, public relations and communications working within and around local governments. She is a skilled specialist in community engagement, strategic visioning, and economic development practices. We are thrilled to have Krista join the GPLA team and we look forward to growing with her on our senior level management team. For more information about GPLA and how you can bring a Housing Policy Leadership Academy to your community contact Krista at [email protected].

Come join our team! LeSar Development Consultants is growing, and we are looking for talented and motivated team members to join our diverse team. Please help us reach a wide group of candidates by sharing with your networks and social media channels.

Find more information about these positions on our Careers Page.