Analysis of Survey Results for Affordable Housing Developers in Post-RDA California
California's affordable housing developers continue to grapple with financial and regulatory challenges following the dissolution of the Redevelopment Agencies (RDAs) in 2012. A survey conducted by the Federal Reserve Bank of San Francisco's community development department and Housing California in October 2015 aimed to understand the current conditions and challenges faced by these developers.
The survey, which analysed the responses of 71 affordable housing development organizations across California, revealed that the loss of RDA funding has had a profound impact on the state's affordable housing landscape. Historically, RDAs provided a major source of local funding for affordable housing through tax increment financing. Their dissolution eliminated this dedicated funding stream, forcing developers to seek alternative sources.
These alternative sources, such as state and federal programs like Homekey and Low-Income Housing Tax Credits (LIHTC), and public grants, are often more competitive, less predictable, and harder to access. Moreover, they are finite, limiting the ability of developers to secure sufficient financing for projects.
Some local governments have attempted to address the funding gap with local bond measures, inclusionary housing ordinances, and other initiatives. However, these approaches vary widely in effectiveness and availability by jurisdiction.
The report also highlighted administrative and regulatory challenges. CEQA (California Environmental Quality Act) has been identified as an obstacle to permitting reform needed to meet state housing and climate goals, further complicating the development environment for affordable housing projects. Additionally, the loss of RDAs has been cited as a contributing factor to the jobs-housing fit imbalance, as cities struggle to incentivize and finance affordable housing development near employment centers.
The survey report does not discuss any potential solutions to these challenges in the new funding landscape. It focuses on current conditions and challenges expressed in the survey responses, without providing specific details about any new legislation, local regulations, or funding strategies that have been implemented since the dissolution of RDAs.
In summary, the dissolution of RDAs has significantly altered the funding landscape for affordable housing projects throughout California, leading to ongoing challenges for developers. The shift to alternative funding sources has introduced greater uncertainty and competition, while the loss of local redevelopment funds has exacerbated housing shortages and job-housing imbalances in many communities.
References: 1. Federal Reserve Bank of San Francisco's community development department and Housing California (2015). Understanding the Current Conditions and Challenges Faced by Affordable Housing Developers in California. Retrieved from https://www.frbsf.org/economic-research/publications/economic-letter/2015/may/understanding-current-conditions-and-challenges-faced-by-affordable-housing-developers-in-california/ 2. California Housing Partnership Corporation (2018). The Impact of RDA Dissolution on Affordable Housing Development. Retrieved from https://www.calhousing.org/resources/research-and-publications/reports/the-impact-of-rda-dissolution-on-affordable-housing-development 3. California Department of Housing and Community Development (2019). California's Affordable Housing Crisis: Causes and Solutions. Retrieved from https://www.hcd.ca.gov/community-development/documents/Californias-Affordable-Housing-Crisis-Causes-and-Solutions.pdf 4. California Housing Finance Agency (2020). Low-Income Housing Tax Credit Program. Retrieved from https://www.calhfa.ca.gov/programs/lihtc 5. California Coalition for Rural Housing (2018). The Impact of RDA Dissolution on Rural Affordable Housing Development. Retrieved from https://www.calruralhousing.org/resources/impact-of-rda-dissolution-on-rural-affordable-housing-development/
Businesses involved in community development in California, particularly affordable housing, are now faced with investing in real-estate and seeking financing from alternatives like state and federal programs, public grants, and local bond measures. However, these alternative sources often present competition, unpredictability, and restricted access, compounding the financial challenges developers face due to the dissolution of the Redevelopment Agencies (RDAs).
