City leaders in Los Angeles are considering joining the state’s middle-income housing programs.
California agencies have funded the conversion of more than 6,000 luxury apartment units statewide into middle-income affordable housing, according to the L.A. Times.
The L.A. City Council is waiting on a staff report on the possibility of joining the programs.
The state purchases buildings through joint powers authorities, which issue bonds on behalf of member governments to purchase and pay for the management of the buildings.
So far, the California Statewide Communities Development Authority and the California Community Housing Agency are the most active on the market.
The CSCD has been involved with several large deals around the L.A. area in the last year. The agency joined a partnership led by Waterford Property Company to buy and convert the Altana building in Glendale this spring using $339 million in tax-exempt bonds.
Joint powers authorities lower rent to levels considered affordable for people like teachers and police officers. They’re able to do so because they don’t have to pay property taxes.
The bonds to purchase properties mature in about 30 years. When the bonds mature, the properties can be sold — with all proceeds going to the city — or the city can continue to own the property and borrow against it.
Proponents say that such an arrangement should allow a city to recoup more money than it would through property taxes.
[LAT] — Dennis Lynch