California launches $1.8B fund for stalled affordable housing projects

Will provide last chunk of money to break ground and complete work on up to 7K units

A construction site in Century City (Getty)
A construction site in Century City (Getty)

Two days after his recall election victory, Gov. Gavin Newsom on Thursday launched a $1.75 billion fund to help complete stalled affordable housing projects statewide.

The California Housing Accelerator fund will provide money for projects that are shovel-ready but are just short of what they need to break ground, according to the Los Angeles Daily News.

State housing officials said they could disburse money from the fund to 90 projects by the end of year, accounting for between 6,300 to 7,000 housing units.

The Housing Accelerator will specifically target projects that have been unable to secure Low Income Housing Tax Credits, a key source of funding for affordable projects across the country.

Developers sell the tax credits to investors for equity and the federal government recently set a higher base interest rate for the credits in a move to make them more attractive to investors.

Sign Up for the undefined Newsletter

Still, there aren’t enough LIHTCs to go around, meaning some affordable projects are left unbuilt, according to the report.

The Housing Accelerator was created in Newsom’s $100 billion post-coronavirus recovery package, the California Comeback Plan.

Also on Thursday, Newsom signed into law two controversial housing bills designed to boost development.

Senate Bill 9 will allow property owners to build up to four residential units on most properties currently zoned as single-family. The measure has been several years in the making and was consistently criticized by some homeowners as the death knell of single-family neighborhoods.

Senate Bill 10, which Newsom also signed, allows local governments to fast-track upzoning some single-family zoned areas to allow up to 10 units.

[LADN] —Dennis Lynch