Housing Finance Bills Move Forward

Following the successful creation of a new regional housing finance agency in the San Francisco Bay Area—the Bay Area Housing Finance Agency, or BAHFA—two efforts are underway to create similar organizations in Southern California. In San Diego, a bill authored by Senator Ben Hueso (San Diego) would create the San Diego Regional Equitable and Environmentally Friendly Affordable Housing Agency (SD-REEF-AHA) with the purpose of raising funds to support production, preservation, and protection efforts, with a focus on equity and the environment. In Los Angeles, a bill authored by Senator Sydney Kamlager (Los Angeles) would create the Los Angeles County Housing Solutions Agency (LACAHSA), with the purpose of providing funding and technical assistance to produce, preserve, and protect affordable housing opportunities throughout the County and its 88 cities. Neither entity would have jurisdiction over land use decisions.

In 2019, AB 1487 (David Chiu, San Francisco) established BAHFA, which has the authority to raise and distribute funds through a variety of methods for production, preservation, and protection efforts in the 9-County San Francisco Bay Area. BAHFA is housed in the Metropolitan Transportation Commission (MTC), which also includes the Association of Bay Area Governments. AB 1487 created the framework for BAHFA, including a government structure and powers. BAHFA received an allocation of funding– $20 million—to begin operations and implement several small housing pilots. MTC recently named an Executive Director and is in the process of hiring staff. Additionally, BAHFA is planning for a ballot measure for a $10 B bond for the FY 2024 general election.

Senator Hueso’s SB 1105 for SD-REEF-AHA would provide a new tool to San Diego County and its cities in addressing significant unmet housing needs and to meet Regional Housing Need Allocation targets, with a focus on sustainability, equity, and good jobs. In addition to funding, the new entity would provide technical assistance to jurisdictions in San Diego County. An appropriation would be needed to jumpstart this new Agency.

Senator Kamlager’s SB 679 for LACAHSA would create a new independent county agency for Los Angeles and its 88 cities with the authority to issue bonds and raise revenue through a variety of sources as well as provide technical assistance and collect data. A similar bill failed to move last year, but the author worked with labor to address concerns to move the bill forward. Like SB 1105, this new agency would also need a funding commitment and Senator Kamlager is working to include a $20 million appropriation in the FY 2022-23 budget to get it started.

Some concerns have been raised about the creation of these two bodies, including that they would duplicate existing powers. For the nine-county Bay Area to create a regional revenue source and an agency with regional authorities, a new entity was required because there was otherwise no authority without State authorization. However, because SD-REEF-AHA and LACAHSA are focused on only one county, some have raised issue with creating a new governing structure when they could already exercise existing authorities. SB 679 has wide support from nonprofit organizations as well as cities in Los Angeles County. It is sponsored by the United Way of Greater Los Angeles. SB 1105 has support from a variety of nonprofit and labor organizations. The San Diego Association of Governments (SANDAG) recently voted to support the new entity. Some groups, including contractors, affordable housing advocates, and some state housing organizations have raised concerns with the labor provisions included in the two bills.

Both bills still need to make it through Assembly Appropriations and be enacted by the Legislature before the end of August. They then must be signed into law by the Governor by September 30th. If signed, they would then go into effect on January 1, 2023.