Newsom’s office launches $1.75B affordable housing fund – Daily News

on Sep17
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California on Thursday launched a $1.75 billion fund that could help produce more than 7,000 new homes throughout the state, the latest attempt by Gov. Gavin Newsom to tackle the affordable housing and homelessness crises.

The new California Housing Accelerator fund is for affordable housing projects that are almost ready to break ground but have stalled because they couldn’t amass quite enough funding. Housing officials expect the accelerator will back 90 shovel-ready projects by the end of the year, creating between 6,300 and 7,200 units of low-income housing — including 1,200 units for people who are homeless. Recipients haven’t yet been selected, but the Bay Area is sure to get a share of the money.

“The California Housing Accelerator is about getting these projects on the fast track,” said Lourdes Castro Ramírez, secretary of the California Business, Consumer Services and Housing Agency. “With this investment, we will be able to provide access to quality affordable housing. The kind of housing that residents need right now.”

Money for the fund comes from Newsom’s California Comeback Plan, a $100 billion economic recovery package intended to address housing and homelessness, wildfire resilience, infrastructure and more. Newsom has made big commitments to housing Californians this year, including signing a $12 billion bill to build homeless housing and support services for unhoused people.

Last week, he expanded his Homekey program — an effort that already has funneled $846 million toward creating more than 6,000 new units of homeless housing throughout California. The state will dole out another $2.75 billion for the program over the next two years.

The new housing accelerator will target projects that have secured most of their financing but were not awarded the coveted low-income housing tax credits they need to make it over the final hump. Those credits — which provide federal tax breaks to developers of affordable housing — play a key role in  financing projects, but there aren’t nearly enough of them to go around. Projects that don’t secure the highly competitive credits often languish, unbuilt.

Thursday’s announcement took place in Oakland on the site of one such stalled project — Foon Lok. The two-phase affordable housing project is part of the massive Brooklyn Basin development, a community on the bank of the Oakland Estuary that includes 3,100 market-rate and affordable homes and several public parks. Foon Lok West is under construction and is slated to open in fall 2022 with 130 rental units for low-income households — including 26 reserved for homeless residents.

Foon Lok East hasn’t yet secured the tax credits it needs to move forward on its 124 units of affordable housing — 38 of which will be for people who are homeless. The project has been stalled for two years, said Matt Franklin, president and CEO of developer MidPen Housing.

The new accelerator fund could change that.

“We’re incredibly excited when we contemplate the potential for a new fund that would target high-benefit developments meeting the needs of the neediest among us,” Franklin said.

The first round of Housing Accelerator money — about $1 billion — is available now and will fund an estimated 40 projects, or 3,200 units. That money should be awarded by early November, said Gustavo Velasquez, director of the California Department of Housing and Community Development. The rest is expected to be doled out by the end of the year.

To be eligible for Housing Accelerator funding, projects must be ready to begin construction within six months of receiving their award.

The mood was celebratory Thursday as state housing officials and legislators gathered at the Foon Lok site, construction equipment in the background.

“It’s a great morning in Oakland,” Velasquez said. “It’s a great week across the state.”

The announcement of the new fund comes on the heels of Newsom’s recall election victory.

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