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Acquisition Funding to Create Moderate Income Housing
Jon Penkower
Managing Director, California Statewide Communities Development Authority
A new program run by the California Statewide Communities Development Authority is designed to help cities meet their goals for housing middle-income residents, those earning between 80 percent and 120 percent of the area median income. The authority issues tax-exempt bonds to help cities pay for development projects that have some public benefit. Since it was created in 1988, the authority has helped finance more than 100,000 affordable-housing units, as part of deals involving federal low-income housing tax credits and other subsidies. But this year, the CSCDA has started a new Workforce Housing Program, in which it plans to sell bonds to purchase rental properties, restrict rents to levels that are affordable to moderate-income tenants, and then use the rental income to pay back the debt over a period of 30 years. The program is meant to help cities provide housing for the so-called “missing middle,” people who earn too much to qualify for most subsidized housing but not enough to afford most of the market-rate housing that’s being built. The funding fills a gap in the financing equation, where workforce housing is not eligible for tax credits, private activity bonds or most other federal, state or local government subsidies.
