Government needs to act fast to help affordable housing

As if California did not have enough of an affordable housing crisis, the wolf has begun to howl at the door of the people who are lucky enough to live in the high-quality homes provided by the state’s nonprofit affordable housing developers and managers. 

Massive unemployment brought on by the pandemic of 2020 has taken its toll on low-income workers and others whose only ticket out of substandard housing has been their ability to find a place to live in one of the state’s 344,218 rental units financed by the state and federal low-income housing tax credit program.

These hard-working people who have lost jobs or hours due to the pandemic have understandably had a difficult time paying the rent, even in the nonprofit communities such as ours at Mutual Housing California where we have committed to keep rents below market rate.

At Mutual Housing, 35% of our residents pay their rent entirely from their employment income. Another 21% combine their jobs with other income sources in order to pay the rent. 

Since the pandemic hit, our working residents’ unemployment crisis has resulted in nearly a 10% reduction in our rental income – and we’re one of the luckier outfits. Managers of other nonprofits around the state have told me that their rent revenues have dropped by as much as 25%.

We at Mutual Housing concur with the recent legislation signed by Gov. Gavin Newsom to extend the eviction moratorium for California renters who have been hammered by COVID-19 related income losses. 

It is time, though, that the state and federal governments take action to protect the hundreds of thousands of nonprofit affordable housing units that provide safe and stable homes to more than a million people in California. 

Already, the state has $384 million in unspent Coronavirus Aid, Relief, and Economic Security (CARES) Act funding available, for which rental assistance is an eligible use. Affordable housing developers and others have asked the state Department of Housing and Community Development to set aside $200 million of these funds to preserve affordable housing communities. 

Meanwhile, the U.S. House of Representatives in May approved the Health and Economic Recovery Omnibus Emergency Solutions (HEROES) Act. The bill contains $100 million that would help affordable housing developers get through this pandemic-created crisis. It is past time for the Senate and executive branch negotiators to work out a deal with House Speaker Nancy Pelosi to get this money out the door.

The California Housing Consortium says it best on what’s going to happen if nothing is done about it: 

“For these properties,” the consortium said in its “Keep California Housed” campaign statement, “the impact of lost tenant revenues will have a potentially catastrophic, cascading effect that could lead to loss of control of properties and possible bankruptcies.” 

We know what the result of that would be – Wall Street investors flying into the state to pick up some real estate bargains, at the expense of people who are struggling to avoid homelessness. 

The federal government and the state have invested hundreds of millions of dollars to build and maintain tax-credit housing, including 1,100 units that Mutual Housing California, developed in Sacramento and Yolo counties to provide homes for 3,165 people.

At a time when more than 150,000 people in California are already homeless, it makes no sense for short-sightedness by policy makers in Sacramento and Washington, D.C., to put tens of thousands more families at risk of having to live on the streets.

Affordable housing advocates in California are calling for a $1 billion subsidy pool to be funded by owners, lenders, investors and public agencies to help affordable housing developers get through this crisis. We at Mutual Housing California certainly join in this recommendation.

Elected leaders at all levels of government need to get working on this immediately, and they should be held accountable by voters if they don’t.