In exchange, the building owners are freed from paying property taxes for the life of the bonds, ranging from 30-35 years. Once the bonds reach maturity, the host city can either keep the building after paying off any remaining debts or sell it.
As of Aug. 31, 28 projects had been set up in 17 California cities over the past three years, of which 21 were purchased this year. Three JPAs have spent almost $2.3 billion buying apartments, acquiring 8,130 units that are gradually being converted to income-restricted housing as vacancies occur.
Imagine asking a landlord how much they want for rent and being told, it depends on how much you can afford.
The rent, the landlord says, is based on your income, not the highest amount we can squeeze out of you in a tight rental market.
A fantasy, you think. This couldn’t happen in California, which has some of the nation’s highest and fastest-growing rents.
But it turns out programs to help middle-income tenants do exist. And they’re proliferating rapidly across the state.
During the past 2 ½ years, 28 new workforce housing programs — the so-called “missing middle” of the housing market — have been created, with 21 of them cropping up this year alone.
What’s more, most of these income-restricted apartments are in newer buildings with pools and fitness centers, quartz countertops and new appliances — properties that otherwise command some of the market’s highest rents.
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“We noticed an increasing middle-income housing crisis where the vast majority of our middle-income workforce won’t qualify for low-income housing and can’t afford to live where they work,” said Jordan Moss, founder of Catalyst Housing Group, an affordable housing provider that created the first workforce programs in the state. “We can’t have fully functioning communities if we can’t house our workforce anywhere near the communities they serve.”
Nonetheless, not every city is jumping on the opportunity to take advantage of this new housing model.
During the past year, the city of San Jose studied the program and opted not to participate. Oakland and San Francisco reportedly passed as well.
The city of Long Beach approved one income-restricted apartment complex in March, but only as “a pilot project” after a city consultant raised questions about possible financial risks to the city, building upkeep and a lack of third-party oversight.
Since property taxes get waived for these projects, one affordable housing advocate questioned whether the rent gets lowered enough to justify the cost to the taxpayers.
Matt Schwartz, president and CEO of the California Housing Partnership Corp., also questioned whether the program is bailing out troubled properties with high vacancy rates and whether there’s enough incentive to maintain the buildings properly.
“I wish people would take a deep breath and take their time and kick the tires much more on these transactions,” Schwartz said. “How much benefit is being gained and for what benefit in return?”
The need for middle-income housing has long worried business groups and housing advocates who say rising costs are forcing teachers, police, firefighters, nurses, office and retail workers to make longer and longer commutes to their jobs, creating more traffic congestion and pollution.
High housing costs also impact employee recruitment and retention and have even been blamed for California’s …read more
Source:: Los Angeles Daily News