RE: AB 1657 (Wicks) Affordable Housing Bond of 2024

Dear Governor Newsom, Pro Tem McGuire, and Speaker Rivas:

Currently, California has a shortage of 1.2 million homes affordable to lower-income households, and roughly 180,000 people experience homelessness on any given night. Thanks to critical land use and zoning laws passed by the State Legislature in recent years, the environment for permitting new affordable housing has never been more favorable. Unfortunately, the funding to make affordable housing financially feasible has not kept pace. The Department of Housing and Community Development’s most recent $576 million notice of funding availability received requests of $3.6 billion from affordable housing developers, an oversubscription of 6:1. This represents 15,000 permitted, shovel-ready affordable housing units whose only barrier to construction is a lack of state funding. When projects languish in developers’ pipelines, development becomes more expensive, and housing instability and homelessness continue to rise.

The Affordable Housing Bond of 2024 (AB 1657, Wicks) comes at a crucial time for California. Historically, the state has used voter-approved General Obligation bonds to fund the construction and rehabilitation of affordable housing. However, the $3 billion in funding authorized by the Veterans and Affordable Housing Bond Act of 2018 will be fully allocated by the end of 2024. Additionally, the Governor’s budget proposes to drastically reduce – and in some cases remove altogether – funding for most of the state’s affordable housing and homelessness programs, making the need for a new, stable funding source even more dire. Without greater state funding, we are further unable to draw down unlimited 4% federal Low-Income Housing Tax Credits, leaving billions of dollars of federal assistance on the table.

The 2024 Affordable Housing Bond Act would place a $10 billion affordable housing bond on the November 2024 ballot to fund affordable housing development for the following four years. The bond would fund:

• $5.25 billion for the Multifamily Housing Program (MHP), including an additional $1.75 billion for funding for capitalized operating subsidy reserves for supportive housing units
• $1.75 billion for the Housing Rehabilitation Loan Fund
• $1.5 billion for preservation (Portfolio Reinvestment Program, Low-Income Weatherization Program, and Community Anti-Displacement and Preservation Program (CAPP), including at least $500 million for CAPP (SB 225))
• $1 billion for CalHome and home purchase assistance programs
• $500 million for tribal housing and farmworker housing

These resources will facilitate the construction of almost 30,000 new units of deeply affordable housing, help rehabilitate (with climate-friendly sustainability improvements) 90,000 additional affordable rental homes, and make homeownership possible for more than 13,000 low-income households. The new construction rental housing funds will be leveraged with private, federal, and local funds at a ratio of more than 4:1. We kindly request that you support and prioritize the passage of AB 1657 to ensure that the state’s critical affordable housing programs are adequately funded in 2025 and beyond.