Regional housing bond is key solution to fund the gap
Enterprise Community Partners (Enterprise) and the Bay Area Housing Finance Authority (BAHFA) today issued new research revealing that there are 395 affordable housing developments in various stages of predevelopment across the nine-county Bay Area that would create an estimated 32,944 affordable homes in one of the most expensive real estate markets in the country. The analysis found that these developments need $7.6 billion in public financing in order to move forward. The Bay Area Affordable Housing Pipeline research brief offers insights into where planned affordable developments are located across the nine-county region as well as how to fund the current pipeline of homes and boost production into the future.
“The good news is that the sheer size of the predevelopment pipeline gives Bay Area cities, towns and counties a good running start toward meeting the affordable housing production challenge laid down by the state,” noted BAHFA Director Kate Hartley. “But to avoid squandering this head start, it’s essential that we unlock the money needed to move these projects from planned to occupied.”
Affordable homes typically are funded through multiple sources, including Low-Income Housing Tax Credits and bonds, commercial mortgages and additional local, regional and state dollars that fill the gap between the cost of the development and the financing secured through debt and equity.
One solution Enterprise and BAHFA have identified to close the $7.6 billion gap and accelerate affordable housing production in the Bay Area is a 2024 regional ballot measure that would create a $10 billion to $20 billion regional housing bond dedicated to funding affordable housing developments across the region. BAHFA was authorized to place such a bond measure on the ballot through its enabling legislation in 2019.
“The Bay Area faces a critical lack of affordable homes, and existing local, state and federal resources are oversubscribed. We need new solutions to ensure every planned housing development gets built and that homes that are currently affordable remain affordable for generations to come,” said Justine Marcus, Senior State and Local Policy Director, Enterprise. “A regional bond will create a dedicated stream of funding that will help support more equitable housing development across the region.”
Nearly half (45%) of Bay Area renters spend more than 30% of their income on housing, and a quarter spend over 50%. The State of California’s most recent Regional Housing Needs Allocation Plan found the Bay Area needs 180,000 more affordable homes by 2031 to meet demand. Unlocking the affordable homes currently in predevelopment and ready to be built would meet nearly 20% of this goal, and a regional bond would create a pathway toward achieving that.
The Pipeline shows that there are affordable housing developments planned in all nine counties across the region, including 10,829 affordable homes in Santa Clara County, 7,916 in Alameda County, 7,258 in San Francisco City and County, and 2,209 in Sonoma County. But right now each Bay Area city, town or county is currently working on its own to address the regional challenges of housing affordability and homelessness. The proposed bond would allow for a more coordinated, equitable approach at the scale of the need across the region.
“Creating affordable homes requires bringing funding and partners to the table from all levels of government and across sectors. By coming together as a region to raise the necessary dollars and plan long-term, we can use both public and private money more efficiently and create an easier, more efficient process for affordable housing developers. We can send a signal to affordable housing developers that building in the Bay Area is possible – and that we can do it at the scale of the need. With regional buy-in and new funding, we can create a snowball effect that accelerates development so we can meet the massive need for affordable homes in our communities,” said Heather Hood, Vice President and Northern California Market Leader, Enterprise.
About Enterprise Community Partners
Enterprise is a national nonprofit that exists to make a good home possible for the millions of families without one. We support community development organizations on the ground, aggregate and invest capital for impact, advance housing policy at every level of government, and build and manage communities ourselves. Since 1982, we have invested $54 billion and created 873,000 homes across all 50 states – all to make home and community places of pride, power and belonging. Join us at enterprisecommunity.org | Twitter: @Eprise_NorCal
About the Bay Area Housing Finance Authority
Established by the state legislature in 2019, BAHFA’s mandate is to create regional solutions that meet the Bay Area’s affordable housing needs. It is the first regional housing finance authority in California, and works together with the Metropolitan Transportation Commission (MTC) and Association of Bay Area Governments (ABAG).