Affordable housing advocates across California are scrambling for alternative sources of funding following the closure of the state’s redevelopment agencies in February 2012.
A state law upheld by the California Supreme Court mandated the dismantling, which aims to redirect billions in property tax earnings held by the redevelopment agencies (RDAs) back to local governments to help close a huge gap in the state’s general fund.
The demise of California’s 425 RDAs “comes at a very bad time,” says Rachel Iskow, executive director of the Sacramento Yolo Mutual Housing Association.
Money coming from the federal housing program has been substantially reduced. The $2.9 billion generated by the state’s Proposition 1C bonds—enacted by California voters in 2006 for various types of housing—are almost gone, and a sluggish development market has reduced money for local low-cost housing trust funds to a trickle.
“The end of redevelopment agencies significantly shrinks the total supply of financing for affordable housing,” Iskow explains. She adds that her private nonprofit has built more than 900 homes in the Sacramento-Yolo area. It serves an ethnically diverse community of mostly “workers earning an average of $20,000 a year for a family of four people.”