By: Alicia Robinson
November 26, 2020 —
Anaheim officials plan to lower rents at 1,017 apartments to create affordable “workforce housing,” using to a new state program that aims to plug a hole in the housing market.
Units in three apartment communities – two in the up-and-coming Platinum Triangle and one in downtown Anaheim – will be priced for the budgets of the so-called “missing middle,” working families who earn too much to qualify for low-income housing but still struggle to afford to live near where they work.
The city won’t have to lay out any cash, and it won’t be on the hook to repay borrowed money that will finance the switch to affordable status, said Anaheim Councilman Trevor O’Neil, who led a city housing committee that recommended joining the new state program.
“The only downside is that there’s a loss of the property taxes” because the newly affordable developments get taken off the tax roll for years, O’Neil said. But, he added, when the developments are eventually refinanced or sold, the city would likely recoup lost tax dollars.
“As I see it, it’s a great example of a public-private partnership to produce affordable housing very inexpensively,” O’Neil said.
The workforce housing finance program was created this summer by the California Statewide Communities Development Authority, an agency that helps local governments finance housing and infrastructure projects or assist private partners in buying, building or rehabbing facilities that benefit the community or create jobs.
Only a few cities, including Carson and Long Beach, have taken steps to join the new program. But several other cities — including Oakland, San Jose and Los Angeles — are expected to follow, said Jon Penkower, managing director of the authority. The Anaheim City Council voted Tuesday, Nov. 10, to participate.
Most tax credits, bonds and other housing subsidies are aimed at building or buying homes for people on the lowest end of the income spectrum. But there hasn’t been a program specifically to help people who earn a middle class income but can’t afford rent in the area where they work, Penkower said.
That’s the point of the new program. A later phase will help finance new construction of middle income housing; the first round is focused on converting existing apartments so they’re affordable by people who earn between 80% and 120% of the area median income. (Median household income in Anaheim in 2019 was $71,065, according to the city website.)
The Anaheim program would give preference to people who already live or work in the city, including teachers and other school district employees and first responders.
The program will operate like a public works project. Cities join a joint powers authority, which can issue bonds that are sold to investors. Then, the cash from the bond sale is used to buy housing, which is owned by the joint powers authority and exempt from property taxes. The bond debt is repaid with tenants’ rents and the proceeds of any refinancing or sale of the housing.
Penkower said the homes would typically stay at affordable rates for the 30-year term of the bonds, and cities could eventually buy the homes to keep rents lower in perpetuity.
Anyone living in a building that’s sold to become affordable can stay until their lease ends, so no one is displaced. And any current tenants who qualify can get their rent lowered right away; otherwise, the new rate is available to anyone who moves in after the current tenant leaves.
There’s still paperwork to do before the Anaheim properties, which include the Jefferson Platinum Triangle, Parallel Apartments and Alexan CTR City, are converted, but Penkower said the Alexan sale could close before Christmas.
This article courtesy of the Orange County Register
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