America Votes YES for Affordable Housing

6 min read

November sees overwhelming approval for new bonds

November’s state and municipal elections brought a big crop of newly-approved bonds into the affordable housing finance mix, with some of them passing by wide margins, and the biggest, in California, authorizing a whopping $4 billion in new money.

The city of Berkeley, CA, for instance, overwhelmingly approved, by 77.5 percent to 22.5 percent, a measure to issue up to $135 million in bonds to fund housing for “low-, very low-, median- and middle-income individuals and working families, including teachers, seniors, veterans, the homeless, students, people with disabilities and other vulnerable populations,” according to ballot language.

The raw vote was 42,356 yeas to 12,310 nays for housing money for new construction, rehab and preservation. The general obligation bonds are also intended to leverage funds from state and county sources.

The proceeds may be used for acquisition or improvement of property for the construction, rehabilitation or preservation of affordable housing, or to construct, rehabilitate or preserve supportive housing, nonprofit rental housing and limited-equity housing cooperatives affiliated with community land trusts, according to the city.

Voters in the city of Austin, TX, approved by 73 percent to 26 percent in preliminary counting a $250 million affordable housing proposal included in Proposition A.

According to radio station KUT, the funds are for the city to build, repair and maintain existing affordable housing throughout Austin.

The general obligation bonds and notes would include $100 million for land acquisition, $94 million for rental housing development assistance projects, $28 million for the Acquisition & Development Homeownership Program and $28 million for a home repair program.

California Props
The biggest measure on state ballots in 2018, California’s Proposition 1, won by a comfortable-but-not-landslide margin of 56 percent to 44 percent. But now there’s $4 billion more in the state’s affordable housing war chest, with $1 billion targeted for veterans.

The general obligation bonds are planned to be used in these ways:

  • $1 billion for the CalVet Home Loan Program, which offers loans to veterans for the purchase of homes, farms, units in cooperative developments and mobile homes;
  • $1.5 billion for the Multifamily Housing Program, which offers loans for the construction, rehabilitation and preservation of rental housing for persons with incomes of 60 percent or below of the area median income;
  • $150 million for the Transit-Oriented Development Implementation Fund, which offers loans and grants to local governments and developers for housing projects near transit stations;
  • $300 million for the Regional Planning, Housing and Infill Incentive Account, which offers grants for infill infrastructure that supports high-density affordable and mixed-income housing;
  • $150 million for the Home Purchase Assistance Program, which offers loans to low-income and moderate-income homebuyers;
  • $300 million for the Joe Serna, Jr. Farmworker Housing Grant Fund, which offers grants and loans for farmworker housing;
  • $300 million for the Local Housing Trust Matching Grant Program, which offers matching grants to local housing trust funds for “pilot programs to demonstrate innovative, cost-saving approaches to creating or preserving affordable housing;” and
  • $300 million for the Self-Help Housing Fund, which provides forgivable loans for mortgage assistance, the development of multiple home ownership units, and manufactured homes.

California’s Proposition 2, which won by 63 percent to 37 percent, was also housing related. It authorized the state to use revenue from Proposition 63 (2004)—a one percent tax on income above $1 million—for $2 billion in revenue bonds for homelessness prevention housing for persons in need of mental health services.

Flexibility in Oregon
Oregon’s Measure 102, which passed by 57 percent to 43 percent, approved not a single dollar for affordable housing. But it removed a restriction that affordable housing projects funded by municipal bonds be government owned, opening up the use of bond revenue to fund affordable housing without it having to be completely owned by counties, cities and towns. This should benefit LIHTC deals, with their emphasis on private ownership, according to a Ballotpedia analysis.

It said Measure 102, “was advocated for by Portland City Hall. The LIHTC program was designed to provide tax credits for developers to create affordable housing units. Going into the election, since the federal program was designed to require private ownership of affordable housing, the city of Portland had to keep its local bond revenue and the federal program’s funds separate. Measure 102 authorized Portland and the metro region to use the federal program funds, as well as bond revenue from local bond measures in the area.”

A Portland ballot offering authorized money for affordable housing, $652.8 million of it, and it passed by a 66 percent to 34 percent vote, according to Ballotpedia.

The money is to go to projects in Clackamas, Washington and Multnomah counties. The ballot question specified the money will go for housing for, “low-income families, seniors, veterans and people with disabilities.”

Counties & Cities
Some 72 percent of Broward County, FL voters approved the formation of an Affordable Housing Trust Fund, without making a specific allocation of funds. But according to local media, the measure creates a localized version of the state’s affordable housing fund, the Sadowski Fund. But unlike the state fund, money in Broward’s fund must be used exclusively on housing projects and programs, according to the local report.

To start, the Broward County Commission has authorized $5 million for the first year and another $5 million for the next.

In addition to the 2018 measures, housing bonds approved in November 2017 are starting to come online. According to the Miami Herald, the city of Miami has released a list of the first round of improvements to be funded by the Miami Forever GO bond, a $400 million general obligation bond that includes $100 million for affordable housing. The first round of work would include $15 million for new affordable housing projects and a single-family home rehabilitation program.

The city of Dallas in 2017 approved Proposition I, a vote in favor of increasing the city’s debt by $55 million by issuing that same amount of general obligation bonds to fund economic development and housing. The vote was 62 percent to 38 percent.

Funding up to $10 million was approved for each of 12 city council districts for mixed-income housing and other uses.

The city of Charleston, SC, had a $20 million affordable housing measure on the ballot in 2017, its first since the year 2001, when it approved $10 million. The Charleston Housing Authority used the $10 million the city borrowed then to build 64 affordable rental units.

According to the Charleston Post and Courier, those bonds were approved and will be issued sometime this year.

Mark Fogarty has covered housing and mortgages for more than 30 years. A former editor at National Mortgage News, he has written extensively about tax credits.