Posted by Jack
California will punish cities and counties that don’t meet their housing goals under a deal Gov. Gavin Newsom and legislative leaders announced Thursday.
If a court finds that a city or county violates a state law that sets targets for how much housing a community must plan to build, the fines could range from $10,000 to $600,000 per month, according to the bill language published Thursday.
Local governments would have a year to comply before the fines kick in after a court finds them in violation of the law. The fines would increase over time if the local government remains out of compliance.
Skyrocketing development costs and loss of state and federal subsidies are undermining Los Angeles’ goal of adding 10,000 units of homeless and affordable housing in a decade, officials said Friday.
At the current rate of spending, the $1.2-billion bond authorized by Proposition HHH would fall as much as 4,000 units short, they said in a report to the citizen oversight committee for the bond program.
With about a third of the money already committed, city officials are projecting that fewer than 6,000 units could be built at the current rate of spending before the money runs out.
The 10,000-unit goal for the bond was based on an assumption that the city could spend about $140,000 per unit. The remainder would be made up primarily by state funds and federal tax credits that can be sold on the financial markets.
Edwin Gipson, director of finance and development for the city’s Housing and Community Investment Department, told the committee that the federal tax reform law has lowered the value of those credits by about 25%, reducing the money available to the developers.
At the same time, costs are up in a booming construction market, and builders of permanent supportive housing are competing for labor with much larger projects that offer long-term employment, Gipson said.
A Times analysis of the 29 projects currently approved for funding found their average cost to be more than $476,000 per unit. Two projects will cost more than $650,000 per unit and five more than $550,000.