COVID-19 is exacerbating two massive problems that affect California’s residents every day — homelessness and the lack of affordable housing. While advocacy groups, affordable housing developers, politicians and nonprofit organizations like Father Joe’s Villages actively seek ways to solve these problems once and for all, we face a crucial barrier: the process to fund affordable housing is remarkably complicated.
Funding opportunities from the state and local governments, developer incentives, and land-use regulations are complex and require creative problem solving to string together funding sources necessary to make an affording housing community a reality. While this problem is multifaceted and must be attacked from different fronts, there is a clear first step. Legislators must evaluate and update the funding systems that prevent organizations and developers from building homes for people facing homelessness and poverty.
It’s no secret that our state struggles with affordable housing. California is the second costliest state in the country, according to a CNBC report, and it is home to 25% of the nation’s homeless population. Now due to COVID-19, according to a study by Stout, more than 40% of California’s renters are unable to pay their rent — thus making them at-risk for eviction and potential homelessness due to the pandemic.
However, as Father Joe’s Villages has seen first-hand, financing affordable housing for those experiencing homelessness in California is like navigating a never-ending maze.
It took us nearly three years to put shovels in the ground for the 14-story St. Teresa of Calcutta Villa complex in downtown San Diego after it was conceptualized. The majority of this time went to applying to and getting approved for multiple sources of state funding, which was just a portion of the nearly 10 sources needed to make a development of this size possible. We applied for each individual funding source in their prescribed times, often waiting months between opportunities or to hear back on a given funding application.
Moreover, each source has its own set of regulations which sometimes conflict with each other or, in some cases, with the ultimate end of creating the housing itself. For example, we secured several types of funding from the California Department of Housing and Community Development on the same building only to learn later that some of the sources cannot be paired with other sources in the same building. As a result, the development had to legally split into two buildings to prevent the loss of the sources it had painstakingly secured.
But that’s just obtaining the funding. California has regulations, or caps, in place that prevent developers from earning more than a certain amount of money on building facilities, regardless of size. In some instances, this makes it so that developers would earn the same amount of money for a large high rise as they may for a much smaller, less complex building, which discourages dense urban and transit-oriented developments like Father Joe’s Villages’ 14-story complex from being developed and keeps California from achieving the scale that we need to abate this crisis.
Like we said, it’s complicated. That is why we call on legislators to implement a set of solutions to ensure that California can develop the desperately needed affordable housing quicker. We recommend these three steps as a place to start:
- Compile a multitude of state funds that currently act independently of each other into one fund and increase award amounts. This would create one process for all state funds; reduce the length of time it takes to get funding approved; make regulations for multiple funding sources obsolete; and decrease the amount of work needed to secure funding for organizations.
- Implement a rolling deadline that allows organizations to apply for funding when the timing works for their facilities. Developing housing is extremely complex with many moving parts. This will help ensure that state funding is available when developers need it.
- Restructure the incentive caps to match the size and complexity of each development. This will encourage developers to take on bigger, more dense facilities that will more efficiently chip away at the sheer number of people living on the streets.
By following these three steps, the state could better align its resources to best facilitate the creation of affordable housing from the get-go, removing the enduring barriers currently in place. This could mean that organizations and developers could fast track construction and make affordable housing more readily available, helping people in need leave homelessness behind for good.
Jim Vargas is the president and chief executive officer of Father Joe’s Villages, San Diego’s largest homeless services provider. He is a deacon of the Roman Catholic Diocese of San Diego serving the community of Mary, Star of the Sea in La Jolla, previously having served the community of Our Lady of Angels in downtown San Diego.