Time Constraint Cost California $14.4 Million

Washington—The Senate on Monday unanimously approved an amendment authored by Senator Dianne Feinstein (D-Calif.) to ensure communities maintain access to federal funds for the construction of affordable housing through the Department of Housing and Urban Development’s HOME Investment Partnerships Program. The amendment was cosponsored by Senators Rob Portman (R-Ohio), Bob Menendez (D-N.J.), Jeff Merkley (D-Ore.) and Bernie Sanders (I-Vt.).

“The shortage of affordable housing in California has reached crisis levels and is contributing to a significant increase in family homelessness,” said Senator Feinstein. “While the state and city governments, including Los Angeles, San Francisco and San Diego, are working to address homelessness and build new affordable housing, the federal government also has a role to play. Our amendment eliminates a significant barrier to the use of federal funds, which communities need to build and maintain affordable housing. Federal funds are critical to securing financing and making these projects more attractive to developers.”

California communities have lost approximately $14.4 million since 2011 due to a burdensome time constraint that requires communities to commit funds to specific projects within 24 months. Given additional requirements on project selection, underwriting standards and developer capacity, communities are often unable to meet this deadline, which means the funds are lost.

The amendment eliminates the requirement for designating funds within 24 months but maintains the four-year timeline for project completion.

The amendment would help address California’s affordable housing crisis by ensuring federal funds remain available for local housing projects as communities pursue other sources of financing, including low-income housing tax credits. While communities fund capital projects using a range of financing sources, federal funds are often necessary to jumpstart these projects because they assure developers of a project’s viability.

Funds lost in California since 2011

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