Innovative New Tax Credit Would Help to Preserve 25,000 Units of Affordable Housing Over the Next Five Years
- Dana Alpert
- Legislative/Communications Assistant
SACRAMENTO, CA — Today, Assemblymember Jesse Gabriel (D-Woodland Hills) introduced Assembly Bill (AB) 1911, which would create a new tax credit program to preserve at least 25,000 units of affordable housing that are at risk of converting to market-rate rents over the next five years.
Housing hardships are reaching unprecedented heights during the COVID-19 pandemic. An estimated 13.2 million adults living in rental housing—nearly 1 in 5 adult renters—are behind on rent payments due to the pandemic, with renters of color facing the worst hardships. There is a clear urgency to address rising housing costs and plummeting wages through decisive measures that preserve low-cost housing.
“In the midst of our crises, California cannot allow tens of thousands of affordable units to disappear overnight,” stated Assemblymember Jesse Gabriel. “COVID-19 has only further exacerbated housing instability and our homelessness crisis. Even as we work to increase our affordable housing stock, it is essential that we preserve existing units. A smart front-end investment by the state will help keep tens of thousands of vulnerable Californians housed, all at a small fraction of the cost that otherwise would be required to build new units from scratch.”
According to the California Housing Partnership, over 31,000 subsidized affordable rental units in California are at risk of converting to market-rate units as state and federal subsidies and deed restrictions expire over the next ten years. This figure represents a significant portion of the state’s subsidized affordable housing stock, and includes properties financed or assisted by the U.S. Department of Housing and Urban Development, the U.S. Department of Agriculture, and the Low-Incoming Housing Tax Credit, which is administered by the California Tax Credit Allocation Committee. Between 1997 and 2019, California lost 15,004 affordable rental homes as subsidies and affordability restrictions expired.
AB 1911 would incentivize owners of affordable housing who are eligible to convert the homes to market-rate rents when current subsidies or deed restrictions expire to sell to organizations committed to maintaining long-term affordability. This legislation would enable California to preserve roughly 25,000 affordable units over the next five years, at the cost of approximately $20,000 per unit.
California Housing Partnership President Matt Schwartz stated, “The Affordable Housing Preservation Tax Credit provides a creative and innovative tool that will significantly slow the loss of existing affordable housing in California and make it possible for thousands of lower-income households to remain in their homes and avoid displacement.”
AB 1911 is coauthored by a bipartisan group of legislators and is expected to be heard in Assembly committees in the coming weeks.