Last week CalMatters – which has become a prime go-to source for coverage of news, and especially politics, in California – published a story that can only be described as infuriating. Titled “California pledged $500 million to help tenants preserve affordable housing. They didn’t get a dime,” it’s about the a state initiative called the Foreclosure Intervention Housing Preservation Program (FIHPP).
The legislature created the FIHPP in 2021 to help low income and fixed income Californians avoid losing their homes. The concept was straightforward: Tenants whose landlords are considering selling their properties to new owners or developers could create housing land trusts, nonprofit corporations that existing laws allow to purchase the properties and maintain them as affordable housing in perpetuity. The trusts typically raise the money by applying for loans, meaning that while they preserve the property and homes, tenants are still on the hook for interest payments. That interest effectively acts as a rent increase, albeit a considerably smaller one than a new owner may impose. And paying a bit more per month is a sight better than losing one’s home altogether. The FIHPP would have provided funding assistance in the form of interest free grants, further lowering the barriers to preserving that badly needed stock of affordable housing. Lawmakers seeded the program with $500 million. That’s not a lot in terms of the overall need for affordable housing funding in California, but it was a start.
At least, it should have been.
According to the CalMatters story, the state was supposed to start distributing funds this year. Instead, three years after its creation the program had not delivered a penny. Adding insult to injury, in a cost-cutting move the legislature killed the program altogether in June, with Governor Gavin Newsom and lawmakers citing the state’s looming $68 billion budget deficit as justification. For the mathematically inclined, that means they addressed 0.007% of the deficit by screwing low income Californians. For the politically inclined, the deficit is a direct result of breathtaking shortsightedness on the part of the state’s political class. During the COVID pandemic, when “emergency” federal funding fell like rain, they spent money like poets on payday as if the temporary funding would last forever. Vulnerable Californians are being punished for the political class’s own incompetence. You just cannot make this stuff up.
What was supposed to be a “game changer” (how often do we hear that cliche?) in the housing affordability crisis instead has turned into yet another failure by lawmakers and, especially, state bureaucrats, to follow through on their promises and responsibilities. It’s the latest installment in the ongoing litany of failures that started with then-Governor Jerry Brown’s decision to disband the state’s community redevelopment agencies in 2011. It includes the Newsom administration’s failure to oversee the pandemic era Project Homekey program, their failure to meaningfully account for the $20 billion in taxpayer money they’ve thrown at the crisis since 2020, and their inability to deliver promised “tiny homes” for homeless people in the state.
In an emailed statement, Department of Housing and Community Development (HCD) spokeswoman Alicia Murillo said the quiet part out loud. She told CalMatters that the FIHPP failed because “the unprecedented nature of the housing preservation program created a steep learning curve for agency staff.” She said the program “was very different from any other program HCD manages, both in terms of the types of projects (small-scale acquisition/rehab vs. our usual larger-scale new construction) and in terms of the mechanism for fund disbursement (using external nonprofit lenders rather than disbursing funds ourselves).”
Translation: “The program failed because we didn’t know what we were doing and didn’t bother to learn.”
Imagine telling your boss that a major new multi-million dollar initiative for which you were responsible failed because, gosh darn it, you just couldn’t figure out how to make it work. You likely would not have your job much longer. Then again, you don’t work in government. The name of the game is failing upward.
Read the rest of this piece at All Aspect Report.
Chistopher LeGras is an attorney, journalist, muckraker, and Californian.
Image: California Department of Housing and Community Development Director Gustavo Velasquez. Graphic courtesy of The Real Deal.
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