David Chiu Joins Colleagues to Propose Massive Funding Increase for Affordable Housing and Infrastructure

For immediate release:

Bills will bring back redevelopment agencies with reforms and expand the state’s low-income housing tax credit

Sacramento, CA--Lawmakers today announced two proposals to significantly increase funding for affordable housing and infrastructure production in California. The bills, introduced by Assemblymember David Chiu (D-San Francisco) along with a large group of colleagues, will expand the state low-income housing tax credit and create affordable housing and infrastructure agencies, an effort to recreate former redevelopment agencies.

“Our housing crisis is dire and persistent, and our state must be just as aggressive and persistent in order to solve it,” said Assemblymember Chiu. “With a new governor and an extraordinary budget surplus, now is the time to make significant, ongoing investments in affordable housing.”


AB 11 would allow cities and counties to create agencies that would use tax increment financing to fund affordable housing and infrastructure projects. This bill takes a similar approach to the tax increment financing structure used by the former redevelopment agencies (RDAs) that were dissolved during the Great Recession due to state budget constraints.  

Redevelopment agencies were originally created decades ago as a way to address blight and fund massive “urban renewal” initiatives, but they eventually became a key source of financing for affordable housing developments. At the time of their elimination, RDAs were required to spend $1 billion annually to fund affordable housing. Since that time, California’s housing and homelessness crises have reached unprecedented levels. While the state has passed some new affordable housing financing measures and tax increment funding tools, none of them are as robust as RDAs were.

The process of dissolving RDAs in 2011 exposed egregious and often bizarre abuses of how the agencies spent the funding. To ensure funding generated through new agencies is not vulnerable to the same types of frivolous uses, AB 11 puts a number of safeguards in place, including strong anti-displacement policies, detailed record-keeping requirements, independent annual audits, and harsh financial penalties for record-keeping or audit violations.

Under AB 11, agencies will have some of the same goals of funding housing and infrastructure projects as RDAs, but this new bill prioritizes affordable housing and sustainable growth.

New financing agencies will have to be approved by the Strategic Growth Council to ensure any plans are in line with California’s greenhouse gas reduction goals. Agencies will be required to set aside 30 percent of funding for the creation, improvement, and rehabilitation of affordable housing. The amount that state would invest in agencies will be capped and monitored by the State Controller.

A diverse coalition of lawmakers including Assemblymembers Cecilia Aguiar-Curry (D-Winters), Richard Bloom (D-Santa Monica), Rob Bonta (D-Oakland), Eduardo Garcia (D-Coachella), Todd Gloria (D-San Diego), Chris Holden (D-Pasadena), Jacqui Irwin (D-Thousand Oaks), Kevin Mullin (D-San Mateo), Miguel Santiago (D-Los Angeles), Phil Ting (D-San Francisco), and Buffy Wicks (D-Oakland) are joint authors of AB 11.

“As Chair of the Assembly Local Government Committee, I am eager to work with my Assembly colleagues to create a meaningful financial tool that will support housing and infrastructure in our cities and counties.  These investments will drive a new wave of economic development at the local level,” said Assemblymember Aguiar-Curry. “We will join together to assure that the new program furthers local and state goals in a fiscally responsible and accountable way, and that the benefits are felt by all types of communities in the State of California.”


An additional bill introduced by Assemblymember Chiu will significantly expand the state’s low-income housing tax credit (LIHTC). Assembly Bill 10 will increase California’s LIHTC by $500 million. Current law limits the amount of low-income housing tax credits the state can allocate to $94 million annually.

Low-income housing tax credits are a particularly effective investment because they leverage three federal dollars for every one dollar of state funding. Thus, $500 million of state investment would result in a $2 billion annual, ongoing investment in affordable housing production for low- and very low-income Californians.

The California Tax Credit Allocation Committee Awards these tax credits to developers with approved projects, who in turn sell the credits to investors to raise capital for those projects.  

Now is an especially opportune time for California to expand LIHTC. As corporate tax rates fell due to the passage of the federal Tax Cuts and Jobs Act of 2017, the value of federal low-income housing tax credits also fell. At the same time, the value of state low-income housing tax credits increased, making them more attractive to investors.

Attempts to increase LIHTC in recent years have received overwhelming bipartisan support, but ultimately were not signed into law by Governor Brown.  

California Housing Consortium, California Housing Partnership, Housing California, and Non-profit Housing Association of Northern California are sponsoring AB 10. A bipartisan group of nearly two dozen legislators are co-authoring the bill.

“It is unacceptable that our low income families are spending over 50% of their limited incomes on housing costs, and these costs only continue to rise,” said Assemblymember Eloise Gomez Reyes (D-San Bernardino), a joint author of AB 10. “We must use every tool available to increase the availability of safe and affordable low-income housing that provides neighborhood stability and security.”

Both AB 11 and AB 10 are expected to be heard in Assembly policy committees by April 2019.  


Assemblymember David Chiu (D–San Francisco) is the Chair of the Housing & Community Development Committee of the California State Assembly. He represents the 17th Assembly District, which encompasses eastern San Francisco. Learn more at:  https://a17.asmdc.org/

Voices for Restoring and Reforming Redevelopment

“When redevelopment ended at the height of California's last budget crisis, cities like Los Angeles lost $5 billion in annual funding that was used to build affordable housing and invest in vulnerable communities.  I'm pleased that the Legislature is taking a serious look at bringing back this important resource, and look forward to working with them and the Governor-elect to help cities get the funding we need to tackle our affordable housing crisis." --Los Angeles Mayor Eric Garcetti

“California needs bold solutions to take on the housing affordability crisis that is affecting not just San Francisco but the entire state.  This new approach led by Assemblymember Chiu builds on the beneficial aspects of the former redevelopment agencies while providing safeguards against the abuses from decades ago. As a city, we cannot solve the housing crisis alone, and this bill is a great step in the right direction.” --San Francisco Mayor London N. Breed

“I witnessed the dissolution of redevelopment agencies as a Mayor and experienced firsthand the challenges of building affordable housing afterwards.  As a Legislator, I have worked diligently to develop new sources of funding for these projects. Unfortunately, with rents continuing to skyrocket, local jurisdictions still have insufficient funding and we must act urgently to pass a new and robust financing tool.” --Assemblymember Richard Bloom (D-Santa Monica)

“Since the dissolution of redevelopment agencies, local municipalities across California have struggled in search of alternative resources to finance and spur critical growth. This opportunity to create affordable housing and infrastructure financing agencies will help equip our communities with the means to make those necessary infrastructure investments, build affordable housing and enhance overall economic prosperity.” --Assemblymember Eduardo Garcia (D-Coachella)

“California’s housing crisis is the most pressing issue facing our state. It’s interconnected with every challenge facing California today - income inequality, traffic congestion, climate change and more. We need a more robust funding source to construct more affordable homes, and AB 11 is that source.  We know the redevelopment model of years past was successful in producing needed housing units and reducing blight in our communities. A modern form with strong oversight, coupled with local commitments can make tangible progress in building more homes for Californians and creating more vibrant communities.” --Assemblymember Todd Gloria (D-San Jose)

“Cities have struggled since they loss redevelopment as a  tool to energize depressed communities. This landmark legislation will pave the way for cities to aggressively respond to the growing housing crisis. I’m proud to be a part of this effort to tackle California’s affordable housing needs.” --Assemblymember Chris Holden (D-Pasadena)

“As California’s long struggle with supplying adequate and sufficient affordable housing continues, I am happy to co-author AB 11 to simply re-establish a tool we had for decades in this state.   Prior to its elimination, redevelopment was the single largest source of funds for affordable housing.  It is definitely time to bring it back.” --Assembly Speaker pro Tem Kevin Mullin (D-San Mateo)

Leaders Calling for an LIHTC Expansion

“We know low-income families and seniors are desperately waiting for safe, affordable homes, and California leaders must do everything possible to help people and communities in crisis – whether caused by recent wildfires or years of rising housing costs. Investing in the Low Income Housing Tax Credit will make it possible for people on limited incomes to have an affordable home by incentivizing private investment and leveraging additional federal resources into low-income housing development.” --Ray Pearl, Executive Director of the California Housing Consortium

“AB 10 will create more than 5,000 affordable homes for low-income Californians by using additional state tax credits to leverage $1 billion in new federal resources.  This new investment, made through a proven and efficient private-public partnership program, is a downpayment toward helping local communities address the shortfall of more than 1 million affordable homes that are needed to house California’s workforce. This bill is needed now more than ever after devestating wildfires have destroyed thousands of California homes significantly increasing the number of low-income families without affordable homes.” --Matt Schwartz, President and CEO of the California Housing Partnership

“Housing California commends Assemblymember David Chiu for his proactive push for big, bold solutions early in the 2019 legislative session that address California’s high housing costs.  By increasing the Low Income Housing Tax Credit to $500 million – an amount Housing California has pushed for years because of the program’s proven efficacy – we can build and preserve more affordable homes, in more communities. In areas that have been devastated by fires, this is especially important, as we can use this additional funding to help replace and increase affordable rental homes in those communities.” --Lisa Hershey, Executive Director of Housing California

"California's State Low Income Housing Tax Credit, first authorized in 1987, is an important resource for affordable housing production and preservation and now is the critical time for both modernization and augmentation of the program at a scale to address our major ongoing housing affordability crisis. This public-private partnership has a long track record of success with strong oversight and accountability protections in place to ensure the credits are utilized in the most efficient and cost-effective way possible. Assemblymember David Chiu's legislation is smart and focused and we appreciate his leadership." --Michael Lane, Policy Director of Non-Profit Housing Association of Northern California (NPH)

“The voters’ message this year could not have been more clear: we are in a housing crisis and Californians want bold investments to get more homes built today.  The state LIHTC program is critical for the construction of desperately needed homes for the most vulnerable Californians,  including low-income families, seniors, and the homeless.  Paired with the bond funds in Props 1 & 2, this bill provides necessary gap funding for shovel ready-projects.” --Senator Jim Beall (D-San Jose)

“It’s heartbreaking to see so many people living in cars, tents and on our streets.  These tax credits will help put a roof over more people’s heads by assisting affordable housing developers to build housing quickly.” --Senator Nancy Skinner (D-Berkeley)

“I am proud to coauthor AB 10, which will stimulate investment in affordable housing.  People in my district and across our state have faced the reality of being priced out of their homes and displacement. This is a tragic circumstance that burdens too many hard-working people and families, and it is one that I know well. We must pursue innovative housing solutions, like those in AB 10. Assemblymember Chiu and I are committed to finding solutions that will address the housing crisis in California.” --Assemblymember Wendy Carrillo (D-Los Angeles)

“The lack of affordable housing in the San Fernando Valley and across California is a huge threat to working families, students, seniors, veterans, and our state’s economy.  AB 10 is the aggressive response we need to meet California’s housing crisis and will dramatically increase investment in a program that is tested, proven, and highly effective.  I am proud to be a principal co-author of this important legislation and look forward to working closely with Assemblymember Chiu and our colleagues to ensure that it is swiftly enacted.” --Assemblymember Jesse Gabriel (D – San Fernando Valley)

“I’m proud to co-author AB 10 with Assemblymember Chiu and help make California a more affordable place to live for our working families. While we have made progress to invest in the tools and funding to start addressing our state’s housing crisis, there is still much to be done to ensure that people can afford to live in the communities where they work. I applaud Assemblymember Chiu for introducing AB 10, which would increase the state’s low-income housing tax credit and support the development of tens of thousands of housing units for families living in our state’s highest cost counties.” --Assemblymember Ash Kalra (D-San Jose)