Affordable Housing Funds in Jeopardy Due to State Woes By SHELLY GARCIA Senior Reporter About $9.6 million of funding to help boost the city’s stock of affordable housing is in jeopardy as a result of the budget crisis in Sacramento. While the funding won’t halt development efforts, some say it could put a significant crimp in what was hailed as a major step toward solving the housing crisis in L.A. No one is yet certain of the fate of the funds, which come out of the city’s general fund, but officials say they are girding for the cutback. “We have tough times across the board and cuts are going to have to be made everywhere,” said Yusef Robb, spokesperson for Mayor James Hahn. “It was suggested it might be appropriate to reallocate that money for other uses.” The city almost three years ago established an Affordable Housing Trust Fund to help finance new construction of low-and moderate-income apartments by providing subsidies to developers. The fund, financed through a combination of federal, state and city money, was expected to reach $100 million by 2005 through a series of matching programs including a share of a $2.1 billion war chest established by the state’s Proposition 46. City officials point out that the Prop 46 funding is unaffected by the budget crisis. But the funds available are based on a formula that takes into consideration city funding contributed to the effort, and developers could be at a competitive disadvantage if the city’s funding is withdrawn. Sacramento’s budget woes could also affect tax credits available. So far, the Housing Trust Fund has spent about $26 million, leveraging more than $175 million worth of state and federal financing, tax credits and others for development. In 2003, the trust fund program generated about 1,100 new housing units.
