Business & Economy

California's cap-and-trade program funds affordable housing

Cap-and-trade money will fund 82 apartment units at MacArthur Park Apartments which will have access to the Metro station serving the Red and Purple lines.
Cap-and-trade money will fund 82 apartment units at MacArthur Park Apartments which will have access to the Metro station serving the Red and Purple lines.
Los Angeles Housing Partnership

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The state's cap-and-trade program this year will provide $122 million in funding for affordable housing, including more than 800 new units in Southern California for lower-income residents.

The 28 winning projects are to be built to high energy-efficiency standards and will be located within a half mile of public transit stops.

California’s Strategic Growth Council, which picked the award recipients, said that's in keeping with the spirit of the cap-and-trade program that collects fees from polluting companies to put toward addressing climate change.

The housing projects will "reduce as much greenhouse gas as taking all the cars in Newport Beach and Citrus Heights up north off the road for a year," said Mike McCoy, the council's executive director.

The council is expected to sign off on the grant recipients in a June 30 vote.

Cap-and-trade money is now the only source of continuous state funding for affordable housing. So-called redevelopment agencies were once tasked with spending about $1 billion a year on affordable housing. But beset by management woes and controversy, they were eliminated in 2011 by Governor Brown in a cost-cutting move. Affordable housing advocates have mourned the loss of those funds ever since.

"(Cap-and-trade) definitely helps, but it doesn't fill the hole," said Paul Beesemeyer, Southern California director for the non-profit California Housing Partnership.

Beesemeyer added the cap-and-trade program only has so much reach because projects must have ties to transit.

"Redevelopment had more flexibility to address broader community needs like blight," Beesemeyer said.

He also criticized the program for limiting how much money each region of the state could receive.

McCoy acknowledged that the program alone will not fix the state's shortage of affordable homes, but he said cap-and-trade money will improve the housing supply over time.

McCoy said after this first year, about 20 percent of cap-and-trade funds will be dedicated to affordable housing — an amount estimated to increase to about $400 million next year.

McCoy added that state investment helps to leverage more private money for affordable housing projects.

"The banks really like state money being in the project," McCoy said. "It creates a lot of certainty. I always say, 'Our dollars are better than your dollars.'