California pledged $500 million to help tenants preserve affordable housing

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Luke Johnson and his neighbors thought they had found the perfect solution to avoid being displaced from their Silver Lake, Los Angeles fourplex: A state program was offering $500 million to help tenants, community land trusts and other affordable housing developers buy buildings at risk of foreclosure.

With their longtime landlords set on selling the building, Johnson and his neighbors persuaded them to sell to a community land trust that pledged to keep rents low.

But six months later, the state program has vanished after failing for three years to give out any of the grants and loans it promised. The deal with their landlords has collapsed. That leaves Johnson, 85, and his husband unsure whether they’ll be able to stay in the rent-controlled two-bedroom apartment where Johnson has lived for nearly half a century.

The sudden disappearance of half a billion dollars of state money meant to help community land trusts has left some housing advocates questioning California’s commitment to preserving existing affordable housing, a strategy that’s less flashy than building new units but can also be less expensive.

“It’s a struggle for us and I’m sure for a lot of other people who counted on getting that grant and didn’t get it,” Johnson said.

State lawmakers created the Foreclosure Intervention Housing Preservation Program in 2021. It was a watershed moment for community land trusts, nonprofits that purchase land and preserve it as permanently affordable housing by renting or selling the buildings on it to low- and moderate-income residents. Residents then manage the property cooperatively.

While community land trusts have tripled in number in California over the last decade, springing up everywhere from coastal and inland cities to tribal lands and the Mexican border, they often struggle to raise enough money to compete with private developers. Access to a dedicated pot of state money was poised to be a game-changer for both the trusts and cities seeking to prevent displacement of low-income residents, said San Francisco Supervisor Dean Preston.

“We had hoped the state would help San Francisco and other cities that want to really ramp up these programs,” Preston said. “(Community land trusts are) a very effective, quick and permanent way of creating truly affordable housing with resident control.”

The state planned to dole out the half-billion dollars in loans and grants over five years, funding purchases of financially distressed buildings of up to 25 units.

Three years in, however, the state agency charged with developing the program, the Department of Housing and Community Development, had yet to give out a single dollar.

This spring, with California facing a projected $56 billion budget deficit, some lawmakers began raising concerns.

“It’s the kind of thing that you look at and it makes your head explode,” Assemblymember Jesse Gabriel, who chaired the Assembly’s budget committee, said in an interview. “This is something of importance to everyone in California, and yet we’re sitting here with this tremendous allocation of resources and making zero progress. That is totally unacceptable.”

Lawmakers scrapped the program in June.

It wasn’t the only state spending on the chopping block this year. But community land trust advocates complained that the state’s slow rollout undermined the program before it could get started.

“We got into the 2021 budget expecting the funds would be available within a year or year and a half,” said Leo Goldberg, co-director of policy at the California Community Land Trust Network. “If the program had been rolled out, there would have been successes to point to that would have made it easier to defend.”

Three years in, zero progress

Johnson said he immediately felt at home in the diverse Silver Lake of the 1980s, with its vibrant and organized LGBTQ community, Latino families socializing on porches and Russian immigrants filling Orthodox churches. Over the last 40 years, he’s watched the neighborhood gentrify as hipster professionals moved in, bringing their cash with them.

Johnson’s now-husband, Osbey, came to house-sit in 1990 and never left. They and their neighbors, friends who have all lived in the building for at least a decade, hosted community events in the complex’s back garden.

When their landlord signed a contract to sell the building to a for-profit developer, they feared displacement. Average rent for a two-bedroom in Silver Lake had ballooned over the years to nearly $4,000 per month, according to Zumper.com, about four times what Johnson and his husband currently pay.