Affordable/Workforce Housing Study
Chapter Three

Table of Contents

Executive Summary

Introduction: Defining Affordable and Workforce Housing

Chapter 1: Monterey County Housing "Least Affordable in U.S."   

Chapter 2: FORA’s Original Affordable Housing Goals

Chapter 3: Barriers, Opportunities and Strategies

Chapter 4: Models and Examples

Chapter 5: Federal, State, Local and Private Resources

Chapter 6: Findings and Recommendations


Chapter Three:



Among the barriers to producing more affordable/workforce housing at Fort Ord are the significant cleanup and mitigation costs associated with the base's reuse. Thousands of acres of Fort Ord are currently unusable due to contamination, unexploded ordinance and below code infrastructure. Transfer of land and buildings has been slow, resulting in extraordinarily frustrating loss of potentially salvageable housing.

Through Congressional efforts, especially those of Representative Sam Farr, the Army determined that FORA could receive the land through a no-cost economic development conveyance. In the case of Fort Ord, the "no cost” land is transferred with provisions requiring that any revenues received be reinvested in the capital cost of redevelopment. The redevelopment plan that has been devised by FORA (according to the 2001/2002 CIP) is estimated to cost over $300 million. In a memorandum to a Congressional subcommittee in August, 2002, FORA listed its direct costs at "over $500 million.”

To pay for over $300 million (or $500 million) in infrastructure and mitigation expenses identified in the FORA Base Reuse Plan and the EIR, FORA is collecting fees on land development. They currently assess fees on developers, primarily housing developers, who will then pass the costs on to buyers in the overall purchase price of the property or house.

FORA jurisdictions (cities and the county) and their developers have been provided with an option to redistribute the fees or provide some type of subsidy through redevelopment tax increment or other revenue resources to offset these particular costs. However, the CIP also hopes to use tax increment revenue, not to produce affordable housing, but to augment revenues to cover "obligatory CIP projects” costs. (CIP, pg 7)

FORA's Difficult Job

Though affordable housing gets built all the time, it is not easy and uncomplicated in the best of circumstances. Affordable housing development generally requires a package of subsidies, grants and below-market financing to be feasible.

The challenges of financing mixed income housing (housing that includes affordable/workforce units) requires for-profit or nonprofit developers who are skilled and experienced in putting complicated deals together and managing the associated risks. Developers need to be solicited on the basis of their degree of motivation and expertise in producing mixed income/affordable housing.

FORA has a number of barriers to overcome in order to produce affordable housing.

Overcoming Barriers

The production of affordable housing in any jurisdiction in the best of situations takes highly motivated leadership and an intense focus on working through the issues systematically.

There are no strategies or recommendations that represent an immediate, transformational solution. Success will require tailoring strategies that have worked elsewhere to FORA's unique situation and acquiring the resources necessary to implement those strategies.


Some communities have created or increased local funding for affordable housing. They have focused on increasing redevelopment funds targeted for affordable housing is a very effective way to provide more support for affordable housing. California law requires at least 20% of redevelopment funds be set aside in a special fund to subsidize the construction and rehabilitation of low and moderate income housing. Many communities have increased this percentage to high rates such 30% or even 50%.

Housing Trust Funds

Housing trust funds have been successfully used in 280 locations a across the U.S. They are distinct funds established by legislation, ordinance or resolution to receive public revenues, which can only be spent on housing.  The key characteristic of a housing trust fund is that it receives on-going revenues from dedicated sources of public funding such as taxes, fees or loan repayments. Typically, legislation or an ordinance is passed that increases an existing revenue source, such as a real estate transfer tax, with the increase being committed to the housing trust fund. 

Housing trust funds are a local expression of the commitment to build affordable housing and to find new ways of doing so. Housing trust funds provide a more secure and sensible way to fund needed housing. Funds are often used to leverage additional funding; on average, each dollar spent by a trust fund has leveraged an additional seven.

Key Components of a Housing Trust Fund

  1. Purpose of the fund.
    Housing trust funds are established to provide the financial resources needed to address the housing needs of low and very low income households. Some HRTs extend this mission to moderate income; others focus on the needs of the homeless or other special groups. They serve the unmet existing housing needs of their residents.
  2. Administration
    Most housing trust funds are administered by the agency or department that typically handles federal housing programs, such as HOME and CDBG.  Staff will be assigned to run day-to-day operations of the housing trust fund. It is common for a Board to be established with oversight responsibilities for the fund. The Board is usually appointed by the participating members and represents nonprofit developers, service providers, private industries, unions, low income citizens, and others. It is not uncommon for the City Council or County Commissioners to have final say over the direction of the fund and the awards made, but the Boards bring representation from the community as well as support from all segments involved in housing issues.

  3. Programs
    Housing trust funds are designed locally so they take advantage of unique opportunities and address specific needs that exist within a community. Housing trust funds support virtually any housing activity that serves the targeted beneficiaries and would typically fund new construction and rehabilitation, as well as community land trusts and first time homeowners.

    Most housing trust funds contain components, in addition, that reflect their unique purpose. They often require that the units supported remain affordable to the intended beneficiaries for the longest possible period; and they typically encourage leveraging of other public and private resources. Funds are usually made available as loans or grants through a competitive request for proposal process. Projects are typically ranked on a number of pre-established criteria. 
  1. Revenues
    Nearly forty different sources of revenue have been dedicated to existing housing trust funds. Most housing trust funds in existence have revenue from a tax or fee dedicated to the Fund. Total annual revenue collected by trust funds range from a high of $180 million each year to less than $100,000 annually. Overall, housing trust funds commit some $750 million to housing projects each year through dedicated revenue streams along with additional funds through appropriations and other special funds. 

The revenues most commonly committed to housing trust funds include: exactions required of developers, real estate transfer taxes, or document recording fees. New sources are constantly being secured including: unclaimed utility deposits, gaming revenues, interest from rainy day funds, among others.  Los Angeles sell ads on bus stops and other public spaces and dedicates the revenues to its housing trust fund.

Summary of Housing Trust Funds in the California and U.S.

There are ten city housing trust funds in California (administering agents in parentheses): Berkeley (Housing Dept), Cupertino (Community Development Dept), Los Angeles (Dept of Housing), Menlo Park (Housing and Redevelopment Agency), Morgan Hill, Business Assistance and Housing Service), Palo Alto (Dept of Planning and Community Development), San Diego (Housing Commission), San Francisco (Mayor's Office of Housing), Santa Monica (Housing and Redevelopment Division) and West Hollywood (Rent Stabilization and Housing Dept).

There are four California county housing trust funds (administering agents in parentheses): Alameda County (Housing and Community Development Department); Napa County (Housing Authority); Santa Clara Housing Bond Trust Fund (Office of County Executive) and Santa Clara Housing Trust (Housing Trust of SC County).

There are one multi-jurisdictional housing trust funds in California and two others in the U.S. and their administering agents are: Sacramento City and County Housing Trust Fund (Redevelopment Authority); ARCH Eastside Housing Trust Fund (ARCH: A Regional Coalition for Housing) in Seattle, Washington; Columbus/Franklin County, Ohio (Columbus Housing Trust Corporation).

Revenue Sources

The most common revenue source for a state housing trust fund is the real estate transfer tax. Other options include budget stabilization funds, interest from real estate escrow or mortgage escrow accounts, and document recording fees.

The most common revenue source for a county housing trust fund is the document recording fee; other sources include sale of county owned land; sales taxes, real estate transfer taxes; inclusionary payments in–lieu fees, developer fees, fees from condominium conversions, sales tax, food and beverage taxes, non-residential impact fees, loan repayments and general funds.

The most common revenue source for a city housing trust fund is a linkage program-impact fees placed on non-residential developers to offset the impact of their development on the housing market. These fees are part of zoning ordinances. Other city housing trust revenue sources include:

business license tax, sales tax, housing excise tax, redevelopment tax increment, sale or donation of city owned land, city-owned parking revenues, settlement funds, inclusionary payments in-lieu fees, property taxes, real estate excise taxes, UDAG repayments, CDBG loan repayments, hotel/motel (TOT) taxes and general funds.

Multi-jurisdictional Housing Trust Funds

There are three multi-jurisdictional housing trust funds in the U.S.: Sacramento City and County and Columbus/Franklin County, Ohio, which are combined city and county funds, and ARCH Eastside Housing Trust Fund in King County, Washington (Seattle and environs), which includes a county and 13 cities within that county.


Sacramento City and County HTF is administered by a redevelopment agency with jurisdiction over both the city and county. Columbus and Franklin County HTF is administered by a nonprofit organization with its own board. ARCH is a regional nonprofit corporation that was established by the participating jurisdictions. All three multi-jurisdictional HRTs have two staff people administering their trust funds.


All three have an oversight board; one has a citizen advisory board. Sacramento City and County and Columbus/Franklin HRTs award only loans; ARCH provides loans, grants and other forms of assistance.

Application Process

Sacramento and ARCH use a request for proposal process; Columbus/Franklin has an open year-round application process.

Eligible Recipients

All three make nonprofit and for-profit developers, units of government and housing authorities eligible recipients of their awards. Each has different income targeting requirements. In Columbus/Franklin, the funds can serve those earning 120% or less of median income. ARCH HTF serves those earning 80% of less of the area median income.

Funding Purposes and Services Offered

All three make new construction, rehabilitation, acquisition and pre-development costs eligible for funding. Two provide a match for other state and federal funds and down payment assistance. Two of the funds impose long term affordability requirements on the projects they support.

Funding Sources

The Sacramento City/County HTF receives impact fees from non-residential developers. Developers pay a fee to the housing fund, or meet up to 80% of their obligation by directly building affordable housing. This generates about $7 million a year and has led to the creation of 2,714 housing units since 1989.

The Columbus/Franklin HTF receives hotel/motel taxes from the City and general funds from the City and County. This generates about $2 million per year.

ARCH receives about $2.5 million a year in a variety of funding sources from the participating jurisdictions. Of the $13 million in funds and surplus land made available to the fund since 1993, 60% has been made available for new construction loans and pre-development financing. That supported the creation of over 1650 housing units valued at over $100 million (other funds coming from King County, state, federal and private sources.

Leveraged Funds

The three multi-jurisdictional trust funds have attracted attract about eleven to thirteen times their investment in housing construction.

Economic Impact

Sacramento estimates from an input-output analysis that direct housing construction of 2700 units had a total regional economic impact of $582 million. Employment generated is estimated at 2,726 worker years, with more than $5.7 million in payroll taxes, $1.4 million in retail sales taxes and $2.2 million in property tax revenue to local government.

Community Land Trusts (CLTs)

CLTs are typically private, non-profit corporations set up to acquire and hold land for the benefit of a community and to provide affordable access to land and housing. They prohibit speculation and absentee ownership. They preserve the long-term affordability of housing. CLTs work in cooperation with local governments. Some municipalities and counties allocate land, Community Development Block Grant funds and HOME funds to CLTs, as well as other available resources

CLTs acquire property--donations of property from cities or counties and property or funds from corporations and individuals. CLTs use various kinds of subsidies to make housing and land use more affordable for people who cannot compete in the market. They keep housing affordable for future generations by retaining ownership of land where housing is developed, thereby controlling the rise of some of the appreciation homeowners receive when they sell their homes.

Access for Low-Income People
The land trust provides access to land and housing for people who might otherwise be priced out of the housing market. Some land trust homes are rented, but, when possible, the land trust helps people to purchase homes on affordable terms. The land beneath the homes is then leased to the homeowners through a long-term (usually 99-year) renewable lease. Residents and their descendants can use the land for as long as they wish to live there.

Prices Stay Affordable
When land trust homeowners decide to move, they can sell their homes. The land lease agreement gives the land trust the right to buy each home back for an amount determined by the land trust's resale formula. Each land trust sets its own resale formula - to give homeowners a fair return for their investment, while keeping the price affordable for other lower income people.

Owner-Occupancy is Preserved
The land lease requires that owners live in their homes as their primary residences. When homes are resold, the land trust can ensure that the new owners will also be residents - not absentee owners.

Multi-Family Housing
A land trust can work with various ownership structures for multi-family buildings. The land trust itself may own and manage a building, another nonprofit may own it, or the residents may own it as a cooperative or as condominiums. In each case, the land trust will have provisions to ensure long-term affordability.

Helping New Homeowners
Land trusts can provide a variety of training opportunities and other services to first-time homeowners. They can provide crucial support if homeowners face unexpected home repairs or financial problems. In these cases the land trust can often help residents to find a practical solution, and may help to make necessary financial arrangements.

Flexible Approach

In addition to affordable housing, land trusts may make land available for community gardens, playgrounds, economic development activities or open space, and may provide land and facilities for a variety of community services.

Land trust land is held permanently - never sold - so that it can always be used in the community's best interest. The residents, however, may own the buildings on land trust land.

CLTs develop their own membership criteria. Some CLTs provide homeowner training and assistance, financial management, resident training and selection.

Community Land Trusts--Key Features

Dual ownership-the CLT owns the land and sells the improvements to an individual homeowner, or a cooperative housing corporation, a nonprofit developer of housing or some other nonprofit, government or for-profit entity.

Leased Land-the CLT plans never to resell the land and provides for the exclusive use of its land by owners of any buildings located upon it through long term ground leases.

Perpetual Affordability-the CLT retains an option to repurchase the improvements that are located upon its land should their owners ever choose to sell. The resale price is set by a formula, contained in the ground lease that is designed to give present low-income homebuyers fair access to housing at an affordable price.

Perpetual Responsibility-the CLT does not disappear once a building is sold to a homeowner, a co-op or another entity. As owner of the land underlying multiple buildings and as owner of an option to repurchase those buildings, the CLT has a continuing interesting in what happens to those buildings. The ground lease gives the CLT the right to step in and force repairs, or step in the case of default to cure it and stop the foreclosure.

Community Control-the CLT is a community-based organization drawing some members form its leaseholders.

Flexible-the CLT is a tool of great flexibility, accommodating a variety of land uses and a diversity of building tenures and types.

An example of a successful land trust and housing trust collaboration is the

The Berkeley Housing Trust Fund has supported (through the Northern California Land Trust) ten projects preserving more than 100 units of affordable housing with an average housing trust fund subsidy of $38,000.


Successful affordable housing production requires a sense of shared responsibility between the public, private and nonprofit communities and a cooperative regional government approach. Some experts say that the only way to tackle affordable housing is regionally. Since affordable housing is harder to finance (financing is available but needs to be pieced together from a variety of sources), financing expertise and leadership are imperative for housing efforts to succeed. It is big boost to have a lead local lender with experience or strong desire to work with the developers and with national affordable housing underwriters.

The first place to start to increase FORA's capacity in affordable housing is by engaging the local nonprofit housing developers. Another important source of technical assistance is the Center for Community Change, who has a San Francisco Office. CCC was established in 1969 and provides technical assistance and training on creating local housing trust funds. Their website is; phone number (415)982-0346.

FORA needs a workforce housing coordinator who knows the players and the vehicles that create high quality, well-designed workforce housing. Some of the resources available to such a Coordinator are:

Mixed Income Housing Development Technical Assistance is available from the Innovative Housing Institute. Innovative Housing Institute services include 1) review or market analysis to confirm the features required for a successful mixed-income development; 2) review the master schedule and milestones to ensure financing deadlines and requirements are met; 3) review of the project budget; 4) advice on the developer selection process; 5) review and recommendations with regard to the arrangements for private debt and equity financing and finalize terms of all public and private financing; 6 recommendations for the funding of supportive and community service programming. In essence, IHI acts as the agency's advisor and representative in planning for and implementing complex real estate transactions. Their website and their phone number is (301)933-5949.

One of the FORA jurisdictions may be able to loan a housing executive or specialist for a limited period to kick-start a number of actions and strategies. The Housing Authority of Monterey County recently became entangled in an argument about what it would cost a developer to build workforce housing on Fort Ord. Instead of getting into public debates about the subject, or matching experts and wits to disprove each other, FORA and the Housing Authority should work together to solve housing problems. If a sufficient quantity of affordable housing is to be produced at Fort Ord, partnerships created with nonprofit housing developers are likely to be a key element.

Attract New Funding and Use Existing Funding to Create New Housing

The fundamental principle of affordable housing is that its production is dependent on the availability of land and its cost. Land intended for affordable housing that is low cost, no cost or below market will attract affordable housing developers even if their profit is limited to 10-15%. (This is the percentage range accepted by developers of affordable housing in Santa Clara County).

Jurisdictions serious about developing affordable housing use a variety of funding mechanisms to subsidize affordable and workforce housing, including:

Tax Options

Community Second Mortgages, also called "piggy-back mortgages” and "silent seconds” can simultaneously reduce the size of the first mortgage and overcome wealth gaps. A second mortgage that at loan to value ratios below the level that requires mortgage insurance (typically 75-80%) can both reduce the lender's collateral risk as well as reduce the borrower's monthly debt service costs, overcoming income gaps.

Home buyers in three California markets led the country in percentage of homes bought with second mortgages. 10.1% of homebuyers in the San Francisco area in 1985-1988 used second mortgages to purchase homes with a median value of $300,000. In the San Jose area, the numbers were 9.1% of homebuyers using second mortgages to purchase homes with a median value of $285,000. In Oakland, 8.4% of homebuyers used seconds to purchase homes with a median value of $182,000.

In 1998-2000, Neighborhood Reinvestment Corporation's Neighborworks Campaign for Homeownership, 20,000 low-and moderate-income homebuyers were served by $1.3 billion in private lender first mortgages leveraged by $46 million in second mortgages, primarily from nonprofit revolving loan funds. These fully amortized loans will be recycled for future generations of homebuyers.

EQ2-Second Mortgage Capital--One emerging vehicle for second mortgage capital is the equity equivalent investment, called EQ2. These investments are structured as a long-term, deeply subordinated loan to a nonprofit, with features that make it function like equity. Financial institutions receive enhanced lending credit under the Community Reinvestment Act (CRA). The investment is treated as a form of fully subordinated secondary equity capital, and considered a general obligation of the nonprofit organization not secured by any assets. The lender cannot accelerate payments-unless the organization ceases operations, and the interest rate is not tied to any income generated by the organization. EQ2's rolling terms results in an indeterminate maturity, but interest payment are required during its term, although at a rate well below market rates. The bank is entitled to claim a pro rate share of the incremental loans by the organization to which the bank has invested. EQ2 represents a promising new source of lending capital for second mortgages.

Lease-Purchase --

Lease-Purchase is an option that nonprofit organizations can use to help borrowers who have successfully managed their credit obligations in the past, but have insufficient savings for a down payment. With Lease-Purchase, nonprofit organizations can purchase homes that can be leased with an option to buy. Part of the rent payment is saved for the purpose of accumulating the down payment and closing costs needed to buy the home. The mortgage may then be assumed by the borrower from the nonprofit at a later time, usually three to five years after the initial lease date.

Employer Assisted Housing-Employer assisted housing is often offered as an employee benefit in high cost areas as a means of recruiting, retaining and rewarding employees. The programs can be customized to fit the needs of the employer-private, public, university, hospital, nonprofit organization. The most common Employer Assisted Housing benefits are grants, forgivable loans, deferred or repayable loans, matched savings programs, interest-rate buydowns, shared appreciation, and home-buyer education. Funds are commonly used toward down payments, closing cost and interest rate buydowns. The Employer Assisting Housing benefit may be available to all employees or limited to specific segments of the employee population, such as non-management staff or first-time homebuyers. Most Fannie Mae lender-partners can assist employers in matching the best employer housing benefit structure to support community housing strategies.

Fannie Mae helps all types of companies -- including private employers, nonprofit organizations, universities, hospitals, and public employers -- customize and offer an EAH benefit. The most common benefits are grants, forgivable loans, deferred or repayable loans, matched savings, interest-rate buy-downs, shared appreciation, and home-buyer education (provided by an employer-funded counseling agency).

Funds are commonly used toward down payments, closing costs, and interest rate buy-downs.An EAH benefit may be available to all employees or limited to specific segments of the employee population, such as non-management staff or first-time home buyers. An EAH may be available for all homes, or homes that meet specific criteria, such as primary residences or homes located in specific neighborhoods.

Multi-jurisdictional Affordable Housing Development Financing

Tax increment pooling-combining of funds from several tax increment districts that may be leveraged for the benefit of all the districts.

Tax increment financing (TIP)-method of financing in which improvements made in a designated area are paid by the taxes generated from the added taxable value of the improvements.

Supplemental Redevelopment Agency funding-Redevelopment agencies can agree to provide supplemental funding for a special purpose, over and above the 20% funds required by law to be set aside for affordable housing.

Interest/Repayments/Miscellaneous-Fees received as a review agency for Federal and State Low-Income Housing Tax Credit (LIHTC) applications, bond issuance fees, loan repayments, in-lieu payments.

Federal Funds-Community Development Block Grant (CDBG) fund; HOME Investment Partnership funds. Also consider Emergency Shelter grant funds and Housing Opportunities for Persons with Aids (HOPWA).

Single jurisdiction

Bond Funds-Jurisdictions can issue bonds to finance affordable housing construction.

Mortgage Revenue Bonds and Tax Exempt Revenue Bonds--The most common forms of financing for affordable housing are Mortgage Revenue Bonds (MRBs) and Tax-Exempt Revenue Bonds. MRBs are generally used to assist first-time homebuyers in the purchase of either new or existing housing, while tax-exempt revenue bonds are used to assist developers of multi-family rental housing units to acquire land, construct a new development or rehabilitate an existing unit. Tax-exempt revenue bonds do not require voter approval.

Federal and state restrictions require that tax-exempt bonds used to increase affordable housing opportunities include a minimum of 20 percent of total units be affordable to very low income households (less than 50% of AMI). Projects with deeper affordability (often 100 percent) have a much better chance of getting bond allocations. Issuing bonds is a complex enterprise, generate administrative costs and are not cost effective for small projects.


Success strategies used by jurisdictions to increase affordable housing include:

  1. Establishing a coalition of local governments that can offer a one-stop shop on fast-track permitting, special tax credits, funding, and site availability.

  2. Linking workforce housing to other land uses, offering more mixed-use opportunities and density bonuses in exchange for workforce housing development.

  3. Increasing or dedicating a portion of existing real estate transfer taxes, with the additional funds dedicated to workforce housing development; or create a housing production trust fund dedicated to workforce housing.

  4. Expanding employer-assisted housing programs

  5. Converting more non-residential sites (such as brownfields) to mixed income and affordable residential use.

  6. Adopting inclusionary housing policies

  7. Soliciting donated or discounted land

  8. Allowing accessory apartments-(AKA in-law apartments or granny flats)

  9. Incentivizing mixed use development

  10. Offering density bonuses

  11. Reducing lot sizes

  12. Charging linkage fees

  13. Streamlining permit/review process

  14. Reducing street right-of-way and pavement width

  15. Encouraging nonprofit and for-profit developer partnerships

  16. Identifying land for compact affordable housing development

    Through the housing element, cities are required to identify an inventory of land suitable for residential development. Communities must zone for "by right” multi-family housing development if the inventory of sites indicates that there are insufficient sites to meet the regional housing needs allocation. Communities go farther still by establishing affordable housing overlay zoning that permits, by right, the development of affordable housing on medium and high-density residential properties that are covered by the overlay.

  17. Increasing densities & reduce parking requirements

    Medium density residential zoning can increase to 20 units per acre, while high density residential zoning can increase to 30 units per acre. Higher densities allow for more housing choices, by encouraging housing styles such as townhomes, condos, apartments and sing-room-occupancy developments.

    Made higher density zones near current and future transit and near shops and amenities.

  18. Creating or increasing local funding for affordable housing

    a.    Increasing redevelopment targeted for affordable housing is a very effective way to provide more support for affordable housing. California law requires at least 20% of redevelopment funds be set aside in a special fund to subsidize the construction and rehabilitation of low and moderate income housing. Many communities have increased this percentage to high rates such 30% or even 50%.

    b.    Using other local revenue sources including municipal bonds, local taxes and revenues, general obligation bonds, mortgage revenue bonds, and/or tax exempt revenue bonds, which can be devoted to a Housing Trust Fund.

Brownfields Redevelopment

Environmentally distressed properties, or brownfields, are an important development resource at the former Fort Ord. There are private companies willing to purchase contaminated property, take all other entities out of the chain of title, provide environmental insurance and develop the property, even housing. Through the right combination of private, community and government action, along with technical expertise to construct a viable plan, brownfields and perhaps even Superfund sites at Fort Ord can be reclaimed.

A self-insured private brownfields remediation company could buy extant Fort Ord brownfields from the appropriate jurisdiction, earning the right to remediate them now and then either develop or re-sell the cleaned up land to a developer. The company could include an affordable housing component in their development or pay an in-lieu fee that would support affordable housing development elsewhere.

Filling Affordable Housing Gaps: Matching Strategies to Constraints




Below Market Rate Mortgage

Mortgage Revenue Bonds


Amortizing Piggyback Second Mortgages

Revolving Loan Fund


Direct Housing Payment Subsidy

Section 8 Vouchers for Home Ownership


Housing Payment Subsidy Through Tax Code

Mortgage Interest Deduction


Construction/Development Subsidy

Low Income Housing Tax Credit; HOME; CDBG


Substantial Rehabilitation Subsidy

203k rehab loan insurance; HOME; CDBG


Down payment Grants and Gifts

Individual Development Accounts (IDA)


Relaxed Underwriting Standards

Fannie Mae Community Lending; Freddie Mac Affordable Gold


Homebuyer Education

Neighbor Works (Fannie Mae), HUD Counseling


Mortgage Insurance

FHA or private


(Source: Mind the Gap, Collins and Dyla, LISC, 2000, Table 11)

California Density Bonus Requirement

To address the statewide affordable housing crisis, the State of California requires all communities to offer a 25% increase in the density of any development if they provide a minimum of 20% of the units as affordable housing. In addition to these measures, some counties and cities mandate the inclusion of a certain percentage of affordable housing in all developments over a certain threshold size. Jurisdictions determine the specific terms (percent of units, who is eligible, whether on-site or off site, fees in lieu of the inclusion, length of affordability requirement).

Cross Subsidy-Creating Mixed Income Housing Developments

The following are the highlights of study of U.S. mixed income housing developments sponsored by Joint Center for Housing at Harvard University. The study found that while mixed income developments have proved "effective in producing high-quality housing, overcoming community barriers and producing housing more cost-effectively.”



Illustrative Mix of Incomes

% of units

Illustrative Mix of Incomes

% of AMI

Moderate Income Inclusion

Predominantly market-rate developments that include moderate income units

80 %




Low Income Inclusion

Predominantly market-rate developments that include low-income units





Broad Range of Incomes

Serves market-rate, moderate income or low income households and very low income households







Market-Rate Inclusion

Predominantly low income developments that include market rate units





Affordable Mix

Serves moderate or low income and very low income households





Moderate-Income Inclusion

Low Income Inclusion

Broad Range of Incomes

Affordable Mix


Some of the regulatory and financial hurdles that FORA faces can be overcome by enabling legislation and appropriations.  On the House Appropriations Committee, there are at least 4 subcommittees that are interested in either workforce housing or the successful redevelopment of former military installations.  In the Senate, there are also four appropriation subcommittees that are interested in workforce housing.  Other committees such as the Senate Finance Committee could be helpful in helping provide incentives to developers of workforce housing in the area.  There are authorizing committees that can authorize pilot projects for brownfields redevelopment, deconstruction projects, road demonstration, UXO removal, new market crediting and other kinds of demonstration that might not be directly linked to workforce housing, but catalyze workforce housing. 

Workforce housing challenges at Fort Ord are understood by its legislators, who are willing to help either by seeking funding or relaxing barriers. Two in FORA's Congressional delegation sit on committees that directly affect appropriations and the reuse of military installations.  The senior Senator from California is on the Senate Armed Services Committee and has made it a point to ensure that the Army upholds its responsibilities in rapid clean-up and would likely be receptive to pilot projects to ensure Fort Ord is successful.  Rep Farr sits on Appropriations Committee. Likewise, the Minority Leader of the House of Representatives is from the San Francisco Bay area.  All this adds up to a very influential delegation who could be engaged in the workforce housing challenge.

FORA should develop a long term legislative strategy and work closely with the California legislature and the Congressional delegation to seek funds and/or relax barriers to produce more workforce housing.

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