City of Long Beach
HR&A worked with local governments across California to evaluate Joint Powers Authority bond transactions for moderate-income housing, ensuring more than $5 billion in tax-exempt financing maximizes public benefits and meets local policy objectives. Our project evaluations and white paper analysis, co-authored with the California Housing Partnership and CSG Advisors, guided negotiations for this emerging transaction type and informed Assembly Member Ward’s proposed AB 1850 legislation establishing minimum standards for JPA-sponsored housing conversions.
California’s housing supply crisis required innovative financing mechanisms to address the gap in middle-income housing options, leading to the emergence of Joint Powers Authority transactions that pair tax-exempt bonds with property tax exemptions to convert market-rate apartments into affordable rentals. These transactions, totaling over $5 billion for 9,000 units, exceeded current Low-Income Housing Tax Credit allocations but required careful evaluation to ensure public benefits justify significant tax exemptions and public investments. HR&A’s work focused on helping local governments navigate complex deal structures and policy implications of this new financing approach that addresses critical housing needs while requiring substantial public subsidy.
Our comprehensive evaluation framework guides local government negotiations and decision-making for JPA transactions, with successful applications including work for the City of Long Beach on the 215-unit Oceanaire conversion and 580-unit Midblock Civic Center new construction project, where we helped secure improved terms and stronger public benefits. The white paper we co-authored highlights the urgent need for careful evaluation of these transactions and establishes analytical standards that inform local government review processes. This work directly influenced policy development, with Assembly Member Ward proposing AB 1850 to establish minimum standards for JPA-sponsored middle-income housing transactions. Our analysis framework provides local governments with tools to balance the critical need for middle-income housing with responsible stewardship of public resources, ensuring these innovative financing mechanisms deliver maximum community benefit while addressing California’s housing affordability crisis.
