Affordable housing: What does it mean, and what does it look like in Long Beach?

Affordable housing — it’s become a buzzword for politicians, a branch of social services, a rubber stamp often repeated when the newest downtown development is approved and a vague promise of housing for all. 

So what does it mean when Long Beach says it’s building more affordable housing? How much affordable housing can realistically be built in a city with nearly half a million residents and little land up for grabs? What are the hurdles in the way of affordable housing, and what help is available?

Long Beach is one of hundreds of cities in the United States grappling with these issues. In 2022, the City laid out its housing goals as part of the General Plan, which included “creating” 26,500 additional housing units by 2029 (both affordable and market rate). 

In order to accomplish this goal, Long Beach has to apply and compete for state and federal grants, dish out loans and incentivize developers to build housing cheap enough for residents to afford, but pricey enough for developers to still make a profit. 

We’ll attempt to explain each piece of the affordable housing web as we know it, diving into how Long Beach approaches the issue, the role state and federal funding plays and what the numbers are telling us. 

A Brief History on Affordable Housing

Pre-Great Depression, Americans were on their own when it came to housing. The government became involved in housing and the national housing stock in 1934 when it created the Federal Housing Administration as part of President Roosevelt’s “New Deal” to stimulate the economy.

The creation of the Federal Housing Administration resulted in the home ownership methods we still use today: lower down payments and long term mortgage payments made to a bank that technically owns your home. This helped well-off white people buy and own their own homes, and in 1937, Congress passed the U.S. Housing Act to create more public housing (government-owned) for lower-income residents. 

It soon became clear that the cost of creating and maintaining public housing was not being met by the revenue from low-income renters. The Federal Housing Administration became the Department of Housing and Urban Development (HUD), and in the 1960s, it began providing government subsidies to public housing agencies to help bridge the gap in revenue and costs. 

The federal government still provides subsidies to cities that meet certain requirements, which in turn rewards these grants to their public housing agencies that provide affordable housing. 

In 1969, Congress passed the “Brooke Amendment,” creating the affordable housing income threshold still used today. Under the amendment, a public housing resident could not be expected to spend more than 30% of their income on rent. 

Around the same time, Congress began incentivizing developers with low interest rates and subsidies if they built affordable housing or rehabilitated a building to become affordable housing.  

These incentives resulted in a housing boom in the 1970s, but many developers opted out of affordable housing programs, paid back their subsidies early and increased rent in the following decades. According to the California Housing Partnership, between 1997 and 2022, the state lost 22,078 affordable homes due to expiring regulations and units returning to market rate. 

The ‘70s also saw the creation of Section 8 rental assistance programs that are federally funded and still in use today. Thereafter, local governments were given more freedom to create affordable housing through federal block grants given to housing trust funds, then awarded to developers. 

How Does Affordable Housing Work Today?

The United States still uses the 1969 “Brooks Amendment” 30% threshold for income-restricted affordable housing, meaning a renter can only spend up to 30% of their income on rent. Income limits are updated annually and published by the U.S. Department of Housing and Community Development as well as the California Department of Housing and Community Development (HCD). 

The two branches take the median income in each California county and use that as the annual basis for affordable housing requirements. These income limits determine who is eligible to apply for housing funded by HUD, which includes Section 8 housing, Emergency Housing Vouchers or rental assistance programs. 

Most affordable housing developments are made for families with incomes of 60% or less than their area’s average income. 

Here are the most recent income limits for Los Angeles County, as determined by HCD. For a single resident to qualify for “extremely low-income” housing, they must make less than $26,500 a year, and so forth. 

Income-restricted affordable housing developments determine their income threshold based on the amount and type of assistance it received from the state or federal government. Federal, state and local governments offer better loan terms in exchange for the developer offering lower rents for an agreed upon amount of time. 

Developers historically have had to follow state and local guidelines, or inclusionary housing policies, in order to streamline development and qualify for grants and loans. In September 2023, California legislators introduced a slew of bills that would remove environmental regulations and open up more land for developers willing to follow affordable housing and labor guidelines. 

In Long Beach, the inclusionary housing policy is set at 11%, meaning a developer has to include 11% of affordable units locked in for 55 years in its plans in order to receive favorable loans. California has its own set of inclusionary policies, but local governments are permitted to create their own. 

What Does Affordable Housing Look Like In Long Beach? 

In Long Beach, affordable housing developments begin with the Long Beach Community Investment Company (LBCIC). 

The LBCIC is a nonprofit that applies for state and federal funds when the government announces a Notice of Funding Availability. These grants have certain requirements, such as the Transit-Oriented Development Program for developments near public transit and the Veterans Housing and Homelessness Prevention Program. 

The LBCIC spends 30 to 60 days identifying and applying for these grants, said Meggan Sorensen, Housing and Neighborhood Services Bureau Manager. These grants are loaned to private developers that meet Long Beach’s inclusionary policy standards, which helps developers leverage more state and federal grants. 

Since Long Beach is competing with hundreds of other local entities for these funds, Sorensen said it helps if the City identifies projects that fall in line with whatever housing goals the state has. As of now, that goal is permanent supportive housing, in which long term leasing, rental assistance and/or supportive services are provided when at least one person in the household has a disability. 

“It’s good for us to align our strategy with the federal government. Right now it’s permanent supportive housing,” Sorensen said. “I don’t want to say it drives our decisions, but it helps focus a very limited amount of funds.”

Long Beach uses certain incentives to encourage developers to build more affordable housing such as waiving impact fees, allowing for more dense developments (smaller units and less space) and the aforementioned low interest rate loans from the LBCIC. 

According to Long Beach’s Affordable Rental Housing List of 2023, there are 27 apartments and developments with affordable units available to families. Most of these are no longer accepting applications, and some allow you to submit an application for their waiting list. 

For seniors, 32 apartments and housing developments fall under the affordable threshold and there are 16 developments that offer units deemed affordable for disabled residents or those with special needs. 

Sorensen said four affordable housing projects are slated for grand openings this year.