Long Beach is applying for a $2.5 million matching grant from the state for its newly reestablished Housing Trust Fund.
The City established its Housing Trust Fund program in 2005 with the goal of meeting housing needs in areas of extremely low to above-moderate income. The fund was created with $750,000 in grants and taxes and used on two projects: a mobile home repair grant program and a second mortgage assistance program.
Since then, the fund has been ineligible to receive grants from the California Department of Housing and Community Development’s Local Housing Trust Fund Program since it did not conform with state mandates. In October 2023, Long Beach updated those guidelines to regain eligibility, and this is the first application for funding since then.
The Housing Trust Fund can be used on construction loans, loans to rehabilitate affordable rental housing projects, establishing emergency shelters, creating supportive or transitional housing and granting loans for Accessory Dwelling Units (ADUs).
The guidelines for the Housing Trust Fund are as follows:
- At least 30% of the funds must be used on assisting extremely low-income households.
- No more than 20% of the funds can be used on moderate-income households.
- The remaining funds must be used on lower-income households.
The California Department of Housing provides matching grant funds to cities with eligible Housing Trust Funds, so if Long Beach is approved for the $2.5 million grant, there will be $5 million in the fund.
The money will then be given out through a competitive process conducted twice a year until funds are exhausted. Community Development Executive Director Christopher Koontz did not specify which of the possible uses the City will focus investments on at the Tuesday meeting.
The process will be overseen by the Long Beach Community Investment Company, whose members are appointed by Mayor Rex Richardson. Koontz is the president of this company.
Koontz said that they will likely take a “scattered” approach to distributing the funds, spreading them out to ADUs, affordable rental projects, homeowner assistance programs and more.
When Long Beach approves a contract with a private developer for the creation of an affordable rental project, the City typically ends up subsidizing around $100,000 per unit, Koontz said. The City slowly receives payments on these loans over 55 years, while the creation of the project can take from five to six years.
With an ADU, the City loans a homeowner $250,000 to create the affordable housing units and the loan is expected to be paid back over 10-15 years. These units are typically finished within one year.
Richardson has praised the existence of ADUs in Long Beach, claiming that they have approved more ADUs and smaller-sized junior ADUs than most California cities. NBC reported that Long Beach has approved 1,431 ADUs in the last five years.
The City did not give a timeframe of when they expect to get a response on their grant application.
