From today’s Examiner, “A new set of rules governing federal funding for low-income housing could put Mayor Gavin Newsom’s bold homebuilding goals in jeopardy.”

“At least 300 of the 15,000 units that are earmarked for very-low-income people — someone making less than $23,000 a year — may have trouble getting financed. About half of the possible 300 units were already in the planning stages when the federal Department of Housing and Urban Development announced in October that it would be changing some of its funding criteria.”

“Under the new set of rules, federally subsidized rents will not be able to exceed state-subsidized rents if both kinds of units are included in the same development. Currently, HUD subsidies are more than state subsidies — usually by about $200 a month — so the HUD units are geared toward very-low-income people.”

“Many of the affordable housing developments sponsored by The City involved this “mixed financing,” Housing Authority director Greg Fortner said. For example, at the 280-unit Valencia Gardens, the federal government would normally pay $2,000 a month for a three-bedroom; the state will only pay $1,400. The extra $600 a month would add up to $72,000 a year in lost revenue on just one unit — or $775,000 on the 10 federally subsidized units planned there.”

Fortunately, it doesn’t look like too many of the 15,000 units that are planned will be affected, but it always hurts when projects lose funding that would have otherwise allowed them to happen.

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