By Joe W. Bowers Jr. and

Edward Henderson

California Black Media

The California Housing Finance Agency’s Accessory Dwelling Unit (ADU) Grant Program may receive only $25 million in new funding instead of the $50 million investment lawmakers initially proposed after negotiations with Gov. Newsom.

The state had previously allocated $100 million to increase the housing inventory and address the homelessness crisis, but these funds were depleted months ago.

Since its inception, the program has provided up to $40,000 toward pre-development and non-recurring closing costs associated with the construction of the ADUs, an innovative, affordable, and effective living option for low-to-middle-income residents.

The predevelopment costs the grants cover include site prep, architectural designs, permits, soil tests, impact, fees property survey and energy reports.

One of the hurdles for ADU construction has been the reluctance of California lenders and major banks to offer ADU loans. Although CALHFA provides a $40,000 grant to qualified homeowners, the overall cost of an ADU can range from $300,000 to more than $400,000.

Funding for the program is in flux because of a disagreement between CalHFA and lawmakers over how to use it.

Lawmakers and Newsom signed a budget bill that would restore the $50 million funding in July only to see another budget bill in August take the money back. Now an amendment will put half of the money back to restart the program this month.

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By McKenzie Jackson
California Black Media

Joseph Thomas was surprised to receive a notice from his homeowner’s association (HOA) this spring letting him know that there would be an increase in insurance premiums for him and other condominium owners at The Met in Los Angeles’ San Fernando Valley.

The letter stated the increase was due to instability in California’s property insurance market. This left Thomas feeling perplexed.

“They said the premium was going up because it was hard to get insurance in California now, and a lot of companies are leaving,” he recalled. “I started Googling because I didn’t believe it. I thought they were robbing us of our money, but I Googled it. It is a thing.”

The withdrawal of large insurance carriers like Allstate and State Farm from California’s insurance market will have a significant impact on claims, at least one claims services provider has told insurance businesses, said Maurice Arnold of Robert Arnold and Company in Oakland.

Remaining carriers must shoulder huge catastrophic risks in the state, which often sees enormous claims from wildfire damage. We can expect insurance carriers to respond by tightening their underwriting and raising premiums. When lots of companies pull out of the market, it puts pressure on exiting companies to try to offset risk with tighter underwriting and increase premiums, Arnold said.

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Giant insurance companies are refusing to offer or renew coverage for homes and residential complexes across the state due to the looming threat of wildfires, natural disasters, inflation, and other factors and, as they claim, their ability to get adequate rates to pay for these increased costs.

Since 2020, the state has experienced eight disaster events resulting in overall claims ranging from $20 billion to $50 billion. This has caused an increase in pressure from insurance companies to tighten California’s consumer-friendly policies that have held down rates for years.

California Rental Housing Association (CalRHA) Executive Director Russell Lowery said insurance premium costs have jumped up millions of dollars for property owners in his group.

“With insurers leaving the market that means our members don’t get as competitive of a quote,” he noted.

Lowery said rising insurance prices hit renters’ pockets also.

“Extraordinary increases,” he noted. “The pressure on property owners to pay that cost in the form of higher rent is very real.”

California Insurance Commissioner Ricardo Lara has taken steps to make insurance more affordable for Californians. The steps include expanding FAIR Plan coverage options and requiring insurance companies to acknowledge and reward wildfire safety and mitigation efforts made by property owners. The commissioner is also in ongoing discussions with insurers to address their rate increase requests.

[Courtesy City of Oakland Public Information Office]

The City of Oakland has received a Regional Early Action Planning (REAP) 2.0 grant of $10 million to support housing, infrastructure, streetscape, and transit access for Mandela Station in West Oakland. This grant will support the construction of affordable housing adjacent to the West Oakland BART station and improve mobility for new and existing West Oakland residents.   “We are committed to creating housing families can afford,” said Oakland Mayor Sheng Thao. “This grant will help us make significant progress in bringing 240 units of affordable housing to West Oakland and I appreciate the hard work of our City team in securing this funding. I’m proud that our recently passed budget also includes a historic investment of over $200 million in affordable housing which we can leverage for future grants as well. Oakland agrees — we need affordable housing now and we’re going to work hard to make that happen.”   Award components include:   – $4.0 million for the Bay Area’s largest planned 100% affordable housing project (240 units) that will focus on the pre-development efforts necessary to complete the construction document planning and building permitting process. This will accelerate the project team’s ability to complete the remaining financing efforts and begin construction. Trending Tale of Two Underground Railroad Communities   – $4.0 million in Transit Oriented Development (TOD) infrastructure (sewer main extension) that is required to begin the 100% affordable project as well as an additional 2,705 units of very high-density infill housing (178 additional affordable units), 300,000 square feet of commercial space, and 111,661 square feet of retail space, all adjacent to a BART Station in the heart of the transit system.   – $1.55 million for the City’s Seventh Street Corridor project. This includes connecting the existing and new TOD community with direct access to a high-quality protected bicycle connection between the West Oakland BART Station with the jobs and amenities available in Downtown Oakland.   Furthermore, this project improves pedestrian connection across and along Seventh Street for people walking to their destination or to a transit stop on Seventh Street. Finally, this project will provide transit improvements, including bus boarding islands, upgraded bus shelters, and queue jump lanes.   – $450,000 for equitable transit access by providing funding for prepaid debit cards through Oakland’s Universal Mobility Program for a priority population in the project area.   This program allows recipients to pay for any transit service or shared mobility option, such as bikeshare and e-scooter. By removing financial barriers to transit options, the Universal Mobility Program will provide a positive impact on system-wide ridership across the various transit, micro-mobility, and rail operation services.   This will also serve as a valuable pilot to study ways to boost transit usage.   Together, these investments represent a critical investment in the future of West Oakland as part of a broader strategy to reverse historic disinvestment.   The REAP grant award follows the City’s successful application in early 2023 to secure $2.39 million from the state’s Pro-housing Incentive Pilot Program Grant. This $2.39 million has been committed to support new permanent affordable housing production and leverage additional State resources in summer 2023 funding opportunities. Oakland qualified for this Pro-housing grant when it became the first state designated Pro-housing city in the Bay Area in December 2022.