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October 18, 2013: California HCD to Continue Subsidies for Residents of RD/RHS Housing

The California Department of Housing and Community Development (HCD) announced last week that it will issue tenant-based vouchers to over 500 households living in 29 California Rural Housing Service (RHS) Section 515 rental housing developments whose nearly 30-year HCD project–based subsidies will terminate at the end of this year. The HCD project-based subsidies were granted to the developments under long-term contracts funded by the California legislature when they were first constructed to enable them to serve low- and extremely low-income households. The funds for these contracts have been exhausted and were not extended due to California’s recent budget crisis. As a result, HCD advised the developments’ owners that the subsidies would terminate as of December 31, 2013. The National Housing Law Project, the California Housing Partnership Corporation, and the California Rural Housing Coalition lobbied HCD to continue to support the residents of the affected developments to avoid tenant displacement and possible owner defaults on the developments’ RHS loans. After nearly six months of consideration, HCD finally announced last week that it would use HUD HOME funds to create a tenant-based voucher program to assist affected households for a two-year term. This should allow HCD, the residents, as well as the owners to come up with long-term solutions. The California Housing Partnership Corporation has published a detailed article on these developments at http://www.chpc.net/dnld/HPN_OCt2013_RHCPRRA.pdf.

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