“The City of Richmond doesn’t have a lot of revenue, and building housing is incredibly expensive. So how can Richmond afford to expand and preserve affordable housing?”

“Isn’t housing a regional issue? How can we address it in a way so Richmond isn’t just on its own?”

“What can cities do to attract private money to support affordable housing?”

A housing bond generates funds that cities or counties can loan to nonprofit and for-profit real estate developers, who in turn use the money to preserve or create affordable housing. Housing bonds are important because they provide needed additional resources for affordable housing developers and multi-family project owners, who can then serve residents on limited incomes who would otherwise be unable to afford other housing options. Housing bonds can be implemented at the city or county level, but because they affect governmental finances, they must be approved by voters as a ballot measure.

Understanding the Policy

Municipalities and counties are permitted to issue bonds when they determine that major investments are needed for infrastructure or other expensive projects, and that these investments cannot be funded through their normal tax revenues. Governmental entities can attract outside investors to fund these major expenses and pay them back slowly over time, generating usable funds for housing projects that might otherwise be financially inviable. Affordable housing developers, who usually identify and complete these projects, are constrained in how many units they can produce by the high cost of housing construction. Housing bonds therefore help to close the gap between the high cost of producing units and the limited capital available to affordable housing developers who serve residents of limited means.

Housing bonds can be tailored to meet the specific housing needs identified by a city or county, meaning that they are more flexible than federal funding programs (which are generally earmarked for specific populations, regardless of need). Government officials, staffers, and members of the public can jointly outline policies and preferences as to who should be the beneficiaries of housing created with bond financing.

Disadvantages of a housing bond include that they cannot be used to fund housing services. Tenant legal clinics were identified during the Richmond Housing Symposium as a needed service for residents at risk of displacement. However, aside from small administrative fees that are made available for city staffing, the bond proceeds must go to capital improvements, such as the acquisition of land or existing buildings, construction of new housing developments, or rehabilitation of housing projects. An additional concern in Richmond is the state of its public housing projects. Bond funding can be used to rehabilitate public housing, and San Francisco serves as a local precedent for linking a housing bond to major renovations of public housing. The bond funding complemented private capital that was made available through a federal program called the “Rental Assistance Demonstration” (RAD) program, in which Richmond also participates. As of November 2017, pending federal tax reform is complicating the effort to rehabilitate Richmond’s public housing under RAD; allocating bond funding towards public housing could thus be an important solution.

Designing the Policy

To pass a bond measure, advocates must gather a sufficient number of signatures to file paperwork that places the measure on a ballot, generally a year or more in advance of an election. Advocates must also campaign in the months preceding the vote to educate voters and increase the likelihood of the bond measure’s passage. According to one Bay Area housing bond expert, lobbying county supervisors or other elected officials is an important means of garnering widespread support for a bond measure, as voters tend to trust that electeds are knowledgeable about the issue and are able to make educated decisions regarding public finances. Simultaneously, city or county staffers draw up a bond ordinance, which determines the details of how the proceeds of the bond would be spent. City leaders can support passage of the bond by passing a resolution supporting it and speaking out about the benefits of passing the bond. 
If voters pass a county bond measure, county staff will create an implementation plan (guided by the bond ordinance), and real estate developers will apply to receive bond funding for their pending housing projects. Developers receiving these funds then create housing units with oversight from the city or county that administers the bond. 

Because housing bonds are customizable with regard to the specific purposes they can serve, advocates should plan to be engaged with city or county staffers before the vote to draft bond ordinance language that specifies the populations to be served. Note that other recent bond ordinances in the region have required that the bond implementation process include public meetings and comment periods so that stakeholders can address fine-grain details on exactly how the money will be spent, giving an opportunity for advocates to remain engaged after the vote has occurred.

In the last few years, several Bay Area cities and counties have adopted housing bond measures, including Alameda County, San Francisco County, San Mateo, and the City of Oakland, most of which earmarked funding to specific at-risk and vulnerable groups. In Alameda County, for example, the housing bond ordinance specified that rental housing projects would receive priority for funding if they served the homeless, seniors, veterans, people with disabilities, re-entry individuals, transition-aged youth who were aging out of foster care, and the lower-income workforce. Alameda County also determined that almost half of all the bond funds would be allocated to cities based on the size of their low-income populations and the number of housing units that each city is required to build under state law, which could serve as a template for a Contra Costa County housing bond and which would ensure that a considerable percentage of the bond funding would go specifically to Richmond. In comparing Contra Costa County to the other areas that have recently passed bond measures, however, it is important to note that these areas have historically been more supportive of funding measures than Contra Costa County, which is more conservative. Because of its relatively progressive politics, a bond measure would likely pass by a larger margin in Richmond than in Contra Costa County as a whole, but the amount of funding that the city could generate from a bond measure would be substantially lower than what the county could generate.


More information on the recent bond measures:

Organizations that have recently been involved with campaigns for Bay Area bond measures include:

  • Community Housing Partnership

  • Council of Community Housing Organizations

  • East Bay Housing Organizations (EBHO)

  • Ensuring Opportunity Campaign at the Richmond Community Foundation

  • Enterprise Community Partners

  • Housing Leadership Council of San Mateo County

  • Non-Profit Housing Association of Northern California

  • SV@Home