(The Center Square) – California announced the recipients of $545 million in homebuilding subsidies, averaging $216,000 in state cash for each of the 2,524 new homes. These subsidies do not cover the entire cost of construction, and include an average of an additional $97,000 in nearby program or transportation funding bundled with the homes.
“California is helping local communities build more affordable housing while addressing the homelessness crisis,” said California Gov. Gavin Newsom in a statement on X.
Of the 2,524 homes, only 41 are market-rate housing; the rest are deed-restricted as price-controlled “affordable” housing and often come with a wide range of other conditions, such as being formerly homeless or having a positive HIV diagnosis.
In one San Francisco project that secured $41 million for an 85 unit building with 84 “affordable” units, 22 homes are set aside for formerly homeless households, while five are set aside for HIV positive households.
The project receiving the most in subsidies per home was El Cerrito Plaza, a 70-home project with $25 million in housing funding and additional $14 in transportation-related funding for nearby Bay Area Rapid Transit rail infrastructure. This adds up to $351,408 per home in construction subsidies, and another $207,750 per home in additional infrastructure and program funding.
The project receiving the least per-home funding was Arrowhead Grove, a 92-home project in San Bernardino that includes “covered parking with solar panels and electric vehicle charging stations, a xeriscape landscape, permeable materials, bioswale, an enhanced tree canopy, community gardens, and a village green.” Each home received $94,946 in state homebuilding subsidies, and another $77,307 in infrastructure and program funding.
Home permitting collapsed 45% between 2022 and 2023 in California, reflecting a far lower number of home building applications submitted. Even though housing is in high demand — the state has an estimated 4.5 million home shortage — very few developers are submitting plans for market rate housing; in Los Angeles, only 27% of homes submitted for building applications in the last fiscal year were market rate.
Peer-reviewed data generally suggests “affordable” housing reduce costs for those who are able to get in, while increasing the time to build and cost of housing for everyone else.
