The purpose of this memorandum is to recommend the City Council direct the City Manager to create the Sacramento Affordable Housing Trust Fund from the proceeds of the Measure U Catalytic Housing Bond(s), future State of California affordable housing allocations, and contributions from public, private and nonprofit partners. The bond proceeds and equity funds will be used to accelerate the construction of permanent new or adaptive reuse rental and purchase affordable housing in the City of Sacramento, create a new market for efficiency housing, contribute to the City’s long-term strategy for inclusive economic development, create new construction jobs, and fulfill the vision for housing as a right for every resident of Sacramento.

Housing is both a challenge and an opportunity in Sacramento. In this “year of breakthroughs” for our great City, we recognize that in order to continue our renaissance, we must permit and build affordable rental and purchase housing at an accelerated rate. Demand for new housing and housing insecurity has increased tremendously among our residents and especially among our low-income population. We see new job growth but a higher percentage of income from stagnant wages going to housing, resulting in difficult budget choices between food, health care and other expenses that ensure a high quality of life. And, while we welcome new residents from other high cost housing areas, the demand for housing with limited new housing options has made Sacramento housing less affordable.

This proposal is to create a Sacramento Affordable Housing Trust Fund, administered by the City of Sacramento, with bond proceeds from the Catalytic Housing Bond and equity from other resources to provide loans and grants to build more affordable housing and keep people on the verge of homelessness in their homes. The proposal also includes the creation of a new market for efficiency homes with an allocation for the construction of low cost, streamlined, smaller units and a cap on the gap financing provided for each unit.