Dreams for All is demand side. The buyer gets a loan. This program is supply-side; the builder gets tax credits to build something at a price that wouldn't otherwise be feasible. Which equity are you sharing here?
Maybe it’s a combination: tax credits for the builder and the state shares in equity for the homes with a loan program to purchase the homes built with those tax credits. Maybe the equity sharing can help subsidize the tax credit program long term.
It doesn’t make sense to subsidize demand or deed restrict them because the state would just be throwing money away, but if this program created new homes that were at least temporarily affordable for moderate income, and shared equity when they were sold at market rate, that seems fine to me.
If the state shared in equity for the property, then the deed restrictions would limit the potential return on that equity sharing. It just means the tax credit program would probably result in less overall production since it would be more expensive to run without those returns.
Why would the tax credit result in less overall production if the units were deed restricted? We'd be paying developers with tax credits to produce Moderate Income housing. They get the same money, and thus have the same incentive, whether the unit is deed restricted or not. +
The absurd program would be where, for some reason, the govt limited the first resale price (and its own potential return as an equity holder) but there was no deed restriction: the 2nd owner would benefit more than the first. It’s just a dumb thought I had that’s “consistent” with CalHFA programs
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