$2.7 Billion in Bonds Wasted by a California Firm Meant to Support Affordable Housing Expenses

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This week, a California agency got caught wasting approximately $2.7 billion in bonds to support affordable housing funds within the state. According to the nation auditor’s office’s hottest official report, the developers could have utilized the money to aid in building and offering affordable homes for Californian residents. Several years ago, the amount of the bond capacity got approved to supposedly address the country’s rising housing crisis cases beginning from 2015 to 2017.

According to the auditors who handled the funding investigations, they discovered that the California Debt Allocation Committee mismanaged its use of the budget, causing the bonds to expire. The previously mentioned board is under the care of the nation’s Treasurer’s Office. CDLAC’s primary duty is to assist private inaugurators in constructing inexpensive housing and other infrastructure proposals to support public benefit by issuing tax-exempt federal bonds control.

Moreover, State Auditor Elaine Howle stated that California lacks concrete plans on how to utilize the remaining budget for housing projects. Due to the previously mentioned reason, the bond allocations got botched. Howle also wrote in her account that the state’s unclear ploy to address the country’s housing concerns had caused the waste of the  $2.7 billion in bonds reserve. Additionally, the problem started when the debt agency focused its attention on giving financial support to California’s pollution control projects. As a result, the bonds were never used and got expired instead.

Auditors also stressed that the agency should have concentrated on more pressing issues faced by the state and allotted finances on them, and the housing crisis is one of them. 

The drawback got discovered by former San Francisco and Assemblymember State Treasurer Fiona Ma. According to Ma, her 2019 term led her to find the complication behind the funding. She recalled that during the problem’s ongoing existence, the agency’s senior staffers were no longer around to investigate and resolve it. Moreover, Ma revealed that her administration at the time consisted of new members.  She also stated that no one successfully tracked the utilization and allocation of the bond money.

Now that the issue is out for the public eye to become aware of, Ma pointed out that the debt firm now frequently post their updates with agency transactions they have involving state projects and concerns. Additionally, she declared that her office would oversee the company’s actions in hopes of preventing a similar event that happened a few years in the past. Ma stated that she and her administration are present to inspect and resolve the problem.

From 2015 to 2017, the bonds’ three-year allocations ceased. As a result, a 2017-2019 statistical report discovered that the city’s homeless population experienced an increase of 17%. Furthermore, San Francisco and neighboring municipalities disclosed a surge in the state’s housing fees within 2017 and 2019.

Many expressed their frustration after the release of the auditing report to the mass media. According to Tenderloin’s Housing Clinic director Randy Shaw, he affirmed that the clinic received more than 1,041 applications for two inexpensive housing apartments within only two days this week. Shaw stated that the number of applications is staggering, and he also admitted his disappointment with the loss of the $2.7 billion bonds meant to aid the housing crisis across California.

According to the official report, none of California’s four housing agencies handled the money bonds properly due to their absence of reasonable plans to help address the state’s soaring housing issues. Moreover, the previously mentioned concern is only one of the many problems encountered by auditors surrounding the approval and funding of cost-efficient accommodations.

California’s housing failures don’t only account for the involved housing firms regarding the bonds’ mismanagement. Auditors who examined the issue also revealed that multiple local governments are responsible for the funding expiry due to their many constraints on new construction and development.