April 11, 2017
City and County Credit Support for Affordable Housing
Cities and counties face a well-recognized challenge from the growing mismatch between the demand and supply of available housing and the consequent pressure on housing affordability. In a number of jurisdictions, rising costs are putting housing out of reach of a growing segment of the population.
While cities and counties are authorized to invest public funds in affordable housing, those funds are scarce and housing competes with a host of other important priorities. As an additional or alternative means to encourage the development or preservation of affordable housing, cities and counties could consider pledging their credit to support these projects where the affordable housing benefit is significant and the potential financial risk to the city or county can be properly evaluated and minimized. While this pledge of credit would be a debt of the city or county for purposes of calculating debt limitations, if done carefully it can have significant impact on housing availability without the expenditure of public funds. For a full discussion of this option, see the attached article.