Housing Financing - California Climate and Energy Collaborative

Barrier 3: Housing Financing

Barrier Statement

Affordable housing developments require complex financing involving multiple funding sources, many of which are highly competitive and include excessive and inconsistent requirements, and extend development timelines.

Filterable Database

How communities are experiencing this barrier

View the details on what communities have shared with SLECC from across the state.

Key challenge discussed in - San Francisco Bay Area, Los Angeles, Inland Deserts

Affordable housing projects face a fragmented financing landscape requiring developers to stack or braid multiple funding sources—tax credits, subsidies, grants—each with its own priorities, timelines, and compliance requirements. This patchwork system creates excessive administrative burdens and delays, making it difficult for local organizations and developers to efficiently access funding or move projects forward.

Key challenge discussed in - San Francisco Bay Area, Los Angeles

State housing and climate funding programs remain both overly complex and highly competitive. Difficult, time-intensive applications—paired with limited funding pools—discourage participation from smaller jurisdictions and mission-driven developers. Even strong, shovel-ready projects often fail simply because programs are oversubscribed, creating significant barriers to accessing resources.

Key challenge discussed in - San Francisco Bay Area, Inland Deserts

Establish local and regional pooled housing trust funds and collaborative financing vehicles—leveraging public, private, and CDFI capital—to provide flexible, low-cost, patient loan products that allow affordable housing projects to move forward despite state and federal funding delays.

Key challenge discussed in - Los Angeles

Market infeasibility: In some sub-regions, multifamily housing is financially infeasible, making it difficult to deliver affordability at scale. By contrast, townhomes or condos (“missing middle” housing) often “pencil out” and align better with consumer demand

Key challenge discussed in - Los Angeles

Heavy compliance burdens: Grants and tax credits require extensive reporting and “box checking.” Example: “Buy American” requirements can complicate material procurement, while each funder adds new conditions

Local Solution Opportunities

SLECC stakeholders have brainstormed the following solution opportunities that can be taken by local leaders. Existing examples of progress or pathways to make further progress are highlighted if known.

Local Solution

Establish regional coordination mechanisms to collaboratively build pipelines of investable housing projects. By pre-identifying priority developments, pooling resources, and aligning multi-jurisdiction applications before approaching state and federal funders, regional entities can reduce duplicated effort, avoid competing against one another, and strengthen competitiveness for scarce dollars.

Existing Examples of Progress:

Further Progress Pathways

Region(s): San Francisco Bay Area, Los Angeles, Inland Deserts

Local Solution

Standardize and pre-approve housing components by creating pre-qualified designs, turnkey/pipeline-ready housing packages, and pre-packaged compliance checklists. These measures reduce design review, procurement delays, and funder-by-funder ‘box-checking,’ allowing affordable housing developers to deploy projects faster and at lower cost.

Existing Examples of Progress:

Further Progress Pathways

Region(s): San Francisco Bay Area, Los Angeles

Local Solution

Local feasibility targeting: steer rezonings and incentives toward formats that “pencil” locally to expand ownership options and throughput.

Existing Examples of Progress:

LA-area subregions/cities: Regional analyses showed multifamily high-rises often “don’t pencil” in subregions outside of central LA. In contrast, townhomes/condos often prove financially viable, while also meeting household demand for ownership. Highlighted as politically easier for elected officials to support than multifamily rentals, and a way to diversify supply.

Further Progress Pathways

Region(s): Los Angeles

State Solution Opportunities

SLECC stakeholders have brainstormed the following solution opportunities that can be taken by state leaders. Existing examples of progress or pathways to make further progress are highlighted if known.

State Solution

Publish pre-vetted procurement/spec packages (e.g., Buy-American, materials, reporting) to cut delay across common funding sources.

Existing Examples of Progress:

Further Progress Pathways

Region(s): Los Angeles

State Solution

Incentivize ownership formats (condos/townhomes) where multifamily doesn’t pencil; align incentives to local feasibility to expand supply & ownership.

Existing Examples of Progress:

Further Progress Pathways

Region(s): Los Angeles

State Solution

Continue/expand state-backed local housing trust programs and consider state compensation for infill developers meeting priority outcomes.

Existing Examples of Progress:

Further Progress Pathways

Region(s): Los Angeles

Solution Spotlight

No results found.

Help us strengthen our knowledge base!

Help us to expand our database. Either share new ideas, best practices or general feedback via this form, or click on a particular item to share additional feedback, information, examples of progress on that particular item.

Feedback Form

Additional Resources

Please share any additional resources you would like to include by emailing eecoordinator@civicwell.org.