Is California’s Middle-Class Housing Plan Worth It?

Local government agencies in California are purchasing luxury buildings and renting them out at lower rates to middle-income workers. These programs benefited from the low interest rates and property acquisition opportunities that arose in the pandemic. The agencies use local property tax subsidies to fund the programs and expect to recoup the lost property tax revenue in the future. Although these programs have created more than 6,000 units, critics of this model question if the units are affordable enough and if middle-income residents will continue to be served. “It’s definitely creative,” said Jacky Morales-Ferrand, director of San Jose’s housing department, “But we want to make sure there is significant public benefit when we forgo property tax.”