After decades in affordable housing and community development, Tiena Johnson Hall was appointed as California Housing Finance Agency’s executive director by Governor Gavin Newsom this summer.
Having served on the agency’s board of directors since 2014, Johnson Hall has come to power at a moment when the state is facing increasing challenges in housing, an affordability crisis and rampant homelessness.
Below is a discussion with Johnson Hall. Her responses are excerpted and edited for length and clarity.
What are the biggest issues you’ll be looking to tackle as the CalHFA’s executive director?
Very key issues include our down payment assistance program, the Black homeownership initiative, the ADU [accessory dwelling unit] program, and the multifamily mixed-income program. We are truly designing these to successfully address affordability and inequality. I have a couple of things that I would really like to see us handle. There's white space in the affordable housing industry and I define that as places where we know we can get better, but we haven't figured out how to actually do it.
One of those would be to help emerging affordable housing developers break into the industry and elevate them to a capacity where they can do more and build a long-term business. The affordable housing industry by nature aims to be progressive, but the fact of the matter is that I believe it can also be quite complacent. If it ain’t broke, don't fix it ... but it might be a little broken, more broken than we suspect.
How do you plan on fixing it?
Even with a tax credit in hand, a new developer isn't going to get the pricing that a more established developer would get. Those new and emerging developers can only do one project at a time, it often takes years to complete those projects, which means that they can't build up the level of capital needed to get better pricing — unless they happen to have a ton of capital and that's more the exception than the norm. Effectively, this means we are leaving out a lot of people of color and developers that actually come from the community where they are building. That's not good enough for me and we need to look at this differently.
Bonds and tax credits are the backbones of affordable housing rental development in California. I sit on the Debt Limit Allocation Committee in an advisory role and I'm also a voting member of the Tax Credit Allocation Committee. We have been working to update regulations and setting aside bond reservations for BIPOC developers was one of the important pieces that was added just last year.
I also think that as a state, we need to find a way to get resources out quicker. We need a more efficient approval process. CalHFA’s mixed-income program takes under a year to get money out from application to ground-breaking and that translates to reducing the development costs for affordable housing. I'd like to continue to streamline the access to state resources and really start building the units that California needs as quickly as possible.
California has some of the country’s most expensive housing markets. The California Association of Realtors projected the median home price in the state to hit $834,000 in 2022. What can be done to keep residents from being priced out and combat the lack of affordability?
Unfortunately, some of this really boils down to a lack of supply. There is simply not enough housing for people to rent or homes for people to buy. And we know the people who have housing are doing just fine. It's the people at the margins that are being pushed down farther.
This is systemic, it's a societal problem far beyond what I or CalHFA can address. We try to focus on those at the margin when we look at the developments we finance. We have two paths we try to follow: For the projects restricting units at lower income levels, our desire is for those developments to go in higher resource areas. Then for those projects that are being built in lower resource areas, we're looking to finance developments with a mix of income restrictions from lower-to-moderate income. That's the roadmap we’re taking to help solve this issue.
The racial divide in homeownership has stayed nearly constant since the Fair Housing Act was passed in 1968. What types of lending products do you think are needed to help bridge the gap?
The consequence of historical housing discrimination, coupled with exclusionary housing policies, means families of color simply don't have much of a chance to build wealth or help the next generation with down payments.
CalHFA has been successful with our down payment assistance program. We also provide closing cost assistance for low- and moderate-income Californians. These effectively have helped first-time home buyers with more than $600 million in assistance over the past three years, giving them access to over $10 billion in mortgages. In 2020 alone, CalHFA helped more than 9,000 Californians achieve homeownership, with 68% of those being families of color.
We also recently released our accessory dwelling unit financing product, which is a grant for up to $25,000 to cover pre-development costs. And it is a grant — not a lien on their property like some of the other programs that have been developed. We're targeting lower-income homeowners and low equity homeowners, with the goal of ultimately increasing their equity and providing them with another source of income. It will also help increase the rental housing stock that our state is sorely lacking. It's a triple threat.
We started this program with $19 million, then Governor Newsom gave an additional $81 million through his California Comeback state budget. We now have a total of $100 million available for these grants and I'm challenging my team to get this money out as quickly as possible.
California had the most foreclosure starts in 2021’s third quarter, according to Attom Data Solutions. What is CalHFA doing or going to do to keep borrowers from losing their homes?
Like all of the other agencies, the mandate is to do whatever we can to keep people from losing their homes. We have counseling services out there available to help folks who are losing their homes, we are also working on a mortgage program that is not quite ready for release. But I don't mind sharing that California has submitted it to the U.S. Treasury for review and approval.
The bottom line is that we will be providing financing to help bridge payments for homeowners who may be challenged by the pandemic and other issues to continue to pay their mortgages. In order for us to launch it, we need to get final approval from some of the different departments before we can release it. But I suspect that we will be able to get this done sooner rather than later because it is very high mandated the governor.
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