Manatt Counsel Discusses Threat to Low-Income Housing Projects
“Opinion Could Further Hurt Affordable Housing”
June 25, 2012 – Manatt’s Roger A. Grable, a counsel in the firm’s Real Estate & Land Use Practice, spoke to the Daily Journal about a recently published opinion that could threaten the expansion of California’s low-income developments.
The Daily Journal reports that the 4th District Court of Appeal upheld a trial decision that deems a Redlands affordable senior complex a “public work,” thus requiring the developer to pay workers prevailing wages, which are typically 20 percent to 30 percent higher than those paid on private jobs.
The state’s affordable housing projects lost a crucial funding source earlier in the year when California’s redevelopment agencies folded. Industry experts think the recent opinion could force developers of low-income projects to pay millions of extra dollars in wages, making it harder to finance such developments.
Grable said that affordable housing projects typically depend on several government and private funding sources. Until Gov. Jerry Brown’s February abolition of redevelopment agencies to try to close a state budget gap, he said the agencies were required to devote 20 percent of their local tax dollars to affordable housing.
Between that funding drying up for future low-cost housing, and the 4th District’s decision, Grable said it will become “harder and harder to do these projects.”