The Abridged version:
- Three properties for low-income renters in Davis are set to receive roughly $15 million for long-awaited repairs.
- Twin Pines Apartments, Tremont Green and Moore Village, all owned by Mutual Housing, will split the money between them for rehabilitation improvements.
- The money will come from tax-exempt bonds issued by a joint powers authority called the California Public Finance Authority. The city of Davis is not responsible for the money, but will need to join CalPFA.
Three affordable housing properties in Davis are set to receive millions of dollars for repairs thanks to an obscure public funding source.
The Davis City Council on Tuesday voted to join the California Public Finance Authority, allowing the authority to issue bonds and loan up to $15 million to Mutual Housing.
Mutual Housing, which owns Moore Village, Tremont Green and Twin Pines Apartments in Davis, will then split that money between the three buildings for repairs that “ensure their long-term viability and affordability,” said Parker Evans, acquisitions manager for Mutual Housing.
“We’re reinvesting in these communities more than 20 years after we built them,” Evans said. “All without requesting any city money.”
As part of the deal, the city of Davis will join the California Public Finance Authority, or CalPFA, which includes more than 50 other local agencies and a board of directors made up of Kings County supervisors.
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Repairs needed
All three properties are at least two decades old, and each needs upgrades to crucial systems like HVAC or plumbing. By the end of construction, residents will have new paint, flooring, insulation, countertops and roofing, Evans said.
To make those repairs, Mutual Housing needs access to cash, which will be provided through bond financing.
In this case, that means CalPFA will release tax-exempt bonds that third party investors are incentivized to buy for the tax credit. The revenue from those sales will then be provided to Mutual Housing in the form of a loan to be paid back.
Davis will not back the loan or provide any direct financing.
“There is no financial obligation on the city’s part,” assistant city manager Kelly Stachowicz said.
A joint powers authority
The joint powers authority that Davis will become a member of as part of this deal began roughly 200 miles south in 2015.
The public finance authority was created by Kings County and its housing authority to provide a way to raise cash for public and private projects. On its website, the authority highlights its ability to access bond markets and expertise in guiding municipalities or companies through the government approval process.
It is a subdivision of the state but operates independently and is governed by five members of the Kings County Board of Supervisors.
To help the supervisors make their decisions, a consulting group called GPM Municipal Advisors in Walnut Creek is contracted to staff deals and provide guidance. The consulting contract was recently renewed by CalPFA for another five years.
With the consulting group’s help, CalPFA has made hundreds of millions of dollars worth of bond deals in the last few months alone.
At its Sept. 1 meeting, the board approved $187 million of revenue bonds for St. Anton Communities in unincorporated Placer, Rocklin and Roseville. They also approved $400 million of bonds for Sharp HealthCare in San Diego County.
