California affordable housing law to prevent foreclosures

A new California law, Assembly Bill 2020, is set to take effect next year to help prevent foreclosures in the affordable housing sector. Authored by Assemblymember Jesse Gabriel, the legislation allows the California Department of Housing and Community Development to permit owners to transfer funds generated by profitable affordable housing units to other properties within their portfolio to stave off foreclosure.

Supporters, including Enterprise Community Partners Inc., noted that many affordable housing developments operate on razor-thin margins due to rising insurance and maintenance costs. The law aims to protect taxpayer investments and ensure that critical housing units remain on the market by providing developers with the flexibility to stabilize struggling properties using existing resources. There was no reported opposition to the bill.