A public bank will enable Los Angeles to pursue more socially beneficial and economically just forms of development by identifying, underwriting, and originating low-cost, high-impact credit.
In the midst of an affordable housing crisis, a Los Angeles public bank will support the development of affordable housing, both through construction loans and long-term bond and mortgage loans. These loans will be offered in partnership with local community banks, credit unions, and community development financial institutions (CDFIs). Over time, public banks could become significant suppliers of long-term affordable housing credit.
- A public bank will provide flexible terms and term extensions on lines of credit to affordable housing developers, allowing them to acquire existing properties and place them into permanently affordable cooperative housing arrangements and community land trusts.
- A public bank will support working-class neighborhoods by creating loan instruments to finance rental assistance programs that assist those who are not eligible for Section 8 vouchers or other current assistance programs. They can also ensure that future housing development linked to publicly funded transit investments supports people of color in staying in and improving their neighborhoods.
- In times of crisis, public banks can provide capital to localities immediately and fund tax-credit-based rental assistance programs to prevent evictions and foreclosures. This will help reduce the costs associated with homelessness, which are often paid for by governments, and ultimately subsidize loan repayment.
- Public banks will offer long-term multi-unit mortgage financing, allowing local governments and nonprofits to acquire thousands of units of existing housing and remove them permanently from the for-profit segment of the local housing market.