The city of Long Beach has green-lit a new program it hopes will hit two birds with one stone by increasing housing in the city and helping low-income residents find a home to rent.
The city is using $2.5 million dollars to fund the Affordable ADU Loan Program by offering zero and low-interest loans up to $250,000 each to homeowners wishing to build an ADU (additional dwelling unit). However, the catch is that they must rent the ADU for 5 years to a low-income family.
“It’s a good resource for low-income families and for all families,” said Yamilet Chavez, a new homeowner in Long Beach’s Wrigley neighborhood. “If I rent (an ADU), it will help us pay our high mortgage.”
The program is open now to homeowners and closes in November. If approved, the loan payments will not be required during the construction term and there is no interest as long as those units are rented to low-income residents for at least 5 years.
The city will give priority to owners who agree to rent to someone with a Long Beach housing voucher, which guarantees payment with federal funds that subsidize low-income households.
Rents, depending on the zip code, could range in Long Beach from $2,200 for a studio to $3,200 for a two-bedroom. With loan payments around $800 a month, homeowners land on the upside of the deal.
“It benefits a lot of families,” said Chavez.
The program could help Long Beach reach its goal of building 26,000 housing units by 2028, as mandated by the state.
The city already has reduced the red tape to build ADUs by offering pre-approve building designs that reduce permit and construction times.
The application process is open now with the first loans expected early next year.