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CA Covid Recovery

  • Economic and community recovery from the devastating impacts of the COVID-19 pandemic on local employment, small businesses, and disadvantaged communities depends on massive public investment as soon as possible to restart local economies.

  • Locally-established Enhanced Infrastructure Finance Districts (EIFD’s) were authorized by State legislation in 2014 to make up for the loss of former Redevelopment Agency “tax increment” bond financing for civic infrastructure projects and affordable housing development. Tax-exempt 30-year EIFD bonds can be sold up-front and then paid off gradually from future increases in annual local property tax revenues. EIFD districts can be authorized by city legislation, and then bond issues can be issued.

  • Local cities have few alternatives to raise significant funding on their own. 

  • Enhanced Infrastructure Finance Districts can solve this civic investment crisis – when it is needed the very most. Tax-exempt bond interest rates are rock bottom today – well under 4% – and will stay that way until the American economy recovers fully. This is exactly the right time to leverage civic financial capabilities to the maximum.

  • There is no legal reason San Francisco cannot set up a single EIFD for the entire city. At that scale, at least $2 billion in tax-exempt bonds could be sold. At current interest rates, the annual debt service for them would be less than $100 million per year – much less than 1% of its total $13.6 billion City budget. Funding for counties, school districts, transit districts, etc. would not be affected.

  • And today’s crisis-level needs for affordable housing, homeless and community facilities, and small business stabilization could finally be addressed at sufficient scale to have a real impact.

  • For example, if just $10 billion of total new EIFD investment was generated in the next 5 years from localities across the state, we could finance 15,000 new affordable housing units, $1 billion for new community/homeless facilities, $1 billion for endangered small business assistance, and $3 billion for the most-needed local infrastructure projects.

  • But the full potential of Enhanced Infrastructure Finance Districts is much greater than that. Over the next 10 years, $100 billion of total new California civic investment could be realized to address our State’s most critical needs – at only a small faction of the out-of-pocket annual cost to local budgets.