Frequently Asked Questions
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Most affordable housing today gets built using tax credit financing, and that system has helped us build a lot of homes, but it forces a tradeoff between affordability and time. When a developer uses tax credits to make a project affordable, it could mean years of waiting through a web of competitive state, local and private approval processes vying for funding, while costs climb. When a developer finances a project privately instead, it can move faster, but the homes end up priced for the returns that developer needs to turn a profit, which means only wealthier residents can afford them.
Working Families Housing does not replace LIHTC but is instead built to work alongside that system, by addressing what it wasn’t designed to do at the scale and speed we need now. By lowering the cost of borrowing, attracting low cost private capital, pooling resources across cities and the county, and recycling public investment instead of starting from scratch each time, this model can deliver homes that are both affordable and built fast.
Innovative financing models, anchored by smart public investment, have worked for decades in other countries, unlocking the capital needed to build and maintain homes that stay affordable for the long run, not just for a few decades. The same approach has succeeded closer to home too. Local governments across the U.S. have built similar models, including the Los Angeles County Affordable Housing Solutions Agency and Montgomery County, Maryland’s Housing Opportunities Commission, along with other Joint Powers Authorities that similarly pool resources together like the Marin County Public Finance Agency.
These models work in practice. What we’re doing with Working Families Housing is bringing several of these proven pieces together at once, governance, financing tools, and public investment, to build a real, lasting alternative to building affordable homes that depends on tax credit financing alone.
The Working Families Housing model is designed around shared ownership between a mission-aligned developer and the public, rather than a profit-motivated landlord. This matters because it shapes the things residents care about most: affordable rent, and a building that’s properly maintained.
In the near term, homes are developed and operated by a private developer who agrees to that shared mission, including specific affordability commitments. The Joint Powers Authority(JPA) holds an equity stake in each project on behalf of working families across the county, which gives us a real say in how it’s run, and reinvests the profits back into our community.
Over time, as the JPA grows and takes on more projects, it has the potential to take on a larger role itself, eventually serving as asset manager and developer on projects directly. The goal throughout is the same: housing decisions that serve residents, not outside investors.
Working Families Housing is built to do more with every dollar, not spend more. There are three pieces working together: revolving public equity, a credit enhancement, and private investment from institutional investors like union pension funds.
Instead of spending public money once and starting over, revolving public equity works like a smart investment: it provides the upfront capital a project needs, and once that project is built and refinanced, the same dollar comes back and goes toward the next one. This allows Working Families Housing to continuously scale while building a portfolio.
The credit enhancement makes that money go further. When a public entity agrees to back a project with its own strong credit standing, lenders take on less risk, so they offer better borrowing terms, the same way a cosigner with good credit can get someone else a better rate on a loan. It also means loans don’t have to lean as heavily on rental income, which lowers costs. The credit enhancement enables new mission-aligned investors to participate such as union-affiliated pension funds,. With Santa Clara County union members’ pension funds managing more than $1.1 trillion in assets, we have a huge untapped opportunity to bring new capital to address housing, and in the process reduce the amount of direct public subsidy needed to build housing our families can depend on. Normally, regulations require investors to seek higher returns, but credit enhanced risk reduction will enable them to accept risk-adjusted returns.
Yes, in three concrete ways: it costs less per home, it gets built faster, and it costs renters less.
Lower cost per unit comes from combining revolving public equity with the credit guarantee, cutting out the expensive private financing layers a typical project relies on. By removing bureaucracy and developer profit margins built into the traditional model, this approach can build homes for about $180,000 less per unit. Faster delivery comes from skipping the competitive, multi-round LIHTC process most affordable housing depends on, where securing financing alone can take years before construction even starts. Without that wait, projects can move from planning to breaking ground in a fraction of the time, which also substantially reduces the cost.
The average tenant in a Working Families Housing home would save approximately $6,800 annually in rent compared to a market-rate building. Across an initial 1,500 homes built through WFH, that translates to over $10 million in annual rent savings passed directly to working families.
Working Families Housing is designed to keep rents low, permanently. Most affordable housing projects are only required to stay affordable for a set number of years, and once that period ends, costs can rise and rents can climb. This model removes that expiration date entirely.
Instead of pegging rents to Area Median Income, which tends to rise quickly and can push costs up fast, this model sets a rent cap at 3%, lower than San Jose’s current 5% cap. That means rent increases stay smaller and more predictable, year after year.
It’s also built to keep homes in good condition. Capital improvements are factored into the model from the start, rather than depending on finding extra public dollars down the line, so the quality of housing can stay high without driving rents back up.
Union labor isn’t a line item in this model, it’s a genuine partner in financing, building, and governing these homes.
Every project built under Working Families Housing is subject to strong labor standards, which means union jobs with sustaining wages, real benefits, training programs that build careers, and the kind of safety protections that keep workers safe on the job. These standards and partnerships are core to how we design projects under this model
Organized labor is also a financial partner. Union-affiliated pension funds, which collectively manage more than $1 trillion in assets, are being explored as investors in these projects. The credit guarantee is what makes that possible: by reducing risk for lenders, it opens the door for pension funds (who have to be cautious stewards of workers’ retirement savings) to invest in affordable housing they otherwise couldn’t.
This model works best for developers who build value through long-term operating performance, not those whose business model depends on collecting fees and moving on to the next project. In exchange for accepting lower short-term returns, mission-driven developers get something most projects can’t offer: simpler financing, faster timelines, and far more predictability from start to finish
Two demonstration projects are kicking off right now, putting some of this model’s core principles into practice. Building this at full scale will take more time, and it will take political will. Over the coming months, we will continue to work with our partners to work out the governance structure and financing tools needed to bring this model fully online.
This is housing by working people, for working people. Homes built through Working Families Housing serve a range of income levels, primarily households earning 50 to 80 percent of the Area Median Income, the teachers, nurses, retail workers, and tradespeople who keep this county running.
Because this model is locally governed, it can also fix one of the most frustrating parts of qualifying for affordable housing: the constant, stressful re-verification process families have to go through to prove they still qualify, year after year. With local control over those decisions, this model can make that process simpler and less burdensome, without families needing to fear losing their home over paperwork.
Working Families Housing is designed to be built throughout Santa Clara County, with site selection driven by practical considerations, local government priorities, and community needs. Right now, most areas zoned for medium and high density sit along major transit corridors across the county, which makes them strong candidates for these projects.
Local jurisdictions stay in the driver’s seat. Cities and the county invite and partner with the Joint Powers Authority on specific sites, so local control works in their favor instead of slowing things down, and cooperation across jurisdictions can grow over time as more places see the benefits.
Tenants also have a real voice in these decisions, representation isn’t an afterthought, it’s built into the model from the start.
This approach works especially well for mid to large size projects. That matters right now because so much new housing has shifted toward smaller, lower density projects like townhomes, often because the financing market makes anything bigger too expensive. By making larger projects feasible again, this model helps the county make real progress against the regional housing goals it’s currently falling well behind on.
