A controversial desalination plant in Orange County could receive massive state subsidies, but advocates argue the money would be better spent on affordable housing projects to relieve the state's housing crisis.
The California Debt Limit Allocation Committee could allow a tax-free bond sale for a controversial desalination project in Orange County while ignoring the opportunity to make close to $2 billion available to affordable housing projects, according to a report by Oscar Rodriguez and Garry Brown.
As the panel that decides allocations that let companies and developers finance projects at low interest rates, the commission plays a crucial role in the success of affordable housing projects, which rely on below-market financing to offer below-market rent. According to the article, if the allocations are diverted to the desalination plant, affordable housing would also lose $880 billion in federal tax credits, for a total of almost $2 billion in lost funds.
The authors argue that "no good case can be made for diverting taxpayer money to the private for-profit desalination project," which, according to the article, "has been deemed the least cost-effective and most financially risky of all water supply alternatives in Orange County" and threatens to raise water costs for low-income families and small businesses.
With all the economic, social, and environmental risks posed by the plant, Rodriguez and Brown call on the state to reject subsidizing it with public funds and put the resources toward urgently needed affordable housing instead.
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