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Developers: delayed welfare exemptions force bridge loans, lost refunds and threaten preservation work
Summary
Nonprofit developers told the BOE that unpredictable county administration of the welfare exemption forces them to borrow to pay property taxes, divert staff time, and in some cases lose refunds after multi‑year delays, undermining preservation and operations budgets.
"Property taxes are often one of the largest fixed annual costs in an affordable housing operating budget," said Taisha Watts of the California Housing Partnership, explaining why exemption timelines matter to project feasibility.
Speakers from major nonprofit developers described the downstream consequences. Brian Dove of Eden Housing said his group files first‑stage welfare exemption claims within 90 days of construction start but sometimes waits longer for county decisions than it took to build and lease a property: "It takes many counties longer to review and approve a first filing application than it takes to construct, lease up, and celebrate at a grand opening event." He described a case where a county took more than four years to approve an initial filing, causing the developer to face a statute‑of‑limitations barrier to collecting a refund.
Paul Schafer of the California Council for Affordable Housing said the exemption's value can represent "hundreds of thousands of dollars annually" and that AB 2353 was intended to prevent providers from being financially penalized while government review is underway. Developers asked the BOE to produce a BOE‑issued confirmation or certificate developers could present to lenders and title companies to reduce escrow and loan conversion delays. Panelists also urged BOE outreach to lenders and title insurers so the statute's protections function in escrow practice.
