Municipal Bank of LA: Housing Solutions and Portfolio Options

This memo, a collaboration between JFI and the Berggruen Institute, addresses one of the most cited reasons for a public bank in Los Angeles: its ability to support the city’s broader infrastructure, housing, and sustainability goals.

Read the press release here.

In particular, this briefing speaks to the bank’s capacity to increase affordable housing, while also pursuing parallel mandates to build community wealth and repair historical harms to underserved communities.

Our proposals are meant to achieve cost savings for the city and long-term financial sustainability for the bank, which will not be run on a profit-seeking model.

• First, we provide a picture of the present crisis of housing affordability in Los Angeles, addressing the challenges faced by organizations working to increase housing affordability and financing gaps that prevent more rapid production or preservation of housing.
• We then speak to the opportunities within the city’s existing financing environment and funds for affordable housing, the scale of available land for production, and the amount of naturally-occurring affordable housing (or “NOAH”) that may need preservation.
• We then outline how a public bank might take up these challenges and financing opportunities, describing specific financial products which could be offered.
• We end by reflecting on some projected outcomes of those products. Legal and financial questions are addressed throughout, including recently passed legislation relevant to upzoning or reforms for infill development (SB 9).