apartment where Johnson has lived for nearly half a century.

The sudden disappearance of half a billion dollars of state money meant to help community land trusts has left some housing advocates questioning California’s commitment to preserving existing affordable housing, a strategy that’s less flashy than building new units but can also be less expensive.

“It’s a struggle for us, and I’m sure for a lot of other people who counted on getting that grant and didn’t get it,” Johnson said.

State lawmakers created the Foreclosure Intervention Housing Preservation Program in 2021. It was a watershed moment for community land trusts, nonprofits that purchase land and preserve it as permanently affordable housing by renting or selling the buildings on it to low- and moderate-income residents. Residents then manage the property cooperatively.

While community land trusts have tripled in number in California over the last decade, springing up everywhere from coastal and inland cities to tribal lands and the Mexican border, they often struggle to raise enough money to compete with private developers.

The state planned to dole out the half-billion dollars in loans and grants over five years, funding purchases of financially distressed buildings of up to 25 units.

Three years in, however, the state agency charged with developing the program, the Department of Housing and Community Development, had yet to give out a single dollar.

This spring, with California facing a projected $56 billion budget deficit, some lawmakers began raising concerns.

“It’s the kind of thing that you look at and it makes your head explode,” Assemblymember Jesse Gabriel, who chaired the Assembly’s budget committee, said in an interview. “This is something of importance to everyone in California, and yet we’re sitting here with this tremendous allocation of resources and making zero progress. That is totally unacceptable.”

Lawmakers scrapped the program in June.

It wasn’t the only state spending on the chopping block this year. But community land trust advocates complained that the state’s slow rollout undermined the program before it could get started.

“We got into the 2021 budget expecting the funds would be available within a year or year and a half,” said Leo Goldberg, co-director of policy at the California Community Land Trust Network. “If the program had been rolled out, there would have been successes to point to that would have made it easier to defend.”

Johnson said he immediately felt at home in the diverse Silver Lake of the 1980s, with its vibrant and organized LGBTQ community, Latino families socializing on porches and Russian immigrants filling Orthodox churches. Over the past 40 years, he’s watched the neighborhood gentrify as hipster professionals moved in, bringing their cash with them.

Johnson’s now-husband, Osbey, came to house-sit in 1990 and never left. They and their neighbors, friends who have all lived in the building for at least a decade, hosted community events in the complex’s back garden.

When their landlord signed a contract to sell the building to a for-profit developer, they feared displacement. Average rent for a two-bedroom in Silver Lake had ballooned over the years to nearly $4,000 per month, according to Zumper.com, about four times what Johnson and his husband currently pay.

After he and his neighbors, one of whom had experience organizing with the Los Angeles Tenants Union, launched a phone and email campaign, the private developer backed away from the deal and their landlord agreed earlier this year to sell to the Beverly-Vermont Community Land Trust, giving the trust until this month to raise the $1.5 million purchase price.

That should have worked: California was expected to start distributing the affordable housing preservation funds this year. Land trusts were already having initial conversations with the fund manager selected to run the program about projects that would be eligible.

But by July the expected state support was off the table. The clock was ticking to find a backup plan. The residents started an online crowdfunding campaign and threw a backyard fundraiser with barbecue and a drag show. The land trust pitched the project to small banks and credit unions.

Even if the trust got approved for a loan, the interest on a private loan would likely be much higher than using state money, foiling the tenants’ plans to keep their rent affordable. Kasey Ventura, an organizer with the land trust who had negotiated similar deals, estimated rents on the units would need to rise to at least $2,000 a month — still below market rate, but a significant jump.

The loss of the state fund was a “huge setback” for not only the Silver Lake tenants, but community land trusts across the Los Angeles area who had been banking on the support, Ventura said.

“We have dozens, if not hundreds of units that are in this bubble now of ‘How do we do this?’ ” Ventura said.

The state housing department declined to make anyone available for an interview for this story. But in an emailed statement, spokesperson Alicia Murillo said the unprecedented nature of the housing preservation program created a steep learning curve for agency staff.

The program “was very different from any other program HCD manages, both in terms of the types of projects (small-scale acquisition/rehab vs. our usual larger-scale new construction) and in terms of the mechanism for fund disbursement (using external nonprofit lenders rather than disbursing funds ourselves),” Murillo wrote.

Another state effort to create housing stability for low- to moderate-income Californians, created at the same time, launched much more quickly: Lawmakers authorized California Dream for All, a down-payment assistance plan that covers up to 20% of a home’s cost for certain first-time homebuyers, with the same 2021 budget bill that created the housing preservation program.

Less than two years later, the California Housing Finance Agency, a different arm of the state bureaucracy, had already given out all $288 million in initial Dream for All funding to eager homebuyers. This year, the agency overhauled Dream for All to serve a more diverse set of buyers; the revamped program survived state budget cuts and awarded an additional $250 million in no-interest loans.

Last year, while the Foreclosure Intervention Housing Preservation Program languished, more than 31,000 California properties that would have been eligible for the program received a notice of default, according to a California Community Land Trust Network analysis of Property Radar data.

In 2020, concerns about private equity firms buying distressed properties and converting them to market-rate rentals led to the passage of a state law that gave tenants whose foreclosed homes were sold at auction — or nonprofits working with those tenants — 45 days to match the winning bid.

But tenants and community land trusts still struggled to come up with funds to take advantage of the law. The housing preservation program aimed to change that.

“Time will tell whether the agencies can respond fast enough, but the reason I believe the governor agreed to this funding is that no one wants to have homelessness go up due to foreclosures,” Sen. Nancy Skinner, a Berkeley Democrat who championed the auction change, told online news outlet Next City at the time.

Skinner declined to comment for this story.

Johnson and his husband still hope they won’t have to leave their home. The deadline to put down a deposit on the Silver Lake building came and went, with the land trust unable to come up with a Plan B that would have raised the money any sooner than next year. He and his neighbors are asking their landlords for more time to come up with a solution.

If they don’t succeed, Johnson fears he and his husband would have to leave Silver Lake.

“We really don’t know what the future is,” Johnson said.

This story was originally published by CalMatters and distributed through a partnership with The Associated Press.