The failure of Fortress Investment Group to sell $600 million of private activity bonds for the $8.4 billion Brightline West high speed rail link between southern California and Los Vegas has freed up money for affordable housing projects in the state.
“Fortress won its entire request,” Bloomberg City Lab reported. “But the firm, which also received private activity bonds from Nevada, failed to get enough investors on board and is postponing the project, which had been scheduled to open in 2024. All of its California bond allotment is now returning to the state.”
On Nov. 18, a state committee chaired by Treasurer Fiona Ma decided that all of the available bond funds should go to affordable housing projects.
The Debt Limit Allocation Committee, which controls the allotment of bonds, allocated the funds for housing, first prioritizing those that serve extremely low income residents, said committee chair and Treasurer Fiona Ma after the meeting. “They are the most vulnerable populations,” she said.
Ma had earlier said the state had important priorities other than housing and suggested some of the Brightline bonds could go to non-housing uses such as waste facilities. But she said there were no such projects ready to go.
“This decision will result in 2,600 additional affordable homes and boost economic activity at a time when the state needs both desperately,” he said.