California is facing the worst housing crisis in its history and the effects are being felt in the San Joaquin Valley, where residents earning local wages are being priced out of communities in which their families have lived for generations.
The National Low-Income Housing Coalition says the hourly wage needed to afford a two-bedroom apartment in Merced County is $14.92 per hour, but area renters average only $12.33 per hour. Families are having to double up or live in substandard housing as a result of high housing costs, affecting the health, education and well-being of children and workers. Homelessness is on the rise.
Recognizing the profound shortage of decent and affordable homes, and the devastating impact on the state’s families and economy, Gov. Jerry Brown and leaders of the state Senate and Assembly said a package of affordable housing bills would be prioritized when the Legislature reconvenes Aug. 21. The three leaders called for passage of an ongoing source of funding, an affordable housing bond and regulatory reforms to make it easier to build affordable homes.
Senate Bill 2, the Building Homes and Jobs Act, is arguably the most important measure in the package because it provides for a permanent source of revenue for housing, an estimated $250 million to $300 million annually. That’s still much less than the $1 billion communities once received each year before the governor and legislature closed down city redevelopment agencies in 2011. Still, SB2 is an important first step in rebuilding a reliable, recurring funding source.
Over 40 states have state housing trust funds, most funded by proceeds from real estate transactions like the one in SB2. The bill has widespread support from business groups, including the California Association of Realtors, California Building Industry Association, Los Angeles Business Council, San Francisco Chamber of Commerce, and Silicon Valley Leadership Group. It’s likely the San Joaquin Valley will see more affordable housing built than could be expected from what it pays into the fund.
Unfortunately, Assemblymember Adam Gray is one of a handful of “pro-business” Democrats standing in the way of achieving the two-thirds vote needed to pass SB2. It’s hard to understand what’s pro-business about that. More affordable housing means thousands more jobs for plumbers, roofers, electricians, carpenters and others; more disposable income for consumer spending and more tax revenues for local governments.
SB2 opponents say it’s a “tax” that will burden local recorders or harm property owners wishing to refinance their homes – though recording fees are typically amortized over the term of the new mortgage. That is a smokescreen to avoid taking a vote on a fee that nearly all – including the real estate industry and business groups – agree will have negligible impacts on property owners and far greater benefits for local communities.
Another important bill is SB3, authorizing the state to put a $3 billion general obligation bond on the November 2018 ballot to fund construction, rehabilitation and acquisition of affordable homes. A recent poll by state Treasurer John Chiang found voters support $6-9 billion for an affordable housing bond. Merced County got $10.3 million from Proposition 1C, the last housing bond approved by voters in 2006, resulting in 331 new homes. Prop 1C funds have been exhausted.
We need both SB2 and SB3 to begin to replenish funding we once had. SB3 is about punting a final decision to voters in 2018. SB2 is about the legislature taking leadership now to provide long-lasting funding.
It is not credible to say “I support affordable housing” then vote against the most important piece of affordable housing legislation in a generation. Assemblymember Gray needs to take leadership by supporting SB2 and be held accountable if he does not.
Alex McCabe is a member of the Livingston City Council; Rob Wiener is executive director of the California Coalition for Rural Housing; they wrote this for the Merced Sun-Star.