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June 9, 2017

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California Affordable Housing

by Bob Schwartz

California Affordable Housing Problem

The California legislature in Sacramento is considering two new bills to help California’s housing problem. With the healthy recovery of California home prices, combined with the lack of normal resale inventory of homes, the California affordable housing problem has been exasperated.

Housing Affordability - California Affordable Housing

The Sacramento California lawmakers say they need to pass a combination of measures to address the state’s housing crisis. It has been estimated 1.5 million California families lack access to affordable housing. California also has disproportionately high rates of homelessness.

The first bill moving through the legislature is SB35. This bill removes some development restrictions in cities that fall behind on housing production goals. It passed 23-12 in the Senate.

The second bill is AB73, which rewards cities for streamlining the approval of housing, particularly for developments near public transportation. It passed the Assembly 46-19.

California Affordable Housing

San Diego Home Rental - California Affordable Housing

The California Senate also voted 30-9 to put a $3 billion bond for affordable housing on the November ballot.

The California Department of Finance published two charts illustrating the housing crisis in the state. The first  chart  shows California population growth since 2010, and the other shows that housing supply grew only half as much!

California has seen a relatively modest population growth, approximately 6 percent, since 2010, but has added just 400,000 housing units, a 2.9 percent increase.

So, the gap between California’s population growth and its growth in housing is getting wider every minute. The virtually unanimous conclusion of housing experts is that the reluctance of local governments, particularly cities, to approve new housing projects due to backlash from self-proclaimed environmentalists and not-in-my-backyard activists is a major factor.

As far as California’s population growth  versus affordable housing, individual California cities also show a gap that in many cases is larger than the overall state housing gap. San Diego: 8 percent population growth, 3.9 percent housing growth. San Francisco: population up 8.6 percent, housing up 5.9 percent. San Jose: 10.7 percent more people, just 5.7 percent more housing. Sacramento: population up 5.7, housing up 1.1 percent.

There are also a few other bills in Sacramento that are addressing the states affordable housing crisis.  One Sacramento bill would tax real estate transactions to underwrite low-income housing. Personally,  this is an ill-conceived bill that just taxes California home sellers who are already burdened with large property taxes. Unfortunately, as is usual some of these proposed new bills would actually discourage construction, such as allowing cities to enact tighter rent controls, or mandating higher-priced union labor on projects.

Some believe mandating union labor on construction projects increases their cost by as much as 30%! So, with this in mind a rational person would wonder why such a bill is even under consideration in Sacramento. For those of my readers who may not be familiar with California politics, the answer is really quite simple. Yes, it’s an undisputed fact that the California legislature is controlled by the large unions huge political campaign contributions.

 

California Affordable Housing

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1 Comment Post a comment
  1. Jun 17 2017

    California housing market . . . The crisis for families living at or close to the poverty line absolutely deserves attention. But what is also disturbing about current trends is that the crisis is now spreading to middle-income households, families earning between $35,000 and $75,000 per year.

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