Opinion
Memo to Brown: Affordable housing is a life and death matter
A family housing illustration by arka38, via ShutterrstockThe same day Governor Jerry Brown delivered his proposed state budget, Barbara Brown died of exposure on a skid row street during an El Niño storm.
More than the coincidence of a common last name links the two. As a literal storm killed this unfortunate woman, Gov. Brown once again ignored California’s worsening housing crisis, instead calling on the state to squirrel away $2 billion on top of required state reserves in order to save for an economic “rainy day.”
For Barbara Brown, every day was a “rainy day.” The fact that more than 100,000 Californians are living on the streets, that millions more are struggling to keep a roof over their heads, and that soaring rents deter companies from investing in California all seem to be lost on our Governor. Asked by a reporter whether surplus state funds could be invested in affordable homes to help address these triple threats, the Governor retorted that the budget “is not a candy store.”
State investment in affordable housing has plummeted – primarily due to the elimination of redevelopment agencies in Brown’s third term.
When a safe and affordable home can literally mean the difference between life and death, such flippant comments reflect, at best, an insensitivity to those affected by California’s housing affordability crisis. At worst, they show an administration willing to let the widespread human disaster grow worse.
Meanwhile, rents have skyrocketed statewide. Los Angeles and San Francisco have led the way. But even inland areas like Sacramento are now seeing rents rise by double-digit rates annually.
California must address the unprecedented housing crisis in 2016. Failure to do so in this time of surplus will ensure future surpluses will vanish.
For instance, when Toyota announced last year that it would move its headquarters out of Torrance, California, some blamed our state’s taxes and regulation. But newer reports show a different culprit. “It was really about affordable housing,” said insider Albert Niemi, dean of the Cox School of Business at Southern Methodist University. Toyota’s departure – along with 3,000 workers and their spending power – is another wake-up call that we can no longer ignore California’s housing crisis.
Unfortunately, even though business leaders including the Orange County Business Council and the Silicon Valley Leadership Group have been sounding the alarm bells for years — naming workforce housing affordability as a major threat to the state’s economy – action has been hard to come by.
State investment in affordable housing has plummeted – primarily due to the elimination of redevelopment agencies in Brown’s third term, and the expiration of state bonds that leveraged federal dollars and drew billions in job-creating private investment to the state. When the Legislature passed AB 35 (Chiu) in 2015, homeless advocates, affordable home builders, and business leaders alike were encouraged that the expansion of the successful state tax credits credit program would help get affordable developments off the ground and leverage $1 billion in federal money that we’re now leaving on the table.
Unfortunately, Governor Brown had a different idea. In his veto message for AB 35, the Governor wrote “Tax credits, like new spending on programs, need to be considered comprehensively as part of our budget negotiations.” Yet, when the Governor launched budget discussions for the year with his proposal last week, new housing investment was noticeably absent.
The governor has said that he is focused on saving for a rainy day, even if it means holding the line on worthy programs in the short term. But with Californians literally dying on our streets, we wonder what more it will take for Gov. Brown to see it’s raining now?
Recognizing the urgent need to curb homelessness, build workforce housing, and the opportunity to create jobs by bringing federal housing investment to the state, representatives in both houses of the Legislature have called for renewing investments in affordable housing. It’s a critical conversation that must begin now, and one where the Governor’s leadership is sorely needed.
—
Ed’s Note: Ray Pearl is executive director of the California Housing Consortium, a non-partisan advocate for the production and preservation of housing affordable to low- and moderate-income Californians.
Want to see more stories like this? Sign up for The Roundup, the free daily newsletter about California politics from the editors of Capitol Weekly. Stay up to date on the news you need to know.
Sign up below, then look for a confirmation email in your inbox.
It is counter-productive for any homeowner in California to desire that housing become cheaper.
They only want housing cheaper after they sell at a high price.
This is why the housing crisis will not change.
We’re not really talking about home owners, Joe.
Are we not talking about affordable housing?
Cities and counties generally decide when, where, and to what extent housing development will occur (cities make these decisions within their boundaries and counties in unincorporated areas).
Local zoning laws and building codes specify where housing may be built, as well as its density, quality, and style.
Look into the added costs of zoning requirements, approval processes, project fees, and utility hookups. These all drive up the cost to build which is passed onto end users.
If we know that housing is unaffordable and these costs are a major factor, why doesn’t this change.
That is simple.
Would you want a subdivision with lower priced homes down the street from your house?
You would not if you own an expensive home in the area.
This negatively impacts the value of your house. How do you protect the value of your house, by passing zoning laws and building codes specify where housing may be built, as well as its density, quality, and style.
In case you are interested.
http://www.pointloma.edu/sites/default/files/filemanager/Fermanian_Business__Economic_Institute/Economic_Reports/BIA-Final.pdf
Kill the Bullet-train and use that money for housing!
What Pearl is calling “affordable housing” is that paid for by other people. Anything is affordable if someone else pays for it. Pearl represents people who get paid, and paid well, to use other people’s money in such endeavors. For people who care about affordable market housing, given that the market is where the overwhelming share of people will get their housing, the problem is those in government who are largely responsible and the selfish people that represent.
By your definition (“that paid for by other people”), every home in California is affordable housing. State taxpayers subsidize homeowners to the tune of $5 billion a year. (This is the amount of foregone state revenue as a result of the mortgage interest and property tax deductions for homeowners.) If the state subsidy for rental housing were this high, the private and nonprofit sectors could build enough rental housing to fully meet the needs of low income seniors, working families and people who are homeless. But those folks aren’t the priority of the state associations of realtors or big homebuilders, so an overwhelming amount of housing subsidy goes to high-income homeowners instead of people who really need it.
Mortgage interest deduction is bad policy and drives up the price of housing to the degree it figures in what people are willing to pay. I had a published letter in the LA Times arguing that it be phased out over a considerable period, so as not to unduly harm those who made decisions based upon it. That was over a decade ago and would be largely gone by now had my advice been followed.
Deductions for taxes is another thing. Removing that means being taxed again on the taxes paid, and at the highest marginal rate of the taxpayer.