News

Amid crisis, voters will confront housing options

Housing construction at a new California neighborhood.(Photo: Marilyn Volan)

As California rents and property values continue to rise, it should come as no surprise that three housing-related measures will face voters on the November ballot, targeting veterans’ home loans, local rent control and housing construction for the homeless. All are a direct result of California’s soaring costs.

Those costs are daunting, according to Apartment List and other cost-tracking firms.

The median monthly rent on a one-bedroom apartment in San Francisco is $3,450, and the median cost of a home is $1.3 million, an 11% increase over the past year. In Los Angeles, the average rent for a two-bedroom apartment is $2,000, about 5% greater than last year. Statewide, the average rent on a one-bedroom apartment is about $1,400, and a home costs $440,000 — far more than double the national average of $180,000.

“California is a large and diverse state, but one thing we all share is that we’re living through the worst housing crisis in our state’s history.” — David Chiu

A conventional yardstick known as the 50-30-20 rule — 50% percent for housing and food, 30% for discretionary spending and 20% for savings — means that a single person would need to earn $74,371 annually to live “comfortably” in Los Angeles, according to a 2016 financial analysis.

So here’s a breakdown for Nov. 6.

Affordable housing and housing assistance for veterans
Proposition 1, the Housing Programs and Veterans’ Loans Bond, would authorize $4 billion in bonds to finance existing housing programs and help veterans purchase homes.

One-third of the funds would go toward the CalVet Home Loans program, assisting veterans in purchasing homes, farms and mobile homes. The rest of the funds will be funneled into programs to assist low-income homeowners, housing near transit stations and mortgage assistance.

Assemblyman David Chiu, D-San Francisco, is in favor of the housing package.

“California is a large and diverse state, but one thing we all share is that we’re living through the worst housing crisis in our state’s history,” Chiu said in a statement. He said with these historic bills, “we begin to take on the affordable housing crisis that threatens our state’s economic prosperity, deepens inequality, and increases homelessness.”

As of June 29, there were no reported committees registered in opposition.

Using mental health dollars for low-income housing
Proposition 2 would allow $2 billion in bonds to pay for housing for persons in need of mental health services, in an attempt to prevent homelessness.

This money was approved years ago as Proposition 63 — the so-called millionaire’s tax — but the cash-strapped state tapped the fund over the years for other purposes as the economic downturn took hold. Proposition 2 requires that the funds be used for low-income housing targeting the mentally ill.

About 30 percent of Los Angeles’ homeless have serious mental illness, a Los Angeles Times report said.

Meanwhile, homelessness rose nearly 14 percent. A court battle stalled spending after Sacramento lawyer Ann Bernard brought suit. She contended the proposal was illegal, saying the state constitution requires voter approval for all general obligation bond measures, and Proposition 63, approved in 2004, did not specifically include housing construction as one of the ways money could be spent.

Ruth Schwartz, executive director of Shelter Partnership, a grouping of agencies in the Los Angeles area that aids people who are homeless in the area, said affordable housing for the homeless, and especially the mentally ill, is necessary.

“It is a necessary part of the recover process,” she said, adding those with mental illnesses require stable environments.

Schwartz said Los Angeles County has a larger population of homeless than most areas in California.

Based on a 2016 U.S. Census Bureau study, more than 176,300 people in the United States were unsheltered on a single night in late January. Although a relatively small portion of the homeless population are considered mentally ill — 13%-15% percent across the nation — about 30 percent of Los Angeles’ homeless have serious mental illness, a Los Angeles Times report said.

Allowing local government to enact rent control
Proposition 10, the Local Rent Control Initiative, is one of the most controversial measures on the ballot. It would repeal the Costa-Hawkins Rental Housing Act and allow local authorities to adopt rules and regulations on how much landlords who rent out houses and apartments can charge their tenants.

Californians for Responsible Housing, which was organized by the California Apartment Association, is leading the campaign opposing the initiative.

Currently, Costa-Hawkins allows landlords the right to increase rent prices to match local market rates when a tenant moves out.

According to a 2017 study by the National Low Income Housing Coalition, San Francisco residents would have to work 177 hours a week at the minimum wage to afford a one-bedroom rental in the area. In Sacramento and surrounding counties, a person would need to work 61-80 hours per week to afford a one-bedroom rental.

Californians for Responsible Housing, which was organized by the California Apartment Association, is leading the campaign opposing the initiative, stating it would hurt owners of rental housing throughout the state. The group raised about $6.5 million through July 4 to fight the measure, according to state financial disclosure records.

“It would extend rent control laws to single-family homes, institute vacancy control, and cost taxpayers tens of millions of dollars in lawsuits,” the association states on its website.

Proposition 5 would amend the landmark tax-cutting initiative, Proposition 13, which voters approved in June 1978.

The California Teachers Association is in support of the initiative, along with Los Angeles Mayor Eric Garcetti.

“I’ve always believed that those who live closest to a given block or a street know what’s best. Local government should have control over their own city,” Garcetti told NBC in Los Angeles.

The Coalition for Affordable Housing, supporters of Proposition 10, have raised about $2.3 million.

Another measure on the Nov. 6 ballot, Proposition 5, is related to housing because of tax breaks for senior citizens and the disabled, but it does not include funding for new construction.

The measure would amend the landmark tax-cutting initiative, Proposition 13, which voters approved in June 1978.

It would allow homebuyers who are age 55 or older or severely disabled to “transfer the tax-assessed value from their prior home to their new home, no matter (a) the new home’s market value; (b) the new home’s location in the state; or (c) the number of moves,” according to Ballotpedia.

Currently, homebuyers over 55 years of age are eligible once in their lifetimes to transfer their tax assessments from their prior home to their new home if the new home’s market value is equal to or less than the prior home’s value.

 


  • Earl D.

    It’s depressing to see how poorly CA’s housing crisis has been reported, and this article continues that tradition. The root cause of California’s housing crisis is housing scarcity. That is indisputable. Not building enough units to keep up with even natural population growth means someone has to not have a home. That is the central tenant of the government’s own report on housing.

    With respect to proposition 1, providing people with subsidies to get mortgages does not cause more units to be built, it simply rearranges who has the financial resources to purchase available units, i.e. it pits those just poor enough to qualify for assistance and who are veterans against those who make just too much to qualify. That policy may or may not be justified but it in no way addresses the state-wide housing shortage. And at $4 billion, its price tag is steep for a program that does nothing except re-ration with no attempt at even mitigating the impacts of scarcity.

    On the other hand, proposition 5 (expanding prop 13) & 10 (expanding rent control) will actually make the crisis worse proposition 5 by magnifying the anti-development effects of proposition 13 and proposition 10 by pouring gasoline on the fire by striping property developers of their ability to make development pencil-out financially and to raise investment dollars for new development. These are not fringe opinions, they are the main-stream, non-ideological consensus of those who are intellectually honest and knowledgeable about the housing industry.

    Only prop 2 has a remote chance of even marginally improving the current situation, and even then only if the fund are actually used to build not units, something that historically has not been done with homeless funds.

    The inability of CA to deal with it’s long building housing problems is due to a misapprehension of what measures could possible actually help the situation as opposed to do nothing or make it worse. And that misapprehension is the result of years of shoddy reporting, which this piece does nothing to remedy.

  • Earl D.

    It’s depressing to see how poorly CA’s housing crisis has been reported,
    and this article continues that tradition. The root cause of
    California’s housing crisis is housing scarcity. That is indisputable.
    Not building enough units to keep up with even natural population
    growth means someone has to not have a home. That is the central tenant
    of the government’s own report on housing.

    • Earl D.

      With respect to proposition 1, providing people with subsidies to get
      mortgages does not cause more units to be built, it simply rearranges
      who has the financial resources to purchase available units, i.e. it
      pits those just poor enough to qualify for assistance and who are
      veterans against those who make just too much to qualify. That policy
      may or may not be justified but it in no way addresses the state-wide
      housing shortage. And at $4 billion, its price tag is steep for a
      program that does nothing except re-ration with no attempt at even
      mitigating the impacts of scarcity.

      • Earl D.

        On the other hand, proposition 5 (expanding prop 13) & 10
        (expanding rent control) will actually make the crisis worse proposition
        5 by magnifying the anti-development effects of proposition 13 and
        proposition 10 by pouring gasoline on the fire by striping property
        developers of their ability to make development pencil-out financially
        and to raise investment dollars for new development. These are not
        fringe opinions, they are the main-stream, non-ideological consensus of
        those who are intellectually honest and knowledgeable about the housing
        industry.

    • jskdn

      The problems we face aren’t in spite of the news media, they are significantly because of them. The willful blindness they exhibit makes them very culpable for the housing problems of some people. I say some people because, contrary to the claim of Assemblyman David Chiu, the housing crisis is not the “one thing we all share.” In fact those who own the real estate are beneficiaries of the crippling prices others are forced to pay. The consequence of the lack of a housing supply relative to the population isn’t exactly hard to understand.

      The main driver of California’s population growth has been immigration demographics. In fact there has been something like net-domestic out migration of about a million over the last decade or so. The media pushed mass and illegal immigration while ignoring that there was a huge anti-development sentiment in the state, and laws it can exploit, that made providing the corresponding needed housing impossible. And then they pretend to care about the suffering they created.

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