#CAHOUSING: Affordable Housing

CAPITOL WEEKLY PODCAST: This Special Episode of the Capitol Weekly Podcast was recorded live at Capitol Weekly’s Conference on Housing, which was held in Sacramento at the California Endowment Conference Center on Thursday, March 9, 2023.

This is Panel 2: Affordable Housing

Speakers: Marilyn Ezzy Ashcraft, Mayor of Alameda; Peter Cohen, Sacramento Housing Alliance; Chione Lucina Muñoz Flegal, Housing California; Mark Stivers, California Housing Partnership

Moderated by Chris Nichols, Capital Public Radio

This transcript has been edited for clarity.

RICH EHISEN: Okay, hello everybody, once again, and welcome to the second panel of the morning for the Capitol Weekly Open California Housing Conference. I am of course, Capitol Weekly editor in chief Rich Ehisen. I’m gonna be introducing our second panel’s moderator here in just a moment. This panel of course, on Affordable Housing, we’re gonna save a little time at the end for questions, so please, if you’ve got one… Save it for the end. And with that, I’m gonna say hello to Chris Nichols from Capital Public Radio. He’s gonna moderate this panel for us on Affordable Housing. He’s going to address the introducing of the panel to his immediate left.

CHRIS NICHOLS:  Good morning everybody, Thanks for joining us. It’s great to be here. I’m Chris Nichols, I cover housing affordability and homelessness for Capital Public Radio right here in Sacramento. And as we know, California has an extreme shortage of affordable housing. Estimates say that shortage is anywhere from one million units to three-a half million units.

What are the consequences? Lower and middle income Californians are priced out of most communities across the state. They’re working multiple jobs to pay exorbitant rent. Many have given up on buying a home in the places they grew up. Seven in 10 Californians say that housing affordability is a big problem in their part of the state – that’s according to a January survey by the Public Policy Institute of California. That same survey found one in three Californians say their housing costs make them seriously consider moving out of the state.

Of course, the lack of affordable housing is much more than just an inconvenience in California. Access to an affordable place to live can be the difference between remaining housed or living in a shelter, a car or on the street. Experts agree, the state’s affordable housing crisis is a key driver in our growing homelessness emergency. That’s an emergency that I cover closely here in the Sacramento region. The two problems are vast, immediate and closely linked together. This morning, I’m looking forward to getting a deeper understanding of California’s affordable housing challenge, including why it’s so difficult to build more of it, and what’s being done to change that.

Our panel includes Chione Flegal, Executive Director of Housing California, Marilyn Ezzy Ashcraft, Mayor of the City of Alameda, Peter Cohen, Policy Director at Sacramento Housing Alliance, and Mark Stivers, Director of legislative and regulatory advocacy at the California Housing Partnership. But before we start and hear more introductions from the panelists, I want to just send out a quick reminder, this is a complicated topic, hoping the panelists can use plain language, avoid acronyms as much as possible, define our terms and just use concrete examples when possible. Each panelist is gonna introduce themself a bit further, we have a maximum of two minutes for each to do so. Let’s start right here to my immediate left, Marilyn Ezzy Ashcraft.

MARILYN EZZY ASHCRAFT: Thank you, Chris. Good morning, everyone, it’s a pleasure to be here. I am Marilyn Ezzy Ashcraft, Mayor of the City of Alameda down in the Bay Area. I took the train here today. It was a great trip, and I am into my second term as mayor, so I’ve served as mayor now, one four-year term, starting another. Been on the city council since 2012, on the City of Alameda Planning Board since 2006. And during all those years, we knew we needed to address housing, the need for housing in our city, and we have a bit of a sordid past when it comes to housing. And we’ve been working on it all of those years, and yet it’s never been more urgent, but I’m always proud these days to say that the city of Alameda is the first city in northern California to have its Housing Element certified by the State Housing and Community Development Department – and we can break for applause here if you like – But, anyway, we take especially, I wanna be an example for other cities. I’d like to say if Alameda can do it, anyone can. Thank you.

CN: Thank you. And, Peter.

PETER COHEN: Yeah, thank you, Chris, for having me. My name is Peter Cohen, and I’m the Policy Director with Sacramento Housing Alliance. Welcome to Sacramento, if you’re not local. I’m actually relatively new to this area. I’ve had a long history of doing affordable housing policy advocacy work in San Francisco, in the Bay Area, and I’m now very glad to be bringing some of those insights, Sacramento. I think what I could bring to day to this panel discussion is that while Chris said, there’s a statewide affordable housing crisis, the action happens at the local level. Always. And I think I can talk about that… the variations, whether it’s bigger cities like a Sacramento city or whether it’s the suburban satellite towns in the metro area, there’s various nuances that I think make it very important to understand why things happen, where they happen and how we can actually have good interventions. Thanks.

MARK STIVERS: I’m Mark Stivers with the California Housing Partnership. Our organization is a nonprofit think-and-do-tank, is the way we like to describe it. I do the policy stuff, I guess that’s the thinking part, but my colleagues work on about 200 different affordable housing developments a year, trying to put all the financing together. And there are many layers of financing that’s quite a job, and so that’s where we sort of do technical assistance and policy work. Most of my career I was in the legislature or overseeing state affordable housing financing programs. So, sometimes I like to think I’m not very good at my job – after 25 years, we still have a housing crisis, and it may be even worse than when I started, so we’re still plugging away.

CHIONE FLEGAL: Good morning, my name is Chione Flegal, I’m the Executive Director of Housing California. Housing California is a state-wide organization committed to building a California with homes, health and wealth, for all people. We really pursue our work through three paths. Like Mark, we’re a multifaceted organization, so we do policy work and have the privilege of partnering with some of the folks on this panel here in Sacramento. We have a body of work that’s really around organizing people who are impacted by the housing crisis, residents of affordable housing developments across California, and really connecting them to the housing conversations that are happening in the policy realm, so that they have an opportunity to directly shape decisions that impact their lives. And then several years back, we really recognized that if we were gonna be successful in the advocacy world, that there was a whole body of work we needed to do to really change the way people thought about housing. When we would lobby in Sacramento, we would hear policy makers say like, ‘Oh, this isn’t really an issue in my district,’ or, ‘you developer folks just care about the number of units, you’re not really representing anyone,’ and it felt really important to change the way Californians think about housing and to really uplift the notion that housing is a fundamental benefit that all of us really need in order to succeed.

I come out of the racial justice movement, that’s what I’ve been doing for the last 20 years. And in that work, it was really clear that we would never be able to accomplish what we cared about for low income people and people of color in this state if we couldn’t crack the nut of the incredible housing injustices they were experiencing. So, super excited to be part of the Housing California team where we’re trying to hold all of these pieces together and really bring together partners working on homelessness, on affordable housing development, on service provision, and residents who are impacted directly every day.

CN:  Well, thank you panelists. I think it’s great that we have a mix of both local and more statewide perspectives. I definitely have some questions for the local panelists. But let’s start with the bigger picture: As I’ve spoken to folks about affordable housing through the years, it seems like the biggest barriers to creating more affordable housing are pretty well known. Mark, I’d like to start with you, if there… First, what are those barriers? But if they are well-known, why does California still have this problem?

“If cities spent half as much effort going after new housing as they do after big box retail and auto malls, we would actually be in a very different place.” – Mark Stivers

MS: Based on my experience, I’ve always thought there were three main issues why we don’t build more housing in California. Two of those, I would say are applicable to all types of housing, not just affordable housing, and one is more specific to affordable housing. But think about… During the pandemic, we had a shortage of toilet paper for a while. We had a shortage of hand sanitizer…  but yet it took a couple… [garble] Yeah, canned beans — it took a couple of months, but people can ramp up production. A company doesn’t need permission to go and produce more toilet paper.

Housing is a basic human need, and yet we subject it to: you need to have permission of a local government to be able to move forward. That’s just kind of an interesting concept, I think, to begin with, but then the issue… I actually feel very much for Mayor Ashcraft and her colleagues in local government… The dynamic at the local level is really difficult to approve housing.

On the one hand, the constituents aren’t super wild about housing. Either they’re not that interested in just any change in the community.. You know, they’re less likely to approve higher density development, they really don’t like rental housing, and God forbid you start talking about affordable rental housing.  That’s the least supported by constituents – and elected officials obviously look to their constituents – they lead, but they also need to be respectful of constituents’ views.

And so, from a developer’s perspective, you start with one foot in a hole. It is difficult to get that permission for political reasons. But then your other foot is also in a hole, because many local governments see housing as a fiscal loser. That they don’t get a lot of revenue from property taxes. Cities on average, I think it’s 17 cents on the dollar from every property tax dollar that is raised. And they see Commercial as a much bigger revenue generator. And I sometimes like to think if cities spent half as much effort going after new housing as they do after big box retail and auto malls, we would actually be in a very different place. The politics…. the fiscal win would outweigh some of the political negatives, but as it is, we’re a negative on both fronts. We start with both feet in a hole. And I think that’s a fundamental reason why it’s so difficult to sort of build more housing in California.

The third reason comes back to this issue of just affordable housing, which is… with affordable housing, there has to be some level of subsidy. The rents that lower income people can’t afford are not enough to cover a mortgage that’s big enough to construct the building. You have to have some sort of subsidy in there. Between federal and state sources, we have a significant amount of subsidy, it gets us to about 20,000 new affordable housing units a year, these days.  We need 120,000 per year. So at the peak of our production we’re at one sixth of where we need to be. And so frankly, we just need to scale up on the subsidy side. That’s uh, the problem. I could go in. Did you want me to also chat about why we haven’t made more progress on those things or?…

CN: Let’s jump to our elected leader on the panel, and then we’ll come back to that and maybe we’ll hear from Mayor Ezzy Ashcraft about that too. But, Mayor, you have constituents, you’re an elected leader, you also helped your city adopt an ambitious plan to build more than 5,000 homes and apartments. And that’s despite Alameda’s historical resistance to new growth. What was the key to getting that plan done, and how can your city and others make sure plans on paper turn into actual housing?

MA: Thank you. Interesting listening to the previous comments. So really quickly, my mantra for holding elected office is that you need to have three things simultaneously: thick skin, a sense of humor, and a backbone. And so while we listen to our constituents, the tail doesn’t wag the dog. And we try to make rational decisions. That’s not to say we all agree all the time, but you can’t be afraid to lead on issues that you think are important, and I consider housing a moral imperative. We have a housing crisis in the state, every city needs to address it. So, the day that I start doing things, just because I think it’s what constituents want is when I will step down from elected office. And I will say I just ran for re-election in a three-person race. I came out first with 60% of the vote and carried every precinct in my city. And it was from a lot of talking, to communicating, and you listen to people who don’t agree with you. But you also educate them about why this is important, why we have to do what we do. So how we came to pass that ambitious housing element… it didn’t happen overnight.

Chris Nichols, Marilyn Ezzy Ashcraft, Peter Cohen, Mark Stivers and Chione Fleagal at A Conference on Housing, March 9, 2023. Photo By Scott Duncan, Capitol Weekly

I met with our planning director last week, as we were preparing for today, and he reminded me [that] we started talking about this three and a half years ago. It’s not like the state springs your RHNA numbers and that, ‘oh, your housing element is expiring this year.’ So you’ve gotta get going. We know that in advance, and I’d like to say hope isn’t a strategy, and neither is denial. You just… You have to be realistic, you can go through the denial phase or, ‘we’ll fight it in court. We’ll do this, we’ll do that.’ At the end of the day, you’re gonna do your numbers.

So, we did a lot of public education, workshops, when we were doing our council meetings in Zoom, we actually had a gentleman from HCD be one of our speakers at a council meeting one night to talk about how we’re gonna meet our housing element. And he was wonderful. And that was such an eye-opener.  Our Planning Director, bless his heart, went out and did in-person workshops, to get yelled at, shouted down, but he’s also got one of those just great sunny dispositions and such a good educator. I do a monthly newspaper column, I’ve written about it, I’ve spoken about it, and then you’ve gotta carry that message over and over again.  And when I was knocking on doors in my last campaign, it was so gratifying to hear, people do understand that their kids can’t afford to come back and live in the city where they grew up. Teachers can’t afford to live here. So we’re having to close schools ’cause we can’t hire teachers – this is a problem. So you educate the community and you just keep repeating over and over, note, we got to this point because other councils kick this down the road. We’re not gonna be the one to do that.

CN: What is the challenge now? You have that plan adopted, but is the next part of it just as difficult – more difficult? How will you actually turn it into real housing?

MA: Well. I mean, we’re doing it now, we… I mentioned this on the break… I was just at a ceremonial signing yesterday for a project that is gonna help us meet our affordable housing in the moderate level category. And it is an existing apartment building. It’s 180 units and 80% of those, 132, are actually going to be dedicated to affordable for moderate income tenants for 55 years. And this was a public-private partnership with Alameda housing authority, with this developer out of Santa Monica, the Chan Zuckerberg Initiative put money into it, as did some other private partners. And so this took a 57-year-old apartment building, it’s had some renovations, we got a little tour yesterday. And that is helping us meet those numbers.

Out at of our former naval air station, we have already opened some 100% affordable apartments for formerly homeless veterans, for her formerly homeless families. That’s happening now – as we sit here today, moving forward, we know that the economy is in a little bit of a nosedive, and I worry all the time about everything, but right now it’s about what will that do to mortgage rates? To the cost of borrowing money? To the cost of labor? To the cost of supplies? But we move along one project at a time, and if you need to make some course corrections, maybe do a little longer timeline for a project, you do it, but you keep moving forward.

CN: Peter, just staying on the local focus for a moment… Based on your work with local governments, I’m interested in hearing your perspective on the challenges cities, other cities, other counties are facing in meeting these ramped-up state expectations for delivering affordable housing. Could you define what those expectations are, and also what are the consequences if local governments don’t meet them?

PC: Great question, Chris. And I’m gonna follow Marilyn and Mark with what are the three barriers. I’s all about the threes, and then I’ll come back to what the scale of that demand or need is. But I think what we’ve always said in affordable housing is, the three magic ingredients are money, land and capacity. That’s the sauce. Those are the primary ingredients.

Yes, it takes political leadership. Yes, it takes good public will to support that, but that varies greatly across the state jurisdiction by jurisdiction. But the key ingredients to make stuff happen on the ground to produce units is money, land and the capacity of organizations to do that work. And I just gotta say, it’s kind of an investment question mark, you put it kind of financing terms, I think we gotta spin it because in California, no different than I think kind of American culture, we sort of wanna get stuff without paying for it. So we see things as though they’re somehow a drain on our fiscal reserves or taxes. [But] it’s an investment in what we need to produce.

“If we fail, if we fail as an affordable housing sector of having the capacity, the money, and the land, if we fail as political leaders… it’s not just we failing numbers, it’s not just we failing our political talking points. We fail people.” – Peter Cohen

And I’d sort of flip it around. Rarely do hear talking about who are we trying to create housing for. And I think we start to put the human face on what it is we’re investing in, it starts to slowly change the ‘why are we doing it,’ and ‘why is this investment necessary?’ But that’s the basic problem – we’re just under-investing.

What Chris alluded to is, the state of California, every what, five, eight years, comes out with a new analysis, projecting forward … sort of a crystal ball analysis of, what is the population, what’s the demographics of the state? They break it down by regions. And what does that gonna look like over the course of the next five to seven years, based on different kinds of job growth, income factors. It’s a whole science, and then that creates a projection of need for housing at different affordability levels. Because folks are doing janitorial work, they don’t make the same as CEOS, and everything in between. So, it’s not just the total population growth, it’s organized by the income of the household, which I think is really smart. And then that’s passed on to the regions, which is in turn passed to every city.

So, Sacramento City has a batch of numbers that says ,‘this is what your population is probably gonna look like over the course of the next eight years: ours start at 2021 through 2029, and you should try to figure out how to create housing at those affordability levels for that population, not just any housing for anybody, but here’s your who.’ And it’s a lot… Our projection for the eight-year period, this kind of state mandate, if you will, [the] average is about 2100 units of affordable housing, year that’s just for low and very low income families.

That’s a lot of housing. In the banner years, last year, 2021 and 2022, we were able to produce about 1200 units a year, which is amazing, right? So 1200 units a year of affordable housing, those were two banner years, which we could dig into if we want to, but again, it’s about, can we actually double the volume of affordable housing production just in one jurisdiction to meet not just an arbitrary number, but a ‘who.’ These are people, these are projected families. And I think, Chris, to your point is, if we fail, if we fail as an affordable housing sector of having the capacity, the money and the land, if we fail as political leaders in the city of Sacramento or wherever you wanna hail from, Oakland or Southern California, it’s not just we failing numbers, it’s not just we failing our political talking points. We fail people. That’s the issue, the people who need housing are failed.

In my last data point, it’s interesting, I kind of look at some city documents. Right now, the existing population of City of Sacramento, not just the projected future… 50% of the households in San Francisco are an extremely low, very low, or low income levels. And if you want me to get into those numbers, but just kind of imagine what that says to you. Half of the city’s population is already at a very low income level. So if we fail on reaching our projected needs for the future, we’re failing both folks today, and we’re failing folks in the future. And I think that’s what drives me to feel like we’re talking about real people and real households.

CN: And the state has changed its rules when it comes to these expectations. What are they doing differently now, and what kind of pressure does that put on the cities.

PC: Well, the one thing they do… So, these chunks of five to seven year projections happen in what they call ‘cycles,’ so we’re now in the sixth cycle. Well, they change the formula of how they do those projections, and out the back end of that came a much larger projection of that need. Part of it is to make up for the under production of housing and previous years, which makes sense, you just can’t clean the slate each time and somehow people just go somewhere like on the streets.

So part of it is to catch up so that a big bulked up number. But there’s also, if you will, accountability that now it comes with it. And this is me, I’m not sure I agree with the political culture, but the idea is if you can hammer harder with accountability for meeting those numbers, that somehow they’ll happen. Again, I’m back to money, land and capacity. It doesn’t happen just because you have a threat. But there is a lot of pressure on local governments to meet those numbers. And there’s a series of punishments, if you will, some funding can be taken away from state sources. Mark probably knows all the weeds on these things, but also it puts jurisdictions in a more or less competitive position to go after limited funding. So, it’s sort of a carrot and stick thing, but the accountability is there.

And last thing I’d say is, I know there’s a lot of talk about NIMBYism or local resistance. Again, it’s all over the map in the state. I’ve worked in a lot of different jurisdictions and talked to folks: there is not sort of one NIMBY culture out there, so whack-a-mole on NIMBY is not gonna necessarily change the outcome. Some jurisdictions, you gotta do a lot of work on your local constituency, you’ve gotta build up political leadership, like you Mayor and others. In other jurisdictions, you’ve got political leadership, you have a very supportive public culture, people are ready to throw down… You still need money, land and capacity.

Chris Nichols, Capital Public Radio. Photo by Scott Duncan, Capitol Weekly

CN: I want to jump back to the broader statewide perspective and Chione, your organization, along with the California Housing Partnership, has created a long-term vision called Roadmap Home 2030. Can you tell us what role can that play in addressing California’s affordable housing crisis and how will it overcome obstacles and resistance?

CF:  Yeah, so Roadmap Home 2030 was really the culmination, I think, of an evolving conversation happening in the housing community, where advocates and practitioners were really feeling like, maybe we’re making some incremental progress, but as a state, we’re not holding a big vision for how we actually solve this problem. We don’t have a clear path forward.

I come… I did a lot of work on climate early in my career, I helped pass the state’s first climate policy, and central to the state tackling climate change was the notion that the state would set a big vision for where we would go and then would actually plan how we’re gonna get there through a series of policies, regulations, etcetera, and we really have never had that in the housing space. So, we had the privilege of working with the California Housing Partnership and many and many partners from around California to step back and really ask the question, ‘What’s our vision?’ And where we landed is that we wanted to put forward a plan that would expand the supply of affordable housing, really to meet those needs that others have spoken about, that would end homelessness. That would protect renters, and that would address some of the deep racial and economic inequities that are felt in the housing space in communities across California.

“If you look at statewide polling and how Californians think about housing over the last five to 10 years, we’ve seen a radical shift in how people prioritize housing and homelessness. It is the number one and number two issues now for California voters.” – Chione Flegal

The plan culminated in 57 policy recommendations for the state, the punch line to the points many others have made is that our research partners really dug in to say like, ‘What are the costs, what are the benefits, where could we raise the revenue?’ Eighteen Billion dollars a year, that’s what the state of California needs to be spending, along with the adoption of these policies to really meet the scale of the need. And that’s a 10 year… ‘We’re gonna do this every year for 10 years,’ commitment, to get there.

We have, I would say, receive very enthusiastic support from folks across the housing sector and some really strong support from legislators, too. I think the Roadmap laid out a framework that helped people hold the notion that there is no so single silver bullet for this challenge that we need a whole bunch of different kinds of policies to be in play. And that we need a lot of different kind of actors to actually step into this, too. So, mayors, local government leaders, community advocates, tenant organizers, practitioners who are building housing, folks who are providing services, we actually all need to be pushing this plan together, and that is the work that we are now engaged in.

I would say that political will question continues to be one of the major tension points for us, combined with the reality of our state’s kind of fiscal conditions on the way they fluctuate year to year.. that those create real challenges for moving towards our vision. We’ve seen some pretty positive shifts as it relates to political will, similar to what the mayor has discussed in Alameda. If you look at statewide polling and how Californians think about housing over the last five to 10 years, we’ve seen a radical shift in how people prioritize housing and homelessness. It is the number one and number two issues now for California voters, that is what they care about. There’s still some distrust about whether or not government can do it, but when you ask people, should government do it? They say yes.

So we’ve seen pretty radical changes there. I would say we’ve also seen some pretty significant shifts in how Californians think about housing more broadly. So, when I was growing up, no one wanted to live in the city, they wanted to move to the suburbs, they wanted a different kind of experience, and the notion that multi-family dense housing is actually desirable is something that’s widely embraced in California in a way that it never was in the past. To Peter’s point, that’s not true in every community. But in many communities, there’s really a thirst for bringing in a more diverse collection of housing types to serve different kinds of families, different affordability, etcetera. So we’ve seen really significant growth in the political will. It has not yet translated to the way people take action in a consistent way, but I think that’s something that we’re really committed to continuing to support and know that is an important part of our work, the policy work will only be successful as we continue to push on that, too.

Mark Stivers of the California Housing Partnership and Chione Flegal of Housing California. Photo by Scott Duncan, Capitol Weekly.

CN: Mark, your organization is part of that plan as well… I wanna give you an opportunity to talk about it. I also… You have a background in the state Housing Department and Finance. I’m wondering if you can also address what the Governor presented this January? He presented a budget citing an estimated 22 billion shortfall. The state Department of Finance has said a recession could double or triple that shortfall. So I’m wondering, One) Please weigh in on the long-term vision that Chione talked about; and Two) How is this fiscal environment going to affect affordable housing in California?

MS: Thank you, Chris. Chione only mentioned that the Road Map lays out a needed investment of about 18 billion a year over each year for 10 years, and I know that number sounds really high. It sounds like a massive number… ‘Oh, it’s not achievable.’ But when you think about it and put that in perspective, that’s exactly what we spend… California spends on a higher education system every year without blinking an eye. It’s what we spend on our prison system every year without blinking an eye. And it’s not… obviously, it’s hard to say, ‘Well, where do you get that 18 billion?’ It’s gotta come from somewhere, it doesn’t grow on a tree, right? That’s the issue.

But to think that that level of investment is somehow not possible or not feasible, I think is a misnomer. And so we just need to figure out a way, ‘how do we get there?’ It’s not going to be overnight. This year is gonna be especially difficult. I think we are very mindful of the budget deficit. As we’ve had conversations with Governor’s office… Well, first of all, the governor has fulfilled all the commitments he made last year to put money into programs. It’s not at the scale we would like to see, we would love to see way more, but he has at least honored the commitments he made last year to put some additional money into affordable housing programs.

But in the conversations we’ve had with them, it’s like, we know it would be hard to do more, but we can’t just not do anything. Affordable housing and homelessness are the number one of two political issues. It is a very high priority for this governor, it’s a very high priority for this legislature, and so we’re just trying to balance what is possible with what we really need, and it’s a push and pull. We will continue to advocate, we’re hopeful to see what the May Revise looks like, but if the budget deficit does get bigger, it’s gonna be a challenge. We will hope to hold on to what the Governor has proposed in January, but ultimately, we all know, and I think the governor knows as well, that over time, we really do need to ramp up this investment and make it be a consistent, year-to-year kind of effort. Right now, everything has been one time.

PC: I’d love to riff off that, Chris…

CN: Well, let me just bring it back to the local level for one second, and then Peter, I’ll give you an opportunity, because, One) Mayor, I’m interested in your thoughts on this longer-term vision; but Two) The financial situation. How is your city preparing for a change in the state budget? How is that going to affect this ambitious plan that you’ve adopted? Is it going to stall things out?

MA:  Well, we were pretty fiscally conservative, so right now we’re pretty fiscally sound and we have a reserve. But there’s a reason you have rainy day funds – because rainy days come along. we… Cities don’t build housing, but we definitely rely on the federal funds and state funds, and I’m on the board of the League of California Cities Board of Directors, we have been asking over and over again for a sustained, dedicated funding stream. One-time funds… we’ll never say no to one-time funds, but that’s not enough.

And so I join that mantra, ‘Yes, we need to see what happens in the May Revise,’ …what the numbers will come in looking like. But housing has to be a priority, and you also need to look at the cost of housing the unsheltered, of dealing with all the issues that arise for people who are living unsheltered, of losing valuable resources like teachers and mental health workers and nurses that we dearly need because they can’t afford to live in the state. So I’m just gonna keep plugging along for the need to get the state to put in more.But again, I talked earlier about the possibility of doing public-private partnerships, everything has to be on the table. And we all need to be creative, but housing definitely needs to be at the top of the list for priority spending.

CN: Peter, I know you wanted to jump in there.

PC: So, maybe I can just kinda connect some dots with Marilyn and Mark. Those points you made, Mark about an 18 billion a year need for housing, which is a huge number, right? Just comparable to what we invest in education and our prison system. So setting aside our judgment on any of those things, the point is we can make big investments.

What it made me think about, Chris, is that they’re… What I find really interesting, and having been in the affordable housing, I would call it a movement, not just in industry for a long time, is if there’s a real growing effort to try to change the narrative around how we think of housing, particularly affordable housing. And putting it more in a sense, like we think of education, I guess, prisons, roads, transportation, as part of our social infrastructure.

And I have an actual anecdote of, this is in the city of San Francisco, a very kind of ‘woke’ place. Well, we actually tried to get in the capital budget, Housing identified as an infrastructure category. You think it’d be a no-brainer, right? It took us a whole year to kind of work through this idea with folks who are very traditionally thinking about housing is kind of living outside of it, it’s a kind of a commodity thing, right? We have a little subsidy on the side for the affordable piece, but to think of it as part of our core infrastructure of a city’s current and future landscape took a fair amount of work.

It doesn’t really trickle more dollars, but it starts to change the way we think about what we’re investing in and how long of a permanent kind of investment that is. And that’s now led, I think, in many respects, to the what’s called Social Housing conversation – which five years ago, and some folks remember – You say ‘social housing,’ and folks think you’re really freaky, like, ‘Oh, go back to Berkeley.’ Or ‘go to Vienna.’ But now a lot of folks are talking about it, and I think it reflects this idea that we need to see housing as a part of our social infrastructure, in a physical infrastructure. And what that implies is, there’s gotta be a lot of money for it, on the order of what you talked about in education system and I think that’s a good place to go. It’s sort of a North Star, we still have a lot of steps to get there. But I think we start to change the way we all collectively see what we’re trying to accomplish rather than just nibbling around and scraping for money in each budget cycle .Who knows, the next couple of terms may, or maybe we’ll have a very different kind of opening of the flood gates of money?

“What we’re doing today is miles ahead of [past investments], but as I mentioned, it’s gotten us to 20,000 units a year when we need 120,000 units a year.’ – Mark Stivers

CN: a lot of the discussion, it completely makes sense has been a forward-looking ‘how much is needed to solve this massive crisis that we have.’I do think sometimes it is also helpful just to step back a little bit just to see where we started or where we’ve been, Mark, I’m wondering, can you kinda give us a sense of what the state was spending on affordable housing? What it was doing, one decade ago, two decades ago, where have we come from?

MS: Early in my career, at one point, the Department of Housing and Community Development had a total general fund budget of 7 million dollars. It’s not to say that’s all the money they had. They had some federal funds coming through, they had some fee-supported programs, but it was incredibly modest. In 2000, the legislature for the first time put any significant money… general fund money… into affordable housing, it was the tune of 500 million dollars. The next year the dot com bubble burst and they clawed back about a fourth of that, and then we didn’t see general fund for a long time

“We are trying to catch up now for generational disinvestment in affordable housing.” – Chione Flegal

During most of my career, the way the state has engaged in affordable housing finance is through general obligation bonds. And every couple of years, a general obligation bond would go on the ballot… maybe it was, back in the early days, it was about a billion dollars. Maybe it was two. The last ones, there was two of them that were a combination of about 5 billion dollars, and that gave enough money for a couple of years with the programs. But then it would be many years that we had no funding before we put another bond on the ballot, and it was kind of this boom and bust cycle. The developers and even the Department of Housing had to staff up. The money was a little bit available and then we just went back down, we went back to very little housing production. And so that’s sort of the history of the state’s investment. And so what we’re doing today is miles ahead of that, but as I mentioned, it’s gotten us to 20,000 units a year when we need 120,000 units a year. So, we’re just not really at the scale that we need.

And again, it has been the one time we really need. Developers, it takes them two years to bring a project to fruition, and so you have to think about what a money is gonna be available two years from now, and when we’re doing things on a year to-year basis that is a very difficult calculation to make. You really have very little certainty that these projects are gonna be able to come to fruition. So anyway, that’s the dynamic that we’re working in, I think affordable housing has doubled or even tripled in the last couple of years, but we are still woefully behind the scale that we need to be there.

CF: Can I build on this, Chris? In this country, I think we hit our high water mark for investing in affordable housing, actually a few decades probably before I was born. Some sixty-plus years ago, and we are doing much better today to Mark’s point than we were a decade or two ago. But we are trying to catch up now for generational disinvestment in affordable housing, and the way we’ve really been thinking about it as an organization is that it can’t just all come from the general fund, although there are certainly opportunities to repurpose funding. But we know our existing revenue is supporting a lot of other things, the same people who live in our housing need, whether that’s education or social services or health care, etcetera. So, we are both looking to how do we commit more of the dollars we have, and how do we think about new revenue that we really need to bring online to fully meet the needs of our communities. And some of that is changes in how we generate revenue as a state. Some of it is changes in how local government are really empowered to generate revenue.

The Road Map – I don’t wanna sound like a broken wheel, I keep coming back to the Road Map – but the Road Map lays out a set of policies that are really aimed at raising 23 billion dollars a year of new revenue that could be applied to meet our current housing and future housing needs. And that is one of the most politically challenging conversations, because it certainly touches people differently depending on where they sit in their socioeconomic status and their assets, and their business affiliations, etcetera. So, politically, probably one of the hardest fights we have in front of us, and also super crucial to our long-term success.

CN: I think we have time for maybe one more topic where everybody can weigh in before we jump to some audience questions… I’d like to hear everybody’s thoughts on this, the City of Sacramento, cities across California, they’re grappling with gentrification and displacement pressures. These are pressures that destabilize low income and working class neighborhoods, many of which are communities of color. This has forced the affordable housing sector to get more creative with his housing solutions. I’d like to hear about these pressures and how the industry is adapting.

PC: I’m happy to… happy to kick that off. And I love that you’re from the Mayor of Alameda because it’s a very different scale, and I think we see different things, but… It’s an excellent point, Chris. And I’ve been in this for a bit, and if I went back, sort of if you will, to earlier part of my career as a policy advocate. It was mostly about how to get more money, land capacity to build more housing units, because we’re structurally short. Whether it’s half the way or a sixth, as Mark said. But I think a lot of us in the last 10 years or so, I’ve realized that we’re not gonna really build our way out of housing affordability crisis, because as much as it is about supply, it’s also about displacement. And we’re sort of moving people around based on their economic kind of status. And as I said earlier, 50% of the city of Sacramento population is already an extremely low, very low, or low income level, and that makes them, in our vocabulary, at risk, of being pressured out of their neighborhoods, pressured out of their homes, pressured out of their cities.

This is happening all over, there’s a lot of literature about it. And it’s also been written about in the mainstream press, so it’s not a surprise. The question is, what do we do about it? And so what’s happened, I think the affordable housing sector has been very innovative with some new tools, that don’t get as much money and attention. But a lot of it has to do with how do we actually acquire existing housing where there might be at-risk households or communities and get it out of the speculation market, make it permanently affordable? How do we actually get ahead of the land speculation market and buy land? And even what they call ‘bank it,’ set it aside. Because we don’t have all the money they build on it today, and you wanna build on it the next two, three, 10 years. This is what real estate speculators do all the time. They’re constantly purchasing land and they sit on it for a decade.

Another part of it is, how do we actually help folks who are wanting to or ready to move from a rental situation into first-time home ownership? It’s a lot harder to do than we think, so thinking creatively about how to change folks’ tenure, as they call it, that’s the magic word, tenure. How do you go from rental to ownership, are there more creative models than just sending people out to try to buy a house in a million dollar market, co-ops, land trusts.

And then lastly, I think the innovations we’ve found are types of money. There’s a whole public banking, municipal banking movement, that’s happening to try to unlock more sources of money for these programs than our traditional kind of financing and organizations to do that. There’s a whole cottage industry, I’d call it, of land trust across the state that have now actually form into a whole network, the California Community Land Trust [Network], and they’re paving the way to doing some of these newer… I’d call them anti-displacement housing interventions, as well as the new construction. So this is a compliment to our core industry, and I think it’s… again, we’ve still got a crisis on our hands, Chris, of displacement. But I think it’s a recognition that we have to have a lot more tools of intervention.

CN: Mayor, I’d like hear you jump in on this issue of gentrification and displacement, how is that playing out in your city?

MA: Yeah, so in Alameda, the Navy base that I talked about. It was pretty blighted when we came in. In 1996, we learned that we were on the base closure list. In 1997, the conveyance started and we’ve accepted most of the property from the Navy. We accept property as it is cleaned up to the standards that we require, but. So people weren’t being displaced ’cause the Navy had long since left there, but in our neighborhood, some of our older neighborhoods, we do have a historic preservation ordinance that would keep someone from coming in and tearing down the house. They would have to go through a lot of hoops to show the justification. So we don’t so much see that is happening, but I’m intrigued by what Peter was talking about, because one of the things I think is really important, and it was touched on by the previous panel, is, of course, we want to create rental units for people, but we also want to create for-sale opportunities, especially for lower income individuals and families. Because that is how you build the generational wealth, it’s the single strongest way to do that.

“The other thing that Alameda does, whenever a developer comes in and wants to build new housing, if you’re building out at our former naval Air Station, 25% of the units you build must be affordable, and if you’re building on the main island, 15% must be affordable. And so every city can do that.” –Marilyn Ezzy Ashcraft

There is a great model that doesn’t exist in California yet, operative word being, ‘yet.’ But for all you smart people listening, there’s a company called Divvy Homes, and there’s probably others like it. It’s D-I-V-V-Y… It is based in Atlanta. It operates in a number of different states. None of them California, but I recently appointed someone to one of my boards and commissions, and he works for this company and told me about it. And I looked them up, what they do is they buy up homes. Now in Atlanta where they’re based… They might be able to buy up a subdivision and they will become the landlord, and you as a low income renter can rent, and if you choose to, you can pay a little extra into an escrow account, you might choose to just continue being a renter, but if you wanna become an owner, at some point, you’re able to do that. And there’s a way you transition, but part of your rent and this escrow account is going toward doing that.

And so I would love to see a pilot program in this state.. land trusts are a great idea. When I asked this appointee, ‘Well, could we do it in California?’ He said, ‘the cost of real estate, the cost of labor.’  All the things we’ve heard about. But yesterday, I mentioned that I was at the ceremonial signing for this existing apartment building that is now gonna be dedicated affordable for 55 years. And the developer, the affordable housing developers were telling me that they were fighting to outbid these speculators who wanted to do exactly that to buy this up, just make it market rent, market rate rentals.

And so that’s why private money like the Chan Zuckerberg Initiative helped them to be able to offer a competitive price. So I think we all need to get creative, I think we need to try some of these projects out as pilots and see what might work, but it’s just it would be wonderful to get more of those projects going. Because when you own a home, it’s not to say there aren’t other expenses and things, but you have that housing security.

And then the other thing that Alameda does, whenever a developer comes in and wants to build new housing, if you’re building out at our former naval Air Station, 25% of the units you build must be affordable, and if you’re building on the main island, 15% must be affordable. And so every city can do that. And we’re building… We’re building these developments, we’ve been doing it since the navy base closed in the late ‘90s. So that’s something else that just guarantees you’re gonna be creating affordable units.

CN: Tim, did we have some audience questions or?

Panel 2, A Conference on Housing. Photo by Scott Duncan

TIM FOSTER, CAPITOL WEEKLY: So I’m not sure if this [microphone] is on yet… I’m not sure if we have any in the room, but we did get a really interesting question off of our remote viewers, and so I’ll ask it on their behalf. Apparently there is a move to repeal, I believe it’s Article 34, which relates to affordable housing in the state – building public housing and the ability to do that. Can the panel address whether or not that’s realistically going to happen, and that might actually make it on to the ballot and get repealed? And if so, what does that Article do, and what would it do to get rid of it?

MS: Article 34 of the Constitution was passed in the ‘50s as a backlash to public housing in people’s neighborhoods. It was sort of a classic NIMBY attack and essentially requires that for any housing that is more than 50% affordable, voters have to approve the project. And it’s not a project-by-project. Generally, what happens… in Sacramento here, we voted last election and we authorized 10,000 US for affordable housing, so we vote on it sort of in mass, but in many local communities, that’s a very difficult vote to get no matter how you have. No matter how you do it. In the affordable housing world, it causes a lot of issues, sometimes we can work around them, but it disrupts the ability to do affordable housing.

Senator Allen introduced Constitutional Amendment 2 last year, it is now, that repealing Article 34 is on the ballot, proposed for March of 2024. It’s a bit of a tricky ballot initiative because I think while everyone understands it doesn’t… That concept of just being able to say ‘no’ to affordable housing isn’t really legitimate, you’re asking people to give up the right to vote on something. And that doesn’t always pull super well. So, we’ll see how that campaign shifts.

There is also a bill this year in the legislature, SB469, also by Senator Allen that would statutorily make the system a lot easier, and so we are working on that with the California Rural Legal Assistance Foundation. This gets very wonky and technical, but I think we are working on ways to either repeal it and work around it. It’s not the end of the world, but it has been a big barrier. It has been a barrier to doing affordable housing. Absolutely.

TF: And then do we have any questions in the room?…

PC: Oh yeah, we gotta fix it and get it out books, but also what a lot of folks to talk about it just, it just kind of reflects a really dark kind of era in our California sentiment about affordable housing. And we just, it’s like redlining and other things that now seem to be like, ‘How can we have possibly gone there?’ I think for a lot of us, it’s both a technical fix, but it’s also that we wanna put to rest what seems like kind of a dark spot on kind of California’s understanding of taking care of folks through your housing. So there’s both a narrative side to it, as well as a technical.

CF: [Garbled] policy… At the time that it passed, it passed it as public housing was becoming a public benefit that was seen as largely serving African Americans. And it was a backlash to the public investing in African-American communities. And I’m gonna go back just a minute to some of the gentrification questions… There is a lot of data that says a lot of different things about gentrification, but at a very fundamental point, I think we know that solving it is a two-sided equation. That there is a side both about thinking about how we invest in communities that actually reflects… in ways that reflect the communities that live there.

So how do you go into my neighborhood, which is a historically Black neighborhood in Oakland, and bring in new community-serving institutions, infrastructure, schools, etcetera, that are designed… that are by design – to serve the people there? That aren’t looking to like, ‘Oh, who’s coming next, that we can be set up to serve those folks?’ So that piece is really important thinking about how you actually invest in a way that reflects your values around who you’re trying to serve. The second is really the multi-faceted housing supports that you need, so you do need new affordable housing. You also need strategies to make sure that to the Mayor’s point, that the speculative forces that come into communities is public opinions change as real estate changes, etcetera, that those speculative forces are counterbalanced by public, intentional public investments in affordable housing, in strong protections for renters and for people who are already unstable in the housing market.

We’re working on a policy with many of our partners right now that would actually establish a fund at the state level to buy up naturally-occurring affordable housing. So, housing that exists in the neighborhood that people are already living in, that we don’t have to build, but we can protect it now. We can put money into that, purchase it and say It’s gonna be affordable forever. We’re keeping it affordable forever. So, it’s a whole suite of strategies that really need to come together with the end goal of serving people who live in that neighborhood. And, yes, neighborhood change will always happen, it will happen over time, but we need to put more intention into counter-balancing, again, those speculative pressures that are driving towards a particular kind of person, that looks a certain way, that spends money in a certain way, that favors to them right now. That is what our development pattern is set up to favor upper class white people, and that is then reflected in how communities grow and develop.

AUDIENCE QUESTION: Thank you. [I’m] Keith Dunn, I represent the 25 Self-Help counties that pass sales tax initiatives to build infrastructure, Alameda County being one of them. I wanna just kind of change the discussion a little bit from the housing infrastructure to more holistic approach to building communities, and that includes transportation. We’re seeing increasingly the legislature weighing in on infrastructure that serves new housing, making requirements and encouraging TOD but not really allowing the types of incentives and always encourage those areas to be built.

For the Mayor, as we go and we look at building out transportation plans, those are often 30 years in the making, not just because they’re very expensive, but also because of the transition that you need to do with communities that are evolving. So I guess my question to you is, how can we better plan a holistic approach to a community that includes transportation? Whether it’s rail, walking, I think there needs to be a holistic approach, but people still need to be able to get to the grocery store in a car. And if there’s rail that’s available, make that accessible. And I think that’s the challenge that I’m seeing in the legislature, in addition to all of the issues on just building the housing. It’s also how do you build around it to create a mobility that encourages either people to work and live where they are, with WiFi and all the different acumens. But sometimes people have to get into the city from Oakland to go work downtown, at least a few people still do. So, I’m just interested in your thoughts. I think that’s gonna be a challenge that we’re gonna continue to see.

MA: Sure, and I’m gonna talk really fast, because speaking of transit, I have to be on the 11:55 train back to Oakland. I have the pleasure of this afternoon of introducing an art exhibit of the Gee’s Bend Quilters from Gee’s Bend, Alabama, if any of you know about them. Look them up if you don’t, they’re pretty awesome though. With African-American women and some men. But anyway, so in Alameda, what we have for a long time required of our developers, when you come in to develop, you must also provide for transit passes for all the residents or all the employees. Whether it’s a commercial development or residential. Right now that transit passes for AC Transit, our best system, it’s great. At some point as we get more built out, I want it to be more… I [garbled] to a Clipper card ’cause we’re an island, we have three ferry terminals, and you should be able to use, ride on BART, Amtrak whatever.

And so that is making a difference because our Planning Director told me recently that we get statistics from the DMV about the number of automobile registrations in our city. So from the period from 2017 to 2022, in that period, we built hundreds of new units of housing. And some of it multi-family, most of multi-family, in fact. In that same time period, the number of automobile registrations in Alameda dropped by about 4900.

And so now what came along during that time, you might remember a pandemic and people were here… We’re still in it, by the way… the people who are working from home, they were telecommuting and at that time. Again, when I walked through the door in the campaign, it’s like doing a poll, people realize they don’t need to be a two-car household. Some of them realized they don’t need to be a one-car household. And by the way, in my city, you will see bikes left and right, sometimes the mayor riding or bike to city hall. We’ve put in bike tracks and cycle tracks and the infrastructure that supports basically, we’re flat… We’re an island, sea level rise, greenhouse gas emissions are literally an existential threat to us. So we’ve had to educate our residents, but they get it too. They are smart. But you need to provide those alternative methods for getting around. What people told me was… “Yeah, Mayor, we got rid of our second car. We got rid of our first car. On the weekend, we don’t even take the one car we have out. We do all of our errands on bicycles, we’ll get a car share if we need to.” So, it is possible, but you have to require that up front of the developers.

TF: I think we’re actually at our time, and I know Mayor, you have to actually speaking of trans and you have catch a train. So, thank you everyone, thank you to our panelists. Thank you to Chris Nichols of Capital Public Radio for moderating this.

Support for Capitol Weekly’s Conference on Housing was provided by The Tribal Alliance of Sovereign Indian Nations, The Western States Petroleum Association, KP Public Affairs, Perry Communications, Capitol Advocacy, The Weideman Group, Lucas Public Affairs and California Professional Firefighters