CA Housing Crisis

Can Public Agency Land Use Help Save Us from the State Housing Crisis?

Along with being well known for its near perfect weather and plethora of offerings for tourists, California has now also become known for facing one of the worst housing crises in the nation.  A study done in 2016 by the McKinsey Global Institute found that California was ranked 49th out of all 50 states in housing units per capita and losing close to $140 billion per year due to the shortage of housing.  Based on California’s HCD Annual Progress Report data compiled in early 2018, more than 97% of the state’s jurisdictions are failing to meet the goals for developing affordable housing.  This harsh reality has left the state to ponder what resolutions could be utilized for tackling this dire dilemma.

Some recent proposed solutions to the housing crisis have come in the form of the 2017 Legislative Housing package signed into effect by Governor Jerry Brown in September of last year which includes 15 bills aimed at addressing the housing crisis.  However, with the housing crisis being as wide spread and serious as it is, it will likely require solutions in addition to recently passed legislature.  Circulate San Diego recently released a report examining the conversion of the underutilized Metropolitan Transit System parking lots into affordable housing as a solution to the state’s housing crisis.  Their report identified that this plan would not only generate up to 8,000 new homes with 3,000 of those designated for low income use, but the plan also aligns with similar policies and practices already in use by fellow transit agencies like the LA County MTA, Bay Area Rapid Transit and Santa Clara Valley Transportation Authority.

The report from Circulate San Diego begs the question: Could an answer to the state housing crisis lie in the use of other under used public agency land too?  In addition to transit systems, other public agency properties including school districts, utility districts and water districts, may provide some respite in the struggle to reign in the housing crisis.  This possible solution does not come without it’s fair share of challenges which may include the need to enhance or remove the existing infrastructure, zoning restrictions and community engagement of the surrounding area which for low income and affordable housing specific development may give way to objections from those with the “not in my backyard” perspective.  Despite the possible challenges that may lie ahead with the use of public agency land for housing development, state officials may find this a solution worth considering in the struggle to resolve the state housing crisis.

Growing Number of San Diego County Households Paying More Than 30% of Income on Housing Expenditures

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As the California housing market continues to suppress any effects of the subprime mortgage crises, housing expenditures have swelled to levels that are considered not affordable for an alarming number of citizens. Counties such as San Francisco, San Jose, Los Angeles, Orange, and San Diego are among the least affordable markets with more and more households spending well beyond 30% of their income to keep a roof over their heads.

In San Diego County, 47% of all occupied units are spending more than 30% of its income on housing expenditures according to the U.S. Census Bureau, American Community Survey 5-Year Estimates. That number is even higher for renter-occupied units at 57%, with five cities throughout the County over 60%. Vista (44% owner, 65% renter), San Marcos (47% owner, 63% renter), and Escondido (41% renter, 64% renter) each rank among the Top 5 least affordable cities for owner- and renter-occupied units compared to Poway (31% owner, 52% renter) and Solana Beach (32% owner, 51% renter) which are among the most affordable in both categories. The City of San Diego is among the average at 36% owner-occupied and 54% renter-occupied units spending more than 30%.

The growing concern for housing affordability in San Diego County has become a wide-spread issue that is no longer isolated to the less affluent communities. The need for local governments to assess their current housing stock is among the first steps toward finding a solution that is right for its residents.    

CALIFORNIA LEGISLATURE PASSES BILLS DESIGNED TO COMBAT AFFORDABLE HOUSING CRISIS

More than a dozen bills designed to help communities in California combat an affordable housing crisis were approved by the California Legislature on Friday, September 15, 2017 and sent to the Governor for his approval.  This past year marks the Legislature’s “Year of Housing,” wherein more than one hundred housing proposals were introduced and debated in order to provide for assistance in funding for affordable housing development, streamlining local government approval of housing projects, restoring authority to impose inclusionary housing requirements on private housing developers, and creating more state-wide Anti-NIMBY laws.  Governor Brown is expected to sign at least three major bills in the package:  SB 2, SB 3 and SB 35.

SB 2, by Sen. Toni Atkins, D-San Diego, would provide for a “permanent source” of funds for affordable housing development through the creation of a $75 fee on most recorded documents (except for home sales).  This fee is expected to generate $200-300 million per year that can be used for affordable housing development.  Half of the funds generated in 2018 would be made available to local governments for updating planning documents and zoning ordinances in order to streamline housing production, and the other half would go to the state for homeless assistance programs.  Beginning in 2019, 70% of the funds would be directly allocated to local governments for a variety of affordable housing programs, and the other 30% would be used by the state for mixed income multifamily housing, farmworker housing and other programs.

SB 3, by Sen. Jim Beall, D-Campbell, would place a $4 billion statewide housing bond on the November 2018 state ballot, with bond proceeds to be used to fund a number of existing housing programs:  $1.5 billion of the funds would go to the state’s Multifamily Housing Program for affordable housing development loans, $1 billion of the funds would go to the state’s CalVet veteran’s home loan program, with the remainder of the funds allocated for the CalHome down payment, farmworker housing, transit-oriented development, mortgage assistance programs and infrastructure supporting infill housing. 

SB 35, by Sen. Scott Wiener, D-San Francisco, creates a streamlined approval process for housing developments in communities that have not approved enough housing to keep up with regional fair share housing goals.  Eligible projects do not need to obtain conditional use permits and can take advantage of lower state-mandated parking standards.  To take advantage of this process, the proposed development must be on an urban infill site, the development must not be in the coastal zone, agricultural land or other sensitive areas.  Furthermore, the developer taking advantage of this streamlined process (an optional right for the developer) must pay prevailing wages and, in some cases, certify that it will use a “skilled and trained workforce” to complete the project.  Critics of SB 35 believe that it will impose extraordinary costs on affordable housing construction, thus hindering the legislature’s ultimate goal.

Governor Jerry Brown has until October 15, 2017 to sign or veto these bills.  Do you think these bills will adequately fix housing issues in your local community?  What are your local communities doing to address these issues, and how do these actions align or conflict with these proposed bills?  We would love to hear your thoughts.  Please share them with tmatthews@webrsg.com.

This blog was Co-Authored by Millay Kogan, RSG Analyst and Tara Matthews, RSG Partner

Proposed Affordable Housing Bills

The affordable housing crisis in California is a well-known fact and over 130 bills have been proposed by State lawmakers to address and hopefully improve one of the State’s most urgent needs.  The link below to a recent Los Angeles Times article provides a brief and basic summary of all proposed bills:
http://www.latimes.com/politics/la-pol-sac-housing-bills-taxes-affordable-20170319-story.html