Jobs-Housing Balance

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

Jobs-Housing Balance: What Does It Mean?

 

The phrase "jobs-housing balance" is sometimes thrown around as a concern for cities. But what exactly does it entail? The answer to that depends on the applied perspective. 

From an affordable housing viewpoint, the balance is about ensuring that housing in a community is affordable to people who work in that community, including some of the most important members of the public workforce: e.g., teachers, police officers, and firefighters. This idea is often called workforce housing. The levels of affordability for workforce housing can be higher than other forms of affordable housing because the benefit is intended for families with employed adults earning mid-level wages, rather than retired seniors or low-wage workers. RSG's work in the affordable housing realm covers different aspects, including financing, monitoring, and residual receipts analysis. 

In a fiscal impact analysis, the jobs-housing balance is a consideration instead of a concern. Different cities provide different levels of service to their residents and businesses, so the fiscal impact of a new development should rely on current levels of expenditures. To ensure that neither residents nor workers are overweighted, they can be converted to a common element, typically described as "full-time equivalent residents." The RSG team is currently performing a fiscal impact analysis for a proposed development in a city with a significant amount of commercial land uses and is incorporating this approach to estimate the fiscal impact of the development most accurately and fairly. 

From the perspective of enhancing the business environment, the jobs-housing balance refers to the match between the skills available among the existing local workforce and the requirements of local employers. RSG is currently preparing an economic development strategy for a city, and our initial research suggests a mismatch between the city's residents' skill levels and the needs of the types of businesses that are most prevalent in the city. The residents generally don't have advanced degrees or specialized training, yet the city is strong in professional, administrative, and advanced manufacturing employment, which often require higher skill levels. The city wants, as it should, to retain and attract more of these types of businesses. But it doesn't want, as it shouldn't, to displace or alienate its residents. Potential solutions include working with local colleges and business networks to enable current residents to achieve higher levels of education and skills training, investing to retain businesses that employ local residents, and coordinating with transit providers to improve transit service for residents working outside of city limits. These are just some possible pieces of the solution puzzle, which will be fit together with other pieces through further research and communication with the city's leaders and other stakeholders to understand their goals and sensitivities more thoroughly. 

Jobs and housing are basic components of economic development. The existing or desired balance between these two components means different things, depending on the framework in which they are discussed. RSG is familiar with many of these frameworks and can help cities and developers to better understand, explain, and act upon the jobs-housing balance as it applies to their situation. 

 

Written by Dima Galkin who is a Senior Analyst at RSG.