State Funding for Affordable Housing

State Funding for Affordable Housing

Posted on April 24, 2017

By Tom Collishaw, CEO of Self-Help Enterprises

As progressive as the State of California purports to be, there is at least one crisis that they have failed to respond to in recent years – the housing crisis.

The numbers are stunning….and pervasive. The majority of California households (over 3 million) are overpaying for housing, which is more than 30% of their income. More striking is the fact that 1.5 million mostly low-income California households are paying more than half of their income for housing! Add to this the fact that almost 1 in 4 of the nation’s homeless population are Californians, and it is clear that using the term “crisis” is no exaggeration.

We’ve all heard of studio apartments in San Francisco renting for over $3,000, or couches being sublet in Silicon Valley. The temptation is to view this as an urban problem in areas with hyper economic growth. The fact is that a $1,000 apartment rent in Fresno is just as problematic for a family earning only $2,000 per month, which is a relatively common local wage of about $12 per hour.

The problem is exacerbated by the inexorable laws of supply and demand. Experts agree that to keep pace, California must produce 180,000 new units of housing each year, when we only produced 80,000 last year. The supply gap has been building for many years.

The lack of available affordable housing has a myriad of social and economic implications. Dwellings become overcrowded, adult children stay in parents’ homes, the homeless population grows, and people who have housing have less money to spend on other parts of the economy. In a word, the trend is unsustainable.

And, in almost all near-term scenarios, the federal government is likely to scale back, possibly drastically, their funding for housing production.

So what has the state done in recent years? Pretty much nothing. Oh, there have been well intentioned attempts by some legislators to create new funding streams for affordable housing, or ease regulatory burdens on the creation of new units. Most have been derailed by powerful special interest groups or the governor’s veto pen. It has been 10 years since the state has made a significant new investment in affordable housing – Prop 1C that was passed as part of Governor Schwarzenegger’s infrastructure bond package. Those funds are gone.

There are actually more proposed bills in the state legislature this year than ever before that deal with some aspect of the housing crisis, several of which would provide funding for new units.

It’s time to step up, California legislators. And then it will be time for the Governor to acknowledge the problem by supporting any effort to address the crisis.