On October 2nd, members of the Senate Transportation and Housing Committee and the Governance and Finance Committee convened for a joint informational hearing to address California’s housing and homelessness crisis. The hearing, titled “Housing Working Families: How Do We Pay For It?” was the first of two informational hearings meant to highlight problems and identify solutions. This hearing was primarily focused on the mechanisms currently in place to fund affordable housing throughout the state. Whereas the second hearing, on November 16th in Long Beach will focus on barriers to building, zoning, and land use policies at the local level. Attached you will find all the documents produced by the various speakers and below is a summary of the most relevant information from the panelists.
Matt Schwartz, President and CEO California Housing Partnership Corporation spoke first. His presentation focused primarily on challenges to funding affordable housing since the demise of Redevelopment. He answered questions from Senators Beall and McGuire regarding the amount of money redevelopment agencies distributed, roughly 1 billion a year, but was unable to give an exact answer about the number of units built when redevelopment agencies were fully functional. This appears to be a major concern for Senator Beall as he mentioned it a few times during the hearing and should be something we take note of. Mr. Schwartz noted that California lags behind other states due to delayed enactment and utilization of a housing trust fund. While he applauded the efforts of last year’s housing package, he noted that California still has significant work to do to address this problem and recommended a marshal plan, consisting of the following:
- Create new tax increment financing to fund affordable housing and start at 1 billion/year
- Expand state’s low income housing tax credit
- Lower voter threshold for Affordable Housing and Related Infrastructure to 55% as was done for education facilities in 2000 so that local communities can make their own decision on raising funding
- Look at regional funding as part of the solution:
- Affordable housing is difficult to get approved at local level, which we all know too well to be true so why not set it up as a regional framework
- If transportation is set up regionally, why don’t we do the same for housing
- Look to organizations like CASA – Committee to House the Bay Area, which has made it their priority to view housing as a regional issue, which has offered a broader range of perspectives and solutions
Lisa Bates, Deputy Director Financial Assistance at the California Department of Housing and Community Development spoke to the various programs provided by the Department to fund affordable housing. She noted that since the budget passed, over 1 billion in state funding will be available to fund programs. She also commented on the newly released SB 35 guidelines, published on their website last Friday to guide developers and housing organizations through the SB 35 streamlining process.
Larry Flood, Director of Financing and Interim Director for Multifamily Programs, California Housing Finance Agency spoke about the increased popularity of ADUs due to recent legislation. He spoke about the innovate statewide public/private pilot program with Self Help Enterprises to fund ADUs. The Department is currently working to finalize terms with Self-Help and will be releasing more information soon.
Panel 2 focused on local housing financing and the tools local governments are currently and then also should be using to fund homelessness programs at the local level. Emily Halcon, Homeless Services Coordinator, City of Sacramento; Jim Mather, Chief Lending Officer, Housing Trust Silicon Valley; Aaron Laurel, City Manager, City of West Sacramento all spoke about what their local jurisdictions are doing primarily to target homelessness and wrap around services to help those on the brink of homelessness. Michael Coleman, Fiscal Policy Advisor, League of California Cities spoke to the need to build capacity around any type of Redevelopment 2.0 or EIFD. He recommended giving the state more discretion in the next version of redevelopment in order to avoid repeating problems of the past.
The last panel included, Nick Cammarota, General Counsel, California Building Industry Association spoke to issues related to building and construction. He noted that last year, 115,000 residential housing permits issued, which includes single family, owner occupied, rental, and multifamily units. He also suggested that there has been a trend, over the last 50 years of lower highs and lower lows of these permits issued which is an indication of an unhealthy market. Need to increase supply of housing, both affordable and market rate to help alleviate the crisis. Holly Wunder Stiles, Director of Housing Development, Mutual Housing California discussed the financing challenges and hurdles many developers, both affordable and market rate, currently face. This includes needing to find multiple sources of funding, with strict eligibility requirements, to completely finance a project making it much more complicated for developers. Lastly, Anya Lawler, Policy Advocate from the Western Center on Law and Poverty spoke about the benefits of value capture and its effect as an indirect subsidy to create affordable housing, using measure JJJ as a successful example. She further noted the importance of increasing supply of market rate housing coupled with other policies to help those in low-income communities. In answering a question from Senator Beall regarding building more housing with inclusionary zoning built-in, Anya noted the state v. local debate that took place during SB 827 discussions and that those would continue to be conversations moving forward. She also mentioned that state intervention in some areas, specifically related to density, was necessary to get local governments to increase density. Her recommendation is to look at the various geographies and demographics when considering value capture to ensure that it’s appropriate in that community.