With housing costs continuing to soar, California leaders are stressing that increasing the supply of affordable homes is Priority No. 1 for building a stronger economy and housing the workforce. Bringing rents and mortgages within reach of working families is critical to maintaining California’s business competitiveness.
While affordable housing organizations throughout California, such as Peoples’ Self-Help Housing, have been working overtime in an attempt to meet this critical need, state funding we have relied on has continued to dry up. As the head of the largest nonprofit affordable housing developer on the Central Coast, I want to make the community aware of important statistics, as well as state legislation under consideration that promises to provide significant and sustainable financial resources for the development of much-needed affordable housing.
Since 1970, PSHH has worked to bring safe, affordable housing to the Central Coast, where housing rental prices outpace the state average by 50 percent or more. California’s severe housing shortage has driven the state’s poverty rates to the highest in the nation.
According to a report released this year by the National Low Income Housing Coalition, a San Luis Obispo County resident would hypothetically need to work 1.9 full-time jobs at the county’s average renter wage in order to afford a two-bedroom unit priced at fair market rent; a Santa Barbara County resident, 1.8 jobs; and a Ventura County resident, 1.9. The California state average is 1.4.
Another survey, conducted by the Economic Vitality Corp., was taken by 354 employees and 154 employers in SLO County between October 2011 and January 2012. It found 88 percent of employees and 83 percent of employers said finding affordable housing suitable to their needs was “somewhat difficult” to “very difficult.” Additionally, 80 percent of employees said they were limited in their housing options, and 26 percent of employees felt they had little to no choice in their housing situation.
The situation is only being exasperated now that state housing bonds (Propositions 46 and 1C) that supported development by PSHH and other affordable housing organizations have been exhausted. Redevelopment agency funds have been completely eliminated, leaving the availability of state dollars that leverage private investment and federal and local funds at a historic low.
Just since 2007, funding for the development and preservation of affordable homes has plummeted 79 percent, from more than $1.7 billion annually to nearly nothing. This critically threatens housing production and the jobs that go with it. Failure to act now will leave too many Californians without an affordable place to live and make it incredibly challenging, if not impossible, for thousands of California businesses to remain competitive.
I want to focus on two housing-finance bills that will kick-start California building again to create jobs and make safe, affordable homes available to Californians struggling to make ends meet: AB 1335, introduced by state Assembly Speaker Toni Atkins; and AB 35, introduced by Assemblyman David Chiu.
These bills would create a diversified set of housing development funding for affordable homes; help businesses attract and retain the talent that fuels California’s economy; reduce homelessness, resulting in significant savings to taxpayers and reducing strain on our health and criminal justice systems; generate an estimated 29,000 jobs for every $500 million investment in affordable homes; and deploy these dollars in California communities through a successful private/public partnership model.
Specifically, AB 35 — which has passed the Assembly, is being heard next by the Senate Appropriations Committee, and would then go to the Senate floor for a vote — would expand the state’s Low-Income Housing Tax Credit by $300 million annually. Expansion of the state tax credit will have two positive effects: Developers will not only have access to more funding for building developments where the rents remain affordable, but they will also be able to leverage additional federal funds (a total of $600 million annually).
AB 1335 would create an ongoing, predictable source of funding (one of up to a dozen or more that affordable developers must cobble together for each development) to fund the state housing trust fund. For every $500 million generated , 29,000 well-paying jobs would be created.
Local leaders need to jump-start construction on shovel-ready affordable developments. Construction on thousands of shovel-ready affordable homes can’t move forward without state investment that developers can combine with local, federal and private financing in order to make affordable housing development financially feasible.
I hope that you, along with the Peoples’ Self-Help Housing staff and board of directors, will endorse and support these two important state bills that will bring more affordable housing to our communities. Contact your local representatives and let them know that affordable housing plays a critical role in creating and maintaining the health and viability of our communities.