SACRAMENTO — As home prices and rents soar to unthinkable levels, California lawmakers are working furiously to drum up the votes for a package of bills they hope will help contain the spiraling affordable housing crisis.
With less than two weeks left in the legislative session — as lawmakers scramble to pass hundreds of bills dealing with everything from prescription drug prices to immigration enforcement — a vote on the housing package is coming down to the wire. But as of Tuesday afternoon, the only bill that would create a permanent funding source for affordable housing, Senate Bill 2, was still short of the votes it needs to pass.
“Every member of the Legislature knows that we’re in the midst of the most intense housing crisis that California has experienced in our state’s history and that we have to act,” Assemblyman David Chiu, D-San Francisco, said Tuesday. “Hopefully in the coming days we’ll be able to take these up for a vote, but these things often take a bit longer than we expect.”
While the package of housing bills being negotiated with the governor’s office has yet to be announced, Gov. Jerry Brown has signed off on two bills that could raise billions of dollars for affordable housing: Senate Bill 2, carried by Sen. Toni Atkins, D-San Diego, which would set new fees on certain real-estate transactions, and Senate Bill 3, a $4 billion bond measure by Sen. Jim Beall, D-Campbell. Brown has also agreed to sign at least one proposal that lawmakers say would address the state’s housing shortage by making the construction of new homes faster and cheaper — and harder for growth-averse cities to block.
In the nine-county Bay Area, homes are in such short supply that the median price for a single-family home has topped $800,000. And nearly one-third of renters statewide — 1.5 million households — spend more than half their income on rent, according to state estimates. The alarming trend has caused evictions and homeless encampments to proliferate in cities like Oakland. And runaway housing costs have put unprecedented pressure on middle-income residents as well. One-third of Bay Area residents surveyed last year by the Bay Area Council, a business group, said they wanted to leave the high-cost region. And year after year, businesses surveyed by the Silicon Valley Leadership Group cite housing as their top challenge.
“If we don’t get started in a serious way,” Atkins said, “we will have more than a crisis on our hands. We will have a humanitarian crisis of proportions you have never seen.”
Lawmakers such as Atkins and Chiu have been trying for years to address the crisis from Sacramento. Each year, as the problem deepened, Chiu said, “I’m told, `Next year we’re going to do housing.’”
Negotiations have been under way for more than a month between legislative leaders and the governor, who in the past have clashed over the issue. Brown has pushed lawmakers to cut red tape to make construction cheaper, while Chiu and others have said that the state must invest in building subsidized, as well as market-rate, housing.
The powerful California organization that represents construction unions, the State Building Trades Council, is backing the package of bills, arguing that it will create jobs as well as places for families to live. Late last month, roughly 100 representatives of local unions around the state converged in Sacramento for “lobby day” as the bills’ authors finalized the bills. The group held a joint news conference with key lawmakers, urging the bills’ passage.
Affordable-housing advocates had been pushing for a larger bond than is included in Beall’s SB 3, lobbying for a total of $6-$9 billion. The amount — originally $3 billion — was negotiated with Brown, who has longstanding concerns about the state’s long-term debt.
But Linda Mandolini, president of Hayward-based Eden Housing, said that the legislation is a sorely needed beginning. She and other affordable-housing officials and advocates say the money raised in the package would start to fill the gaping funding hole left by the elimination of the state’s Redevelopment Agency. The agency — cut more than five years ago to help pay for schools and other programs — had been a major source of funding for affordable housing.
“The problem is so big that if we don’t start somewhere we’ll never get anything done,” Mandolini said. “We’re the biggest state in the country, and we don’t invest in housing. That’s crazy.”
The housing push is being made at the tail end of the legislative session, almost five months after the Legislature passed a gas tax and weeks after it voted to extend the landmark climate program known as cap and trade. Both were tough, two-thirds votes, which could make it difficult to get Atkins’ SB 2 — which passed the Senate earlier this year — through the Assembly. It sets fees of up to $225 on certain real-estate transactions, not including home sales, and is the only permanent source of affordable-housing funding proposed in the package.
Previous iterations of SB 2 over the years have failed to gain traction, but housing advocates hope this latest attempt, which has the endorsement of the California Association of Realtors, will be a different story. Still, even moderate GOP lawmakers may be reluctant to join forces with Democrats in support of a new fee after a backlash over the July bipartisan cap-and-trade deal from party activists. Because of his cooperation, Assembly Republican Leader Chad Mayes, who propelled the legislation to victory, was forced to step down this month.
Without GOP backing, the bill would need the support of all 54 Democrats in the Assembly.
Senate Bill 3 also needs a two-thirds vote in the Assembly. It would place a $4 billion affordable housing bond on a future ballot, including $1 billion to extend the CalVet Home Loan Program, which is set to expire in 2018. Previously, the bill included a $3 billion bond measure.
Sen. Scott Wiener, D-San Francisco, said the housing crisis is not just a Bay Area problem and that he is worried it will only get worse if the state doesn’t act.
“This is a contagion that is moving around the state — that’s spreading like wildfire,” he said.
KEY HOUSING BILLS UNDER CONSIDERATION
Senate Bill 2, by Sen. Toni Atkins, D-San Diego, would create a permanent source of funding for affordable housing, imposing fees of up to $225 on certain real-estate transactions, such as mortgage refinancing. (Home and commercial real estate purchases would not be subject to the fee.) It would collect $1.2 billion over the next five years — and would raise a total of $5.8 billion during that time, including federal, local and private matching funds, according to committee estimates. Requires a two-thirds vote.
Senate Bill 3, by Sen. Jim Beall, D-Campbell, would place a $4 billion statewide housing bond on a future ballot. Like SB 2, it would pay for existing affordable-housing programs in California that used to be supported by funds from the state’s Redevelopment Agency, a giant source of money that was slashed during the Great Recession and never replaced. If the bond measure passes and is approved by voters, $1 billion of the total would go to extend the CalVet Home Loan Program, which is scheduled to expire in 2018. Requires a two-thirds vote.
Senate Bill 35, by Sen. Scott Wiener, D-San Francisco, would try to tackle the state’s housing-supply shortage. Currently, cities are told every eight years how many units they need to build to meet their share of regional demand — but they are not required to build them. This bill would make it harder to ignore those goals. It targets cities that fall short, requiring them to approve more housing developments that fit the bill’s criteria until they are back on track.
Senate Bill 167, by Sen. Nancy Skinner, D-Oakland, would strengthen the state’s 35-year-old Housing Accountability Act, known colloquially as the “anti-NIMBY (Not In My Backyard) Act.” Cities that don’t comply with a court order to allow development would be hit with automatic fines of $10,000 per housing unit.
Senate Bill 540, by Sen. Richard Roth, D-Riverside, allows cities to determine where housing needs to be built and to create a specific plan for development in that zone, including public hearings and environmental reviews. This is intended to speed up the approval and construction process.
Assembly Bill 73, by Assemblyman David Chiu, D-San Francisco, would give local governments cash incentives to create high-density “Housing Sustainability Districts” near transit with some affordable housing.
Assembly Bill 1505, by Assemblyman Richard Bloom, D-Santa Monica, restores the ability of local governments to require developers to include affordable rental units. A 2009 appellate court decision cut off that tool, which cities and counties had used for decades. Legislative leaders have been in talks with the governor’s office on this bill. The governor vetoed similar legislation by Atkins in 2013, arguing that it could make it harder for a city to attract development.