It’s no secret that California has a serious affordable housing problem. The state is home to the nation’s most expensive rental market and the nation’s least affordable housing market. Nine of the ten most expensive housing markets in the U.S. are located here. And, as the Legislative Analyst’s Office put it, California’s home prices and rents are higher than just about anywhere else. As local policymakers throughout the state grapple with the issue of providing affordable housing, we thought it’d be helpful to provide a “top five” list of interventions that the state’s big city mayors can champion to help address the affordability crisis.
#5: Lobby for a Permanent Source of Funding for Affordable Housing
Even with the support of industry associations, housing advocates, business groups, and local elected officials, AB 1335 (Atkins) failed to make it to the Governor’s desk during the last legislative session. The bill would have established a permanent source to finance affordable housing by adding a $75 fee to some real estate transactions, generating between $300 and $500 million annually for affordable housing construction and providing a much needed boost for low- and moderate-income housing construction. Though it didn’t make it out this year, AB 1335 has been converted into a two-year bill. So there is another chance to establish a permanent source to finance affordable housing. In cities where affordable housing dollars are scant, it makes sense to lobby state officials to pass Speaker Atkins’ bill in 2016.
#4: House Homeless Veterans
The U.S. Department of Housing and Urban Development estimates that nearly 50,000 veterans are homeless on any given night, and an additional 1.4 million are at risk of homelessness. The majority live in urban areas, with the Los Angeles region accounting for the largest concentration of homeless veterans in the country. As part of the “Mayors Challenge to End Veteran Homelessness,” Mayor Garcetti vowed to end veteran homelessness by the end of 2015. But, citing the enormity of the problem locally, the Mayor has temporarily backed off his pledge. Despite advances, including housing 3,733 veterans, the city’s soaring rents and restricted housing supply have caused a six percent increase in veteran homeless in the last two years. In an attempt to help address the problem, Senator Feinstein is pushing a bill to permit veterans’ homeless housing on the local VA campus. Likewise, Councilmember Huizar has teamed up with County Supervisors Solis and Ridley-Thomas to fund a new skid row outreach program. As cities craft plans to address issues related to homelessness, local leaders would also be wise to revisit policies that have the effect of criminalizing homelessness, since such policies will potentially jeopardize access to federal funding for homeless services.
#3: Take the State’s Supreme Court Decision and Run with It
Across the state, nearly 200 cities have adopted inclusionary zoning laws, requiring developers to set aside a certain percentage of new housing for low- and moderate-income occupants. But until recently, many of these ordinances remained in a legal grey area. Successful lawsuits against rental and for-sale inclusionary zoning ordinances made many cities reluctant to enforce local laws. But the legal question regarding the applicability of these ordinances in the for-sale (i.e., non-rental) market has been settled. A unanimous California Supreme Court decision, cleared the way for cities to require developers to sell a percentage of units at below-market prices or pay an in-lieu fee to complete their development. The Court’s removal of this roadblock allows California cities to enforce inclusionary zoning rules for new for-sale housing projects. Now, with more stable legal footing, city leaders should consider enacting inclusionary zoning ordinances for non-rental units.
#2: Implement Policies that Help Families Avoid Homelessness
Of the 2.5 million homeless children in the country, over 20 percent are in California. And a new study on homelessness in Los Angeles County found that the stress of not having a home creates a life of uncertainty and fragility that can set a child on a path to chronic homelessness as an adult. The Economic Roundtable’s “All Alone: Antecedents of Chronic Homelessness” identifies ways to prevent families from falling into homelessness and highlights policies that can bring an end to chronic homelessness. Housing alone cannot be a solution if we ignore the many pathways that allow people to slip into homelessness. Creating employment opportunities and connecting individuals to services are key elements to effectively reduce homelessness. The study offers over ten recommendations, including gearing public assistance programs to identify children with special needs and adults who may benefit from behavioral health services, adopting integrated services for families that experience events that put them at increased risk of experiencing homelessness, and coordinating service provision to provide timely services for at-risk populations. In addition to focusing on housing, we also need to consider how we revamp, coordinate, and integrate our public assistance programs to support the goal of ending homelessness.
#1: Inclusionary Zoning for Rental Housing
As we’ve noted, California’s cities can now enforce inclusionary zoning provisions in the for-sale market, but the real bang for the buck is in the rental market. Let’s act now, before the results from the current uptick in housing shows that without intervention the free market simply won’t provide homes for low- and moderate-income families. Inclusionary zoning for rental units can help address this problem. But enacting local inclusionary zoning for rental units will require the state Legislature to act. The Palmer and Patterson decisions (read more here) made it difficult for cities to pass inclusionary zoning ordinances for rental units. In particular, the Palmer decision found that inclusionary zoning ordinances violated the state’s Costa-Hawkins Act, which allowed developers to set initial rents in jurisdictions with rent control. The legislative fix seems straightforward enough: carve an exemption to the Act that allows cities to enforce inclusionary zoning ordinances. And while the legislature passed a law to amend Costa-Hawkins in 2013, the Governor vetoed the bill in anticipation of the then-pending Supreme Court decision on for-sale housing. With Justices citing the state’s “epic” affordable housing crisis in their ruling to permit inclusionary zoning, it seems clear that California’s high court considers affordable housing a compelling state interest. With a mini-real estate boom underway, now is the time for local policymakers to agitate at the state level and urge lawmakers to revisit the Costa-Hawkins Act.
If the housing market won’t meet this pressing need, then it’s up to local and state leaders to put the tools in place to make housing accessible to more families.