In affordable housing news this week, the Legislature approved a new state budget for 2019-20—including $2 billion for affordable housing, local infrastructure, and homelessness services. Gov. Newsom is expected to sign the budget later this month.

The California Housing Consortium applauded the passage of a “historic” budget with unprecedented investments for addressing the affordable housing crisis. “Today’s budget vote is an enormous, positive step in the right direction toward supporting millions of Californians struggling to find affordable housing—and a hopeful sign of things to come as the state expands its efforts to address the housing crisis,” CHC Executive Director Ray Pearl said in a statement.

Of particular interest is the budget’s $500 million expansion of the state Low-Income Housing Tax Credit—one of the best tools available for financing construction of new affordable housing projects. CHC has sponsored tax credit legislation for the last four years, including this year’s AB 10 (Chiu). In a statement, CHC thanked Gov. Newsom, Assemblymember Chiu, and others for making the expansion of the tax credit program a reality—while also noting the budget does not yet make these changes permanent. “This year’s budget shows state leaders understand this challenge and the tools we must use to address it,” Pearl said this week. “We will continue to ensure tax credit allocations are ongoing, so they provide the financial certainty needed to produce affordable housing in every community.”

CA BUDGET

California passes $215 billion budget with new spending for families, immigrants and housing
Sacramento Bee
California lawmakers passed a $214.8 billion budget deal Thursday, with new spending on schools, homelessness and health care for undocumented immigrants. The budget relies on a surplus to add billions to the state’s reserves funds, which will bring the state’s total so-called rainy-day fund to $19 billion. It puts hundreds of millions of dollars into other reserves, too, including ones for schools and social services. Lawmakers are still hashing out final details of some aspects of the budget through so-called trailer bills, which can be passed after the main budget bill. But the bill passed Thursday will provide the major framework for state spending in the next fiscal year, which starts July 1.

Where Gov. Gavin Newsom wins and loses in newly passed California budget
San Francisco Chronicle
The budget proposal that Gov. Gavin Newsom introduced in January gave California’s new leader his first major opportunity to stake out how he would accomplish the ambitious agenda he touted on the campaign trail. Many of those plans overlapped with the priorities of the Legislature, and they are reflected in the final $215 billion budget deal reached over the weekend. Lawmakers passed the budget Thursday, sending it to Newsom for his signature. The Senate vote was 29-11, and the Assembly approved it 60-15. But several key Newsom initiatives were rejected or still await action in budget follow-up bills that the Legislature will consider in coming weeks. Those differences underline challenges the governor will face to achieve signature campaign promises such as creating a universal health care system and building 3.5 million homes by 2025.

STATE HOUSING POLICIES

Housing crisis: California Legislators overpromise but under-deliver
ABC 10
Homelessness has increased in Sacramento, San Francisco, and Los Angeles by double digits in the past two years. More than half of California renters spend over 30 percent of their income on housing. Experts point to the low supply of housing and the need to build more as the leading cause of both homelessness and the crisis in housing affordability. During his campaign and upon taking office, Gov. Gavin Newsom promised to build the state out of a housing shortage of 3.5 million units of housing by 2025.  “We all know the problem. There’s too much demand and too little supply. And that is happening in large part because too many cities and counties aren’t even planning for how to build,” said Newsom during his State of the State speech, adding, “some are flat out refusing to do anything at all.”

California Lawmakers Tackle Housing Issues Impacting Renters
Capital Public Radio
There’s a big housing crunch in the California, something lawmakers have been trying to grapple with through legislation. In the past two legislative sessions, some of those bills have made waves. Tenants groups had hoped to capitalize on that momentum and get some protections passed. Levin also looks at how unions and developers will need to work together if another wave of construction is going to happen to address the housing crunch. Levin’s article on the issue delves into who renters are and how they are faring. Levin’s California housing podcast “Gimme Shelter” discussed why it’s so expensive to live in California, and what can the state do about it?

The Governor Is Suing My Hometown
NPR
California Governor Gavin Newsom says his state is in the midst of a housing crisis. The economy is growing, the population is swelling, but there just aren’t enough homes to go around. Rent and home prices are marching higher, and the homeless populations of the state’s largest cities are growing fast. Newsom says the solution is to build more housing, and he has demanded that cities throughout the state live up to rules that require them to build enough homes to meet demand. Most have fallen into line, but several have resisted, including Huntington Beach. Many people there are dismayed by the pace of development that has changed Surf City’s beachy feel, and the mayor has said that he will not sanction the building demanded by the state.

HOUSING CRISIS

California cities lead the U.S. in inflation. Housing costs are a big reason why
Los Angeles Times
Nationally, consumer prices are barely moving, with inflation clocking in at just 1.8% for May. But if you live in a major urban area of California, you’ve noticed a much bigger hit. Among the chief culprits? Housing costs. The U.S. Bureau of Labor Statistics reported Wednesday that a handful of California metropolitan areas saw the greatest jump in the consumer price index in May. San Diego County saw the largest increase, with inflation rising 3.8% from a year earlier. That was followed by Los Angeles and Orange counties, where consumer prices rose 3.1%.

Hey, middle class, the housing crisis is coming for you next
Curbed
Charlotte, North Carolina, one of the Southeast’s biggest cities, is short 34,000 affordable housing units. A booming job market has attracted 100,000 new households to the city since 2000, and supply hasn’t kept up with demand. In Salt Lake City, Utah, there are more families than available places to live, a shortage of about 54,000 units. It’s the most severe manifestation of pricing pressure in a state where housing costs can run higher than both Las Vegas and Phoenix. This deficit comes after a year when Salt Lake City led the nation in homebuilding. In Columbus, Ohio, the housing market has cooled after ever-higher prices exhausted buyers who simply can’t keep up with rising costs.

Opinion: How one small city could show way for California housing challenge
San Francisco Chronicle
La Verne, a small city of 32,000 in east Los Angeles County, doesn’t like to be first in launching new policies. And it didn’t want to make itself a proving ground for the best new tool California communities have to transform themselves. But La Verne is about to become a California leader anyway. That’s because this city — for its own reasons — has formed one of California’s first EIFDs. The acronym stands for enhanced infrastructure financing district, a new government entity that the Legislature has championed for addressing California’s massive housing shortage and infrastructure deficit.

TENANT PROTECTION

New report underscores link between ‘shocking’ number of evictions, homelessness
Curbed Los Angeles
More than a half million renters have been evicted in Los Angeles County over the past eight years, according to a new report by Public Counsel and the UCLA School of Law that calls on county supervisors to adopt permanent rent control measures. Between 2010 and 2018, landlords filed 505,924 eviction proceedings in Los Angeles County Superior Court, a figure that the report, titled “Priced Out, Pushed Out, Locked Out,” calls “shocking” and “staggering.”

L.A. council members propose taxing landlords who leave homes vacant
Los Angeles Times
Los Angeles should penalize landlords who keep homes vacant as the city suffers a housing and homelessness crisis, several members of the Los Angeles City Council declared in a proposal unveiled Tuesday. City Councilmen Mike Bonin, Marqueece Harris-Dawson, Paul Koretz and David Ryu are asking city staffers to come back with options for an “empty homes penalty” or vacancy tax, which would likely have to go before voters for approval.

A $1,800 apartment became a $3,300 corporate rental. Is that bad for housing?
Los Angeles Times
Last week, an upstart company started providing furnished apartments for business travelers on Franklin Avenue in Hollywood. Its website describes a “tastefully renovated” apartment complex with “laid back West Coast DNA” and a feeling of “whimsical Italian modern maximalism.” Tony Diamond, the founder of the company behind the project, said the owner of the 30-unit, rent-controlled apartment building worked with him for a simple reason: A studio at the complex near the iconic corner of Hollywood and Highland previously was advertised at $1,800.

LOCAL HOUSING INITIATIVES

Inglewood makes rent control permanent, sets cap at 5 percent
Curbed Los Angeles
Inglewood is joining the growing list of Los Angeles communities adopting rent control—and residents say the safeguards for tenants couldn’t come fast enough in an increasingly prosperous city where 64 percent of households rent rather than own. The Inglewood City Council on Tuesday unanimously approved permanent rent control measures that will block property owners from increasing rents more than 5 percent annually, though there are exceptions, and the cap in some cases will be 8 percent.

Editorial: Sure, study a vacancy tax, but the solution to L.A.’s housing crisis is still to build
Los Angeles Times
Plagued by a shortage of affordable housing and a worsening homelessness crisis, Los Angeles leaders are grasping for policies that could help ease the problem. The latest idea is an “empty homes penalty,” otherwise known as a vacancy tax. Given the depth of the city’s crisis, it’s worth exploring. In fact, the exploration alone could pay an immediate dividend by forcing the city to figure out how many vacant units it actually has, and why.

HOMELESSNESS

California Gov. Gavin Newsom and legislators are at odds over spending to address homelessness
Los Angeles Times
Gov. Gavin Newsom and legislative leaders have agreed to roughly $1 billion in spending to fight California’s growing homelessness problem, but they haven’t yet decided how to divvy up much of that money. At issue is $650 million earmarked for local governments for the fiscal year beginning July 1, on which lawmakers are scheduled to vote ahead of a deadline Saturday. Left unresolved is who is going to get that money and what it could be spent on.