Governor Gavin Newsom signed the 2019-20 state budget this week, which includes $2 billion for affordable housing, local infrastructure, and combatting homelessness. Of particular note is the budget’s $500 million expansion of the state Low-Income Housing Tax Credit program, one of the best tools available for financing construction of new affordable housing projects.
“Governor Newsom took a historic step in signing a state budget with unprecedented new funding to support millions of Californians struggling to find affordable housing,” CHC executive director Ray Pearl said in a statement. “To bring supplies into balance with growing demand, we still need to find a way to produce at least 1.4 million more units of affordable housing. That will require making some of this year’s investments ongoing—the newly expanded tax credit program, in particular.”
The final housing deal announced on Thursday also includes a new “carrot and stick” approach that will hold local governments more accountable for planning for affordable housing. After the governor introduced the idea earlier this year of connecting gas tax dollars to housing production, the final budget deal will strengthen the AB 72 (2017) process—and allow the state to fine cities up to $600,000 per month when they fail to plan for adequate housing. Cities with robust plans will be designated as “pro-housing” by the state and earn bonus points toward housing-related competitive grant programs.
STATE HOUSING POLICIES
California’s new housing budget is a wrap. Here’s what you need to know.
CALmatters
Last week, Gov. Gavin Newsom and legislative leaders agreed to spend a fresh $2 billion to combat the state’s housing and homelessness woes. Democratic lawmakers and the new governor settled relatively quickly on the amount—which advocates say is the biggest in recent memory dedicated to housing. Ever since, they’ve been trying to resolve the politically thornier questions that remain: Should big cities have exclusive dibs on the new homelessness dollars, or should counties get a slice? Should cities that don’t permit their “fair share” of new housing be punished by withholding money for potholes and broken roads? Should state law allow emergency homelessness shelters to be fast-tracked to avoid “NIMBY” opposition?
California’s New Budget Will Fine Cities Up To $600,000 Per Month for Not Building Enough Housing
Capital Public Radio
Gov. Gavin Newsom has reached an agreement with Democratic legislative leaders on how to incentivize local governments to build more housing — including monthly penalties for failure to comply. The deal also includes a plan for how to split up hundreds of millions of emergency funding dollars to address the state’s homelessness crisis. The agreement between the governor, Assembly Speaker Anthony Rendon (D-Lakewood) and Senate President pro Tem Toni Atkins (D-San Diego), which is expected to be put into print Thursday afternoon, emerges two weeks after lawmakers passed the state budget bill — and just hours before Newsom’s midnight deadline to sign it.
Why can’t California pass more housing legislation?
Curbed
In the first half of 2019, members of the California Legislature introduced roughly 200 bills that addressed the state’s worsening housing crisis. By the end of May, most of them had been nixed by the Byzantine nature of California politics. When the May deadline for floor votes on new legislation passed, Curbed LA referred to it as the “May Massacre” and “the worst month in California’s housing policy history.” Los Angeles Times writer Liam Dillon called the results “a bloodbath for California Housing.” Speaking to Curbed SF, a Bay Area lawmaker’s aide, referencing one of Game of Thrones’ bloodiest scenes, referred to the session as “a red wedding.” The casualties were widespread:
Lawmakers—cutting big checks to combat the housing crisis—fight over who gets the money
CALmatters
California lawmakers have approved more than $2 billion in new state spending on housing and homelessness. If that sounds like a big number, it is. The lion’s share will target the state’s homeless population, including $650 million in grants for local governments to build and maintain emergency shelters and $100 million for wrap-around care for the state’s most vulnerable residents. That’s about 50% more than former Gov. Jerry Brown approved to fight homelessness last year at the urging of California’s big-city mayors. Another $500 million will go to quintuple the size of the state’s premier affordable housing financing fund, a long-sought victory for low-income housing advocates who have sought an augmented funding source for years. The state Low Income Housing Tax Credit Program provides tax credits that subsidize the creation or rehabilitation of housing reserved for low-income residents.
TENANT PROTECTION
Rent control could be back on the California ballot in 2020
Los Angeles Times
Proponents and opponents of rent control are prepping for another California ballot fight next year after the sponsor of a failed 2018 initiative was cleared to begin collecting signatures for a second try. The new initiative, backed by the Los Angeles-based AIDS Healthcare Foundation, would similarly allow cities and counties to implement stricter rent control policies than currently allowed under state law. Michael Weinstein, the foundation’s president, said continuing increases in rents are leading to California’s recent surge in its homeless population and hurting millions of struggling tenants. “It’s a stain on our state,” Weinstein said of housing affordability problems. “It’s really potentially the death of the California dream.”
The big problem with affordable housing
Curbed
There’s a big problem with affordable housing: It eventually flips to market rate. In the next five years, by the city’s estimate, 8,597 income-restricted apartments in Los Angeles may no longer be affordable. “This is one of the greatest issues of urgency we’re seeing,” says Natalie Minev, staff attorney at the Legal Aid Foundation of Los Angeles. The Los Angeles City Council on Friday ordered the housing department to come up with recommendations for preserving the covenants that keep apartments affordable. Those covenants typically keep rents between about $350 and $1,300 for a one-bedroom, depending on income and family size. (The average price of a one-bedroom in Los Angeles is $1,745 per month.) “We need to embrace a policy that’s calling for no displacement, no evictions,” says Councilmember Gil Cedillo.
Unconventional Housing, Fear of Eviction Challenge Bay Area Census Efforts
KQED
For the past three years, Victor Manuel Escobar Rivas has lived in a trailer on a shaded road in Mountain View. His “trailita,” as he calls it, is one of more than 30 mobile homes that extend down the block in a half-mile long line of grey metal. Escobar’s trailer doesn’t have an official address, so he directs people to send letters to a nearby friend. She stops by his trailer to bring him his mail every few days. But while friends and family know to write him at this address, the U.S. Census Bureau doesn’t. Escobar is one of thousands of Bay Area residents who live in “unconventional housing” and are at risk of being missed in the 2020 Census, which is tasked with counting every person in the nation. Since 2010, soaring Bay Area rents have forced residents to live in garages, sheds, mobile homes, or crowded multi-family apartments.
L.A. leaders say Trump proposal would boot thousands of immigrants from public housing
Los Angeles Times
Calling the plan “torture” and “state-sponsored terrorism,” Los Angeles City Council members on Wednesday blasted a proposed rule that would deny federal housing aid to households that include anyone living in the country illegally, even when other members are eligible for such aid as lawful residents or U.S. citizens. Immigrants lacking lawful status are ineligible for federal housing subsidies. But current rules under the Department of Housing and Urban Development allow for subsidized rent to be prorated to cover only eligible residents, such as minors who are U.S. citizens. The change could affect 25,000 households and put as many as 55,000 children who are legal U.S. citizens or residents at risk of eviction, an internal agency analysis found.
AFFORDABLE HOUSING CONSTRUCTION
Riverside to get 265 homes for homeless and poor, thanks to $32 million in state grants
Riverside Press Enterprise
Developers are poised to use more than $32 million in state dollars to build 265 homes in Riverside for homeless people who suffer from mental illness, low-income residents and veterans. Deputy City Manager Moises Lopez said the homes will be clustered in four apartment communities spread across the city — in downtown, the Eastside, Arlington and La Sierra. Riverside was the only Inland Empire city, outside of the Coachella Valley, to receive housing grants awarded last week through two separate programs, according to state officials. Lopez said construction is expected to begin in the next six to 18 months. “We’ve got serious housing challenges throughout the state and the city is no different,” he said.
SF affordable housing projects kick-started with $40 million in state funds
San Francisco Chronicle
For more than a half century, the Kahn & Keville tire shop at Turk and Larkin streets has been known for the inspirational sayings spelled out on the letter board sign perched on the corner. Now the sign’s days may be numbered: Last week, the city learned that the nonprofit developer that owns the property at 500 Turk St. was due to receive $20 million in state money to allow construction to begin early next year on an 108-unit affordable housing project. The tire shop is the site of one of two San Francisco affordable housing developments that have been granted a combined $40 million in state money, an injection of cash that will help jump-start stalled residential development in the Tenderloin and on Treasure Island. The money comes as the demand for subsidized housing in the city remains high.
HOMELESSNESS
California’s homelessness crisis is spiraling out of control. These mayors want to solve it with tiny homes, trailers, and floating apartments
Business Insider
If you want to know how bad the homelessness crisis has gotten in California, just turn to 4 squares miles east of Main Street in downtown Los Angeles. The area, known as Skid Row, has long been inhabited by the city’s poorest residents. These days it resembles something akin to a nightmare. Residents sleep in tents surrounded by discarded needles and feces, their belongings tucked into trash bags and shopping carts. Some shade themselves with tarps or use nearby light poles to connect to power. Others have contracted typhus from rats scurrying across the sidewalk. One resident was even found bathing in the water from a broken fire hydrant.
Nobody Knows What to Do About L.A.’s Homelessness Crisis
The Atlantic
The problem is anything but invisible. Tent cities line freeway underpasses mere blocks from some of the richest zip codes in the nation. Rat infestations and human waste from makeshift encampments—such as those just outside city hall’s iconic Art Deco tower and the main downtown police precinct—are suspected in cases of flea-borne typhus and typhoid fever spread by contaminated food. Those are the Joe Friday facts. Yet the news this month that Los Angeles County’s homeless population grew by 12 percent last year—to just under 59,000 people, enough to fill Dodger Stadium to overflowing—still managed to shock this city’s civic and political establishment.