This week in affordable housing news, Assemblymember Chiu made public the final amendments to AB 1482, a far-reaching anti-rent gouging bill that has earned the support of Governor Newsom. As part of a deal announced last week, the legislation will cap annual rent increases at 5% plus inflation for the next 10 years, while providing exemptions to smaller landlords, deed-restricted housing, and newer buildings occupied in the last 15 years. Ahead of a vote next week, the Los Angeles Times editorial board tells lawmakers “They shouldn’t squander this opportunity.”
With nearly every community in California feeling the housing crunch, the Sacramento Bee asks: Why are housing permits down 20 percent? A new Legislative Analyst’s Office report highlights a serious slowdown in housing permits issued in July—calling the decline “the most severe since the Great Recession.” The state is now on track to permit fewer than 100,000 homes, when it needs at least 180,000 a year to keep up with population growth. What’s behind the dip? “There are structural barriers to production, many of which are at the local level where the final housing construction decisions are made,” Tia Boatman-Patterson, Governor Newsom’s chief housing advisor, told the Bee, while highlighting the administration’s efforts to “strengthen the consequences for those jurisdictions that continually refuse to even plan for enough housing.”
The Sacramento Bee finds another source of rising prices in an unexpected place: The Trump administration’s tariffs on everything from home appliances to the materials used in countertops. With construction costs already climbing, the California Building Industry Association tells the Bee that the Trump tariffs have created a “perfect storm” for homebuilders, adding an additional $20,000 to $30,000 to the cost of a new home.
STATE HOUSING POLICIES
California lawmakers trying to make it easier to build backyard housing
San Francisco Chronicle
Before Michael Wolff could persuade his father to move down from Oregon, the Santa Rosa resident had to figure out where he would live. Local rents, averaging nearly $2,000 a month, were too expensive for a retiree’s budget. Wolff, a general contractor, considered splitting a lot he had purchased and building two houses side by side, one for his own family and the other for his dad.
It’s Backkkkkk?! State Bill Wants To Revive Redevelopment Agencies To Tackle Housing Shortage
KPCC
In 2011, while California was experiencing budget issues, Governor Jerry Brown killed redevelopment agencies. Now, there’s a newly proposed bill that would bring a version of these agencies back to life. Redevelopment agencies had been around since the 1940s and their function was to invest into communities deemed “blighted.”
HOUSING CRISIS
California On Pace To Permit Under 100K Homes This Year; Worst Since Recession
CBS San Francisco
Despite strong demand for homes amid the state’s housing crisis, new figures show the number of residential building permits issued this year is on pace to be the lowest since the Great Recession. According to the nonpartisan California Legislative Analyst’s Office, only 8,640 permits were issued in July, down 10 percent from July of 2018. In the first seven months of 2019, 61,200 permits were issued, down 17 percent from the previous year.
California is experiencing a housing shortage. Why are housing permits down 20 percent?
Sacramento Bee
This was going to be the year that California’s political leaders fought and won the war against the skyrocketing cost of unaffordable housing. They promised to do everything possible to build more homes and bring down the state’s mind-numbing housing prices. But new data from the respected Construction Industry Research Board illustrates the scope of that challenge: in the first six months of 2019, there was almost a 20 percent decrease in housing permits statewide compared to the same time period last year.
Housing Crisis Shifts Conversation On Where New Homes Belong
KPBS
Lois Sunrich has weathered the San Diego region’s affordable housing crisis better than many. The 72-year-old retiree lives in a modest 400-square-foot studio in Encinitas — the kind of housing the city doesn’t build anymore. Sunrich ran a nonprofit that collected stories from local residents — rewarding work, but not the kind that allowed her to save much for retirement.
Trump’s tariffs made California’s housing crisis worse: A ‘perfect storm of the wrong kind’
Sacramento Bee
President Donald Trump’s tariffs have created the “perfect storm” at the wrong moment for the housing industry, California builders say. The California Building Industry Association estimates tariffs have driven up the cost of an average-size new home by $20,000 to $30,000. That comes from tariffs on appliances, certain counter tops and other miscellaneous items that “at the end of the day, really add up,” according to Dennis Fitzpatrick, owner of Fitzpatrick Homes in Modesto.
Editorial: California’s struggle to contain the housing crisis
San Francisco Chronicle
Assemblyman David Chiu’s bill to restrict rent increases and evictions statewide did better than survive a major legislative bottleneck last week, winning a late-breaking blessing from Gov. Gavin Newsom that strengthened the bill and its prospects of passing in the two weeks before lawmakers adjourn for the year. It was joined by state Sen. Nancy Skinner’s Housing Crisis Act, the most significant remaining proposal to address the anemic housing construction at the root of the problem.
Editorial: Gavin Newsom tells Southern California to plan for housing. A lot more housing
San Diego Union Tribune
If Southern California leaders were questioning whether Gov. Newsom is serious about ending the state’s housing crisis, he’s given them a very clear answer. He is. His administration recently overruled a long-term housing plan from Southern California leaders that vastly underestimated the number of homes needed to ease the existing shortage and to shelter the next generation of Californians.
Editorial: State is about to raise the bar for Bay Area housing
San Francisco Business Times
Few Californians took Gavin Newsom particularly seriously when he said during his 2018 run for governor that the state should plan to add 3.5 million homes over the next seven years. After all, California has never in its history reached that pace of construction for a single year — let alone done it seven years on the trot.
Editorial: Redevelopment, ‘opportunity zones’: California doesn’t need these slush funds
San Diego Union Tribune
Two ideas meant to allow government to promote economic activity are again being kicked around in Sacramento. They may sound good, but their history in the state suggests they be kicked to the curb. One proposal by Sen. Jim Beall, D-San Jose, to revive redevelopment has won approval in the state Senate and is expected to be taken up by the Assembly in coming days.
TENANT PROTECTION
Here’s how California’s new plan to cap rent increases would work
Los Angeles Times
California lawmakers are on the verge of approving one of the only state laws in the nation to limit rent increases after Gov. Gavin Newsom announced a deal with legislative leaders last week on a bill to cap annual rent hikes. The measure, Assembly Bill 1482, would limit yearly rent increases statewide to 5% plus inflation for the next decade. Experts believe the measure would provide more stability for renters while also potentially leading to more regular rent hikes for tenants. Powerful interest groups have lined up against the measure, and its passage by the Legislature’s Sept. 13 deadline is far from assured.
California rent cap measure could have limited impact
Mercury News
A newly-minted rent cap deal would have brought relief last year to relatively few renters in the state, although Bay Area tenants would have benefited more than most, according to a Zillow analysis. The proposed cap — allowing landlords to annually raise rent no more than 5 percent plus the rate of inflation — would have saved money last year for about 12 percent of Bay Area tenants. About 30 percent of renters in two popular destinations for Silicon Valley refugees, Vallejo and Sacramento, would have received a break.
Thousands of California renters with Section 8 vouchers can’t use them. What lawmakers are doing about it
Orange County Register
As California struggles with a crisis in affordable housing, state lawmakers are trying to improve a severe shortage of housing available to renters who have federal Section 8 vouchers. The vouchers allow tenants to pay only 30% of their income toward rent, with federal assistance to pay the rest. But most landlords do not accept tenants who pay with vouchers, saying they are too burdensome.
Editorial: Gavin Newsom wants to stop rent gouging. Will lawmakers finally stand up for tenants?
Los Angeles Times
Thanks to a last-minute intervention by Gov. Gavin Newsom, California lawmakers have been given a second chance on one of the most important housing bills this session: a proposal to temporarily cap rent increases and require that landlords show “just cause” before they evict a renter. They shouldn’t squander this opportunity.
Opinion: More Rent Control In California Will Make Housing Problem Worse
Forbes
Rent control is a terrible idea that just won’t die. The latest example is a new bill working its way through the California legislature that would cap annual rent increases at 5% for buildings more than 15 years old until 2030. Proponents of the bill argue rent control is needed to maintain some degree of affordability in high-price areas like San Francisco, but they’re wrong. What California really needs is more housing, and this bill does nothing to address the strict zoning rules that hinder construction throughout the Golden State.