2019: A Year for Housing Solutions in California
Nooh Palizi | NextGen Marin
The last few decades in California have seen more and more available jobs and higher and higher rents, but little increase in housing supply. This has led to the tragic flight of longtime residents from across California, who are fleeing to states with lower living costs despite consistent job growth. So, how is the state of California set to tackle this issue in 2019?
Recently, there have been solutions brought to the table by policymakers, but it seems that local government officials are still unable or unwilling to make any substantive change. Even tech companies, fed up with bureaucratic obstacles, have taken initiative to start building more housing in the Bay Area. Without a doubt many companies and individuals that desperately need housing are tired of waiting around for policy changes that seem to never come. Meanwhile, we residents are left to ask ourselves: how much longer will we have to wait? A study from MarketWatch found that about 28% of college graduates in 2016 are taking their diplomas back to their parent’s homes and remaining there as housing costs continue to increase. With a salary of over $82,200 now being considered low income for a single person in most of the Bay Area, how the heck is any entry-level college grad supposed to afford housing?
With California now having the 49th lowest ratio of housing units per resident, there seems to finally be a sense of urgency among legislators to try and tackle the crisis. Let’s explore what is being done, starting with newly elected Governor Gavin Newsom. His proposed new housing plan would substantially increase the construction of new homes - at least in theory. He has called for 3.5 million new homes by 2025, roughly about 500,000 new homes per year. This is an enormous number, substantially bigger than the days of even massive production in the 1950s, and the highest then was only 300,000 new housing units built. It is highly unlikely that this goal will be met, as local impediments to development such as widespread restrictive zoning laws continue to raise construction costs across California. However, on the bright side, there have been some successful policy changes that may help realize Newsom’s lofty ambitions.
Senator Scott Wiener has introduced Senate Bills 35 and 50, the latter of which seeks to add four-to-five story homes near transit stations. Under SB 35, cities will submit their progress to the California Department Housing and Community Development with regards to housing their production every 2 years. If the city is found to have failed to meet RHNA goals during a progress check, streamlining will be in effect for the entire next two-year cycle. A city is considered "on track" if it is 1/4 of the way to its goal by year 2 of the 8-year cycle, 1/2 of the way to its goal by year 4, and so on.
Significantly, the streamlining process will apply only to the income levels that aren’t being built for – so if a city is building sufficient market-rate units, but not enough low-income units, the project must add low-income units to qualify for streamlined approval. However, it is unclear how exactly this streamlining process will actually be implemented.
Shifting gears away from government solutions, there have already been initiatives from the private sector to simply create their own housing without waiting around for policymakers to institute change. Three tech companies in particular have taken initiative to alleviate the housing crisis. So far $20,000,000 has been donated from LinkedIn, Cisco and Pure Storage towards building homes for low income Bay Area families. This money is given to a non-profit organization, Housing Trust Silicon Valley, that helps low-income families find new homes and help homeless citizens get off the streets. “Housing Trust has invested $183 million in programs that help everyone from the homeless to renters to first-time home buyers - creating more than 17,000 affordable housing opportunities serving over 30,000 of our neighbors.”
Organizations like these are critical because they draw attention to the need for workforce housing. It demonstrates that solutions do not have to come only from government sources, although collaboration is critical. In order to build housing units that we desperately need, the private and the public sector must work together to tackle this issue head on. California’s future quite literally depends on it.