Measure clears way for tax hikes on ballot to address Bay Area housing crisis
Author: Rachel Swan
Publication: San Francisco Chronicle
The idea was bold and controversial: Blanket the Bay Area with 35,000 new homes a year. Protect 300,000 low-income households that are on the verge of being displaced. Safeguard 30,000 units of existing affordable housing.
Assemblyman David Chiu estimates that the region needs about $2.5 billion annually to meet the terms of a compact that politicians and business leaders signed in January, designed to bring housing stock in line with demand. His bill allowing two government agencies to put tax measures or bonds on the ballot — which the Legislature passed Thursday by a knife-edge margin — is the first step.
The bill awaits the signature of Gov. Gavin Newsom.
Supporters celebrated the victory, but acknowledged challenges ahead. The fight over AB1487 points to a much larger debate over how to solve the housing crisis, and who decides where to build.
“Clearly, our piecemeal approach in the past of trying to solve this crisis city by city and county by county hasn’t worked,” said Chiu, D-San Francisco. He’s called for a more unified strategy that would recognize how deeply the 101 cities of the Bay Area are interconnected: if residents of North Berkeley or Brisbane obstruct development in their backyards, it puts more pressure on Oakland and San Francisco.
AB1487 would enable the Metropolitan Transportation Commission and Association of Bay Area Governments to put funding measures on ballots in the nine counties, generating sustained revenue for affordable housing — perhaps as soon as next year. The money would go toward tax credits and subsidies for affordable housing projects, updating of land-use or zoning plans, tenant services and assistance for cities to buy land parcels. It wouldn’t completely close the gap, Chiu said. He expects to raise between $1 billion and $1.5 billion annually, roughly half of what the region needs.
Still, AB1487 would be a “coordinated, regional approach” to a housing shortage that’s pushed people into suburbs and rural areas, forcing them to commute long distances to work. The by-products of land-use decisions have spread throughout the Bay Area, as traffic chokes freeways, greenhouse gas emissions increase and homeless encampments pop up in areas once insulated from in-your-face poverty.
Solving those problems will take the same “we’re all in this together” mind-set that voters applied to wetland restoration in 2016, or to transportation when they passed Regional Measure 3 last year. Chiu spent months meeting with city councils, county supervisors and nonprofit groups to pitch this concept, revising his bill again and again to ensure they all had input. He originally wanted to create an agency to raise funds for affordable housing construction, an idea he eventually scrapped. In the final version of the bill, Chiu also ensured that 80% of funds collected from a county would go back to that county. The other 20% would go into a regional pot.
But AB1487 still hit plenty of opposition. Some leaders said it would run roughshod over local control. Opponents in the Legislature worried that it would force their constituents to pay taxes that would ultimately benefit other cities.
“Right off the bat, 20% of the taxes that are collected and taken from a community are highly likely to not go back to that community,” said Assemblyman Marc Levine, D-San Rafael. He also disliked handing over land-use decisions to the Metropolitan Transportation Commission, calling it “an unaccountable bureaucratic agency with no track record of building housing.”
Berkeley Mayor Jesse Arreguín, who is vice president of ABAG, said proponents of AB1487 worked hard to ensure that all Bay Area cities “had a voice” in the legislation. Part of the reason Chiu divided control between MTC and ABAG was to create a system of checks and balances: ABAG is dominated by smaller cities and towns, while MTC skews toward bigger cities.
The changes failed to mollify Assemblywoman Rebecca Bauer-Kahan, D-Orinda, who voted against AB1487. She said large cities would see a return on their tax funds and small cities would not.
“If my constituents are paying these taxes, they should see the benefit of it,” Kahan said.
Similar criticisms dogged the original plan to build 35,000 homes, crafted this year by a panel of mayors, tenant advocates, tech executives, labor groups and others who don’t normally sit down at the table together. When proponents presented the 10-point “CASA compact” — CASA is shorthand for the Committee to House the Bay Area — to city councils, they sometimes got a cold reception, particularly from suburban leaders who saw the plan as an intervention from their big-city counterparts in San Francisco, Oakland and San Jose.
Though the plan stoked debate, its language percolated into a number of bills passed by the Legislature this session. In addition to AB1487, Chiu also sponsored AB1482 to prevent unreasonable rent increases. State Sen. Nancy Skinner, D-Berkeley, sponsored SB330 to suspend local obstacles to housing production. AB1486 by Assemblyman Phil Ting, D-San Francisco, expands access to surplus lands for affordable housing development. Newsom began using some of the terms associated with the compact — “production,” “preservation” and “protection” — in public statements.
To Chiu, it was no surprise that the Bay Area had so much influence over the course of housing statewide. “We were the epicenter of this crisis,” he said. “The evictions, the high rents, the homelessness. We saw all of that before everyone else.”
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