Beall's $3 Billion Bond Proposal to Build Affordable Housing Advances
SACRAMENTO – Sen. Jim Beall’s proposed $3 billion Affordable Housing Bond, funding to help solve California’s critical housing shortage, spur job creation, and leverage federal tax incentives to increase the bond’s impact, was approved today by the Senate Transportation and Housing Committee by a 9 to 1 vote.
Senate Bill 879, introduced in January, is designed to enable working Californians, who have been priced out of the state’s housing and rental markets, to set down roots in the state. The millions of hardworking low-income workers who cannot afford a house or apartment in the higher-cost metropolitan regions that generate jobs have been forced to live in less costly communities, enduring long commutes that give them just another reason to move out of California.
“It’s time for us to take action now,’’ Beall said. “The state cannot sit by let the market take care of the problem because it would have done so by now. And time is our enemy. The longer action is delayed means the bond will begin losing its value to inflation and rising real estate costs. Today, California is home to 21 of the 30 most expensive rental housing markets in the nation, hitting the middle-class and the working poor the hardest. The housing shortage has left more than 1. 5 million lower income families with no chance of affordable housing.
“This bill will create construction-related jobs and also expand California’s ability to access federal dollars to entice investment in affordable housing. For every 70 cents the state invests in multi-family housing programs, the state can use it to leverage an aggregate $3 in federal tax credits and exemptions for developers and investors.
“The average working Californian needs help in this unaffordable real estate market and SB 879 is one way to give them that help.’’
Under SB 879, $3 billion in bonds would be issued to fund existing and successful affordable housing programs in the state for:
• Multi-family Rental Housing -- $1.5 billion for housing construction, rehabilitation, or preservation of permanent and transitional rentals for lower-income households through loans to local government and non- and for-profit developers.
• Transit-Oriented Development -- $300 million for development programs, such as gap financing for rental housing developments that include affordable housing units, and as mortgage assistance for homeownership development. Grants would be available for municipalities and transit agencies to build the necessary infrastructure within close proximity to the transit station and for loans for the planning and development affordable housing within a quarter mile of the station.
• Infill Infrastructure Financing -- $300 million available to assist in the construction or rehabilitation of such things as water, sewer, and utility lines that support higher density affordable and mixed-income housing in locations designated as infill.
• Joe Serna, Jr. Farmworker Housing Grant Program -- $300 million to finance the construction, rehabilitation, and acquisition of owner-occupied and rental units for agricultural workers, with a priority for lower income households.
• Local Housing Trust Fund Matching Grant Program -- $300 million for matching grants for local governments and non-profits that raise money for affordable housing.
• CalHome -- $300 million for grants to local public agencies and non-profit developers to assist individual households through deferred-payment loan programs.
The bill would also pump money into local economies and create jobs. The estimated one-year impacts building 100 rental units yields $11.7 million in local income; $2.2 million in taxes and other local government revenue; and 1.62 jobs per apartment or 161 jobs. Other recurring impacts include $2.6 million in local income, $503,000 in taxes and other revenue for local governments, and 44 jobs.
SB 879 also fills a void left by a significant reduction in public funding for affordable housing. Nearly $5 billion in funds distributed through Proposition 46, passed in 2002, and Proposition 1C, passed in 2006, has been expended. In addition, more than $1 billion annually in redevelopment funds has been lost.
SB 879 has received the support of numerous groups including the League of California Cities, California Housing Consortium, California Housing Partnership Corporation, the California Coalition for Rural Housing, and the Silicon Valley Independent Living Center.
The bill moves to the Governance and Finance Committee for consideration.