Senate Approves Beall's $3 Billion Affordable Housing Bond Proposal
SACRAMENTO – Acquiring the necessary two-thirds majority, Senate Bill 3 won Senate approval today on a 30-9 vote, sending Senator Jim Beall’s proposed $3 billion bond to generate more affordable housing to the Assembly for its consideration.
“The state must take action to combat the severe lack of affordable housing that has made it virtually impossible for working families to own a home or find a reasonably priced apartment,’’ Beall said. “Senate Bill 3 allows California to leverage nearly $11 billion in available federal funding to stimulate the creation of thousands of homes and apartments that middle- and low-income earners can buy or rent. Housing for veterans and the homeless is also a bill priority.’’
The scarcity of affordable housing and rentals is cited as a contributing factor in the exodus of college-educated young adults and working families to other states with a lower cost of living. This fundamental lack of housing has driven real estate prices higher making it difficult for businesses to hire and retain employees who hope to plant roots in California.
Since 2000, the median rents has risen nearly 25 percent while the median income for renter households has dropped 7 percent, when adjusted for inflation. Since 2005, the state’s renter households grew by about 900,000. Since 2000, the median rents has risen. The upshot: low-income renters devote a median of 68 percent of their income to rent.
“California’s shortage of affordable housing makes it impossible for low-income workers to escape poverty,’’ Beall said. “In fact, an argument can be made it helps increase the state’s poverty rate.’’
Senate Bill 3's funding would be invested in existing state programs with proven track records in generating housing. The programs include CalHome, the Local Housing Trust Fund Matching Grant, Joe Serna Farmworker Housing, Multifamily Housing, and more. The programs will use the financial assistance as an incentive to persuade developers to build more affordable housing. The funding and tax credits can help builders offset expensive land costs that impede affordable housing construction. The adoption of regulatory reforms pending in the Legislature cannot alone bridge the financial gap that has slowed the building of affordable housing.
According to a study by the California Housing Partnership and the Northern California Carpenters Regional Council, SB 3’s bond plus the federal funding would have a dramatic impact on the state economy over a five-year period by creating:
• Nearly 50,000 new and rehabilitated housing units.
• 137,000 jobs
• More than $8.5 billion in labor income
• $23.4 billion in economic activity
• More than $1 billion in additional local and state taxes & fee revenue
SB 3 is part of a package of Senate bills aimed at easing California’s chronic housing shortage. The bills include proposals to crackdown on cities that prohibit affordable housing and ease the ability of local governments to obtain state funding for planning affordable housing developments.
“The package is the culmination of an extensive amount of information and public input gathered from six special hearings held across the state by the Senate Housing and Transportation Committee,’’ said Beall, the committee chairman.
“With the loss of redevelopment housing funds and the depletion of housing bond funds passed in the early 2000s, California has lost $1.5 billion annually in funding. In addition, the federal government has cut funding by 46 percent over the last eight years making it increasingly difficult if for California to address. The state faces a shortage of 3.5 million affordable housing units. This is a crisis that spans from the homeless, to the very poor, to students who can’t afford rent, to middle-class families who are being priced out of home ownership.’’