We are experiencing an affordable housing crisis in our state. At the heart of it is a lack of supply. Complicating the situation are problems at every level: labor availability and cost; building supply prices; government fees; the cost of capital; regulatory rules and barriers; and a builder’s willingness to take a risk that they will make a profit at the end of the entitlement and construction period.
There are over 550,000 approved housing units in California; about a three-year supply. There is a false drumbeat by urban legislators that suburban city councils are blocking housing construction and the state should step in to circumvent local control. But all of the cities in the 7th Senate district are in compliance with the State’s affordable housing requirements. So I reject the notion that the small towns of Contra Costa and Alameda counties are to blame. Still, everyone needs to work together to make the situation better.
The shortage of supply has given landlords the ability to raise rents dramatically in a tight market, in some cases the equivalent of gouging. In response, I supported legislation temporarily limiting rent increases to 5 percent a year plus the cost of living. This should allow landlords to recoup their investment without forcing tenants out of their apartments. But rent control is an imperfect solution given its potential to discourage the construction of new rental housing and lead landlords to convert apartments to owner-occupied condominiums.
A better solution would be to provide aid directly to needy tenants. I have proposed that the existing renter’s tax credit of $60 for singles and $120 for couples be increased to $220 and $434 respectively. This would provide immediate relief to 2.4 million low-income renters. California currently provides over $4 billion in tax relief for homeowners but only about $300 million in help to renters. The renters tax credit has not been increased since 1979 – 40 years. We can and must do better for our most vulnerable renters.
Additionally, I have authored legislation to limit some of the regulatory burdens on affordable housing projects. My bill passed the Senate 30-5 and is currently awaiting action in the State Assembly.
Finally, our state budget approved funds for a variety of housing programs this year. They were:
- $1 billion for local and regional affordable housing support
- $500 million for in-fill grants
- $500 million for low-income grants
- $500 million for affordable housing tax credits
- $200 million for moderate-income housing credits
- $25 million for rental assistance and legal aid