In a bid to address the short supply of affordable housing and soaring rents across California, legislators, including state Sen. Mike McGuire, are thinking big — $3 billion big.
That is the amount of funding in a proposed bond that would go to state voters if it clears the Legislature and gets Gov. Jerry Brown’s approval. The money is sorely needed in Sonoma County, according to affordable housing developers and advocates.
“Sonoma is one of the least affordable counties in the state,” Larry Florin, CEO of Burbank Housing, a Santa Rosa-based nonprofit affordable housing developer. “In our mind, the housing deficit is at crisis proportions.”
McGuire, D-Healdsburg, is co-author of the bill that seeks to raise the funds with a bond measure that could be brought to voters in November 2018. Because it is a tax measure, it would need a two-thirds majority in the Legislature before heading to Brown’s desk.
“One of the greatest needs in the state of California is the need for workforce and affordable housing,” McGuire said. “This would be the largest investment in housing the state has made in over a decade, and it couldn’t come soon enough.”
The bill, which comes up for a hearing in the Senate Governance and Finance Committee on Wednesday, is among dozens of housing bills being discussed in the capitol. Another bill to fund affordable housing projects supported by McGuire would impose a $75 fee for paperwork filed with county recorders by individuals and businesses in the event of a sale, transfer or other real estate transaction. The fee would be capped at $225 per parcel. The bill is projected to generate more than $300 million annually.
But it’s the $3 billion bond, paid off through income and business taxes for decades to come, that McGuire thinks could have the strongest impact on housing markets across the state. With low interest rates on California bonds, there are favorable market conditions for taking on debt to spur housing development, McGuire said.
Private investment and local funding has fallen short of what’s needed to meet affordable housing goals in Sonoma County, advocates and developers said.
A similar bond measure was approved by 57.8 percent of voters in 2006, but the $2.85 billion for affordable housing has been spent. That and the dissolution of redevelopment agencies in 2011 have left many projects in the pipeline without funding, Florin said.
Previously, with redevelopment and bond money, Burbank Housing could construct two to three projects a year in Sonoma County, bringing about 150 units online annually, Florin said. Now, Burbank Housing does not have funding for additional Sonoma County developments after two current projects are completed this year, he said.
Florin used Lantana Place in west Santa Rosa as an example of a project that could use a boost from state funds. The $38 million proposed affordable housing development has been stalled for nine years because of a lack of funding.
Santa Rosa needs 4,662 additional units of housing by 2023 to meet growing demand, said David Guhin, the city’s director of planning and economic development.
In 2015 and 2016, building permits for a total of 428 units were issued. That’s 369 units a year below the rate that’s needed to meet the city’s housing goal.