The only good news about housing is that it’s being talked about. The staggering cost of housing seems to be a topic of conversation everywhere these days, but improvements elude us.
We hear about over-regulation, the tortuous entitlement and permitting process, resistance to higher densities, evermore rigorous building codes, environmental mitigation, climate change responsibilities, impact fees, financing over longer timeframes, NIMBY opposition, CEQA abuse and scarcity of buildable land.
While doubtlessly less than a complete list, all of these are factors in the current condition of housing affordability.
It’s important to see that we got to this place through public policy choices, many of them made in pursuit of worthy objectives but having unintended consequences for housing. Other policy choices have been made in response to strained public budgets, resulting in regressive fee structures and cutbacks in funding for housing.
The costs of producing housing continue to outpace the ability of people to pay for it. Since 2000, housing development costs have increased by more than 100 percent while incomes are up by only 30 percent. It’s time to stop adding costs to housing and time for government at all levels to understand how policy affects housing and to seek to reduce costs.
If we could decrease costs, the private market could provide homeownership opportunities to a greater number of moderate-income families and more market-rate rentals would be produced, eventually stabilizing rent levels.
As for low-income affordable housing, some level of subsidy is needed. People with low incomes, defined as earning less than 80 percent of median income, account for 40 percent of our population.
Most single-income households with regular jobs fall into this category. Most of these people are in the workforce, and they are increasingly paying more than half of their income for rent.
Unfortunately, the other side of the story for low-income affordable housing is that, while costs continually increase, the availability of assistance has decreased at all levels of government.
Federal direct assistance to housing has been reduced in recent years, which doesn’t leave much if President Donald Trump and Congress decide to do a clean sweep. While the tax credit program, which is a significant benefit to renters of low-income housing, has enjoyed bipartisan support, tax credits will become somewhat less valuable with a lower corporate tax.
California has some programs that provide assistance to specific types of housing including transit-oriented housing, veterans housing and housing for very low-income people with mental illnesses.
More general housing assistance to low-income rental housing and ownership opportunities is gone. Attempts to restore it have been casualties on the Sacramento battlefield.
However, some proposals may have a chance this year.
At the local level, most Sonoma County jurisdictions have some form of inclusionary requirement or affordable housing fee. The county and some cities also raise funding through jobs linkage fees, which are paid by new commercial development. In the past, we had funding from redevelopment zones, and the county and the cities still have funding that they previously lost to redevelopment agencies. We could use this resource for housing as Alameda County has done.
Recently, voters in San Francisco, Alameda, Santa Clara and San Mateo counties have approved housing bonds or tax measures that will provide significant funding for housing. We could consider this option in Sonoma County.