Can feds help ease housing crisis in Bay Area and beyond?
As housing costs spiral up faster than worker incomes, U.S. Rep. Mark DeSaulnier thinks federal housing policy could use a shot of Silicon Valley innovation.
The Concord Democrat has introduced a bill to create a new federal Office of Housing Innovation to provide grants across the country for local housing plans, oversee pilot projects for housing development and foster community discussions about smart planning and growth.
The proposal comes as housing prices continue to set records in California and climb in many parts of the country. While other regions are not yet at Bay Area extremes, DeSaulnier said working families across the nation are running out of affordable housing options, making commutes longer and pushing the country to the brink of a housing crisis.
“Policy makers have to understand the urgency of now,” he said.
The Office of Housing Innovation would have a $100 million annual budget to create and manage grants to local governments, universities and nonprofits seeking to grow and diversify housing supply.
Lack of supply in California is the major driver to record-setting prices. The Bay Area created about six times as many jobs as new housing units between 2010 and 2015, according to a study by the Silicon Valley Leadership Group. Median home prices in the region have soared past $1 million in San Francisco, San Mateo and Santa Clara counties.
Rents and home prices have risen much faster than median income, according to federal statistics. Since 1960, the median income of renters nationally has risen 5 percent, while rents have increased by 61 percent. Homeowner incomes nationally have risen 50 percent, but home prices have more than doubled in constant dollars.
DeSaulnier said a similar federal program in the Department of Transportation has aided Bay Area transportation planning. In housing policy, he sees opportunities to expand available housing through converting existing properties, building accessory dwelling units and encouraging formal planning sessions where community members can find compromises on major local projects.
“This is a start,” he said. “I wish we could do more.”
State policymakers have debated whether cities and towns - largely in control of how much and what kind of housing gets built - have too much power to choke new construction.
But California voters this year sent mixed signals about government involvement in housing policy. Voters rejected Proposition 10, which would have allowed cities to bring rent control to more units, but passed bond proposals to fund affordable housing.
Amie Fishman, executive director of the Nonprofit Housing Association of Northern California, said the federal government has always played a large role in developing housing policy for the country.
The federal government backs mortgages, helps veterans secure home loans, and funds affordable housing for the poor, among other programs.
Innovations such as the standard 30-year fixed mortgage and the new roads and highways that enabled the growth of suburbs were developed at a national level, she said.
Fishman believes Washington now could encourage innovation in construction, transit-friendly development and new ways to fund and build affordable housing.
“It's a national issue, but we've been at the tip of the spear in the Bay Area,” she said. “We need to do big solutions.”
Kevin Zwick, CEO of Housing Trust Silicon Valley, said the DeSaulnier bill offers a welcome incentive to municipalities to plan for future population and housing growth.
Zwick noted that regulations enforced under President George W. Bush gave a push to counties to establish 10-year plans to counter chronic homeless. The federal program boosted the work of local homeless agencies across the Bay Area, he said.
But other incentives, including tying federal transit money to local development, also should be considered to get cities to build more homes, he said. “A lot of good can happen at the local level when the federal government sets goals,” Zwick said.
He added that the new Congress, with the House of Representatives led by Democrats, should be more willing to invest in infrastructure and housing priorities.
A new federal housing initiative could spread beyond ideological boundaries. Edward Pinto, resident fellow on housing policy at the conservative American Enterprise Institute, said the federal government should approach the housing shortage with caution and humility.
Federal housing policy, he said, has tried and largely failed to solve the problem of affordable housing since the 1930s. Pinto favors allowing municipalities to choose from a toolbox of policies and planning measures to address specific community needs.
“California has a lot of policies,” he said. “The result of virtually all of them has constrained supply.”
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