This week Governor Newsom put his housing priority into his budget with proposals for sweeping changes which would include $750 million for local governments for housing – a figure that includes $250 million for planning.
He would completely revamp the state’s RHNA (Regional Housing Needs Allocation) and Housing Element process under the authority of HCD (Housing and Community Development).
He writes, “HCD will be taking a more active role in housing element reviews. Moving from an advisory role, HCD will now oversee and enforce regional housing goals and production. HCD will determine a methodology for allocating housing needs to regions and local jurisdictions, with local input.”
This is also $500 million for the development of moderate-income housing, a vastly expanded state low-income housing tax credit program, a proposal that would use the state’s own surplus property for affordable housing and changes to the Enhanced Infrastructure Finance District program, including eliminating the voter requirement and pairing EIFDs with federal Opportunity Zone investment opportunities.
However, the governor did stop short of proposing a new tax-increment program – the son of RDA – to benefit housing.
“This is a crisis,” Governor Newsom said. “We’re simply not developing enough housing units.”
Governor Newsom said he also wants to restructure the way California sets housing goals to make them “more realistic and more nuanced.”
His proposal also comes with a stick, a big one – he proposes to withhold transportation funds from local governments that fail to achieve housing production goals.
“If you’re not hitting your goals, I don’t know why you get the money,” Governor Newsom said, referring to the roads and bridge construction dollars available under the 2017 state gas tax increase. Other transportation funding could be withheld as well.
There was pushback from lobbyists on this. For instance, the AP reports that Darby Kernan of the California State Association of Counties said tying gas and vehicle fee hikes to housing money isn’t the right idea.
She also said withholding money from counties isn’t fair.
“We can do all of the steps there are to plan for units, but we don’t build the units,” she said. “That is private industry, and so threatening to withhold our critical transportation dollars for something we don’t actually do, that is concerning.”
There is real promise in terms of funding for affordable housing and homelessness.
The governor’s report notes “a lack of affordable housing directly contributes to the increased homelessness seen across the state. More must be done to increase housing production across the state to ease this crisis and give more Californians the opportunity to become economically secure through reduced housing costs, and achieve the dream of homeownership.”
CALmatters noted: “It takes a lot of money to build housing reserved for lower-income Californians — roughly $330,000 per unit, by one estimate. Affordable housing and homelessness advocates have been complaining for years that they are receiving nowhere near the level of financial support they need from the state.”
However, the governor’s budget provides for “a major infusion of more than $1.7 billion in one-time and ongoing affordable housing cash.”
“I have never seen this kind of attention paid in the budget to homelessness and affordable housing issues,” said Anya Lawler, a housing policy advocate for the Western Center on Law and Poverty. “Just the page count alone is a little unprecedented.”
The governor is also attacking homelessness. He announced plans to appoint a “homelessness czar” as well as expedite construction of homeless shelters.
“Homelessness is not a local concern in a few big urban centers, it’s not just a regional concern in urban metros, it is a statewide concern,” Governor Newsom said. “Everybody has an obligation to step up and step in and do their job.”
To achieve the housing goals, Newsom also advocated streamlining the review process, especially for new homeless shelters.
“I know it’s also controversial, but seriously, if you can create CEQA waivers to expedite stadium projects, and we do all the time, we sure as hell should be able to do that for 130,000 souls that are out on the damn streets and sidewalks in this state,” he said.
Kathryn Phillips, director of Sierra Club California, said the organization generally opposes “jamming” reviews through the court system. But she said that addressing homelessness doesn’t have the “luxury of time.”
—David M. Greenwald reporting