Sunday Commentary: Will SB 50 Solve the Housing Crisis? How Can We Increase Affordable Housing?

Senate Bill 50 is back… again… for the third time.  It is controversial, with opponents arguing that it takes away local control while supporters argue that it is designed to increase housing production by increasing density near public transportation and job centers.

Under SB 50, cities will not be able to limit density near job or transit centers and will be required to allow small and mid-size apartment buildings.

When Senator Scott Wiener held a press conference in Oakland this week, they were besieged by protesters.  The senator agrees that California has a 3.5 million housing shortage.  That is something that the protesters last week undoubtedly agreed on.

As Oakland Mayor Libby Schaaf put it, “[E]veryone agrees on one thing, and that’s that there’s a housing crisis in California.”

The protesters here are not the people we see in suburban communities worrying about the impacts of zoning changes on their property values or quality of life.  Instead, they are vulnerable renters and their advocates, pushing back against SB 50 based on concerns that the measure would exacerbate gentrification in cities like Oakland.

Senator Wiener believes that his bill has long included safeguards against the displacement of existing affordable housing.

After the event, he said that he respected the protesters and said, “It’s a moral failure of our society that we have mothers with children who are homeless. It’s a moral failure that we have anyone who is homeless. … SB50 will help.”

While the protesters here have significant and legitimate concerns, Senator Wiener would also point out that the fierce opposition to the bill is mostly coming from local officials in wealthy enclaves such as Palo Alto, Cupertino, and Beverly Hills.  As the Chronicle points out in an editorial, their opposition is due to the fact that “it would force them to allow higher-density development in exclusively zoned neighborhoods near mass transit and jobs.”

The Chronicle argues: “It’s the lack of housing production in such areas that forces a disproportionate share of construction, speculation and gentrification into Oakland.”

The Chronicle points out that the amendments which will allow cities to have up to two years to develop their own plans to allow new housing before its provisions would take effect should “answer the frequent objection that the measure usurps cherished ‘local control’ of how and where development takes place.”

However, they note that “in many cases… it won’t.”  They write: “That’s because those calling for local control of residential construction are often more interested in preventing it altogether. Their success in doing so is what gave California the worst housing shortage on the U.S. mainland and a quarter of the nation’s homeless population.”

Producing Affordable Housing Locally

Locally some of the bigger debates we are likely to have is where to put the housing and whether Measure R and its impending renewal are likely to prevent new housing.  It is worth noting, however, that even in places like Davis there has been a sea change in views on the need for housing – with polling showing the public sees the lack of housing and lack of affordable housing (both big “A” and small “a”) as the biggest issues facing this community.

Critics will naturally call for more affordable housing – which is clearly a huge need for this community.  The problem is that in the post-redevelopment era, how do you get that affordable housing?

Without money coming from the state, it is likely to have to be attached to market-rate housing.

Under redevelopment, the city was able to have a 35 percent requirement for affordable housing.  In post-redevelopment, the city has reduced its requirements to 15 percent – in line with state requirements.

At a recent social services commission meeting, Brett Lee explained that in order to go above 15 percent, the city would be required to explain in great detail their justification.  The problem as he explained, to “have a high requirement means nothing got built” and he used the Marin County example of many communities that used the high measure to ensure that nothing actually got built.

Sherri Metzker noted that the change in the percentage “had to do with the loss of redevelopment funds.”

The impact of the loss of RDA should not be discounted.  I saw an article which noted that in 2011 San Francisco generated 207 affordable housing units which accounted for 59 percent of all housing built that year.  That was toward the tail end of the real estate crash.

In 2014, three years later, the market rebounded with 3454 housing units built in the city – 490 were affordable housing units.  That was 14 percent of the total.

What happened?  What happened is rather simple – in 2011, the only housing that could be built, just about, was built with redevelopment money.  In 2014, the market generated the bulk of the housing, but the result was that they were only able to produce 14 percent of the units subsidized.

Can we do better as the social services commission attempted to argue for?  I think we can.  But it’s going to take funding – or possibly land – to do so.

First, we need the state to fund affordable housing at levels they did prior to the loss of RDA funding.  The state has passed a lot of bills about housing and affordable housing, but without providing a steady revenue stream, this seems like a losing battle.

Second, we need to re-examine the ability to do land dedication sites.  We learned again that land dedication sites work.

Earlier this week, we saw this illustrated quite clearly as Mutual Housing is announcing that they have been awarded over $20 million for two projects – one of which is on the 5th Street project in Davis, the affordable housing portion of Sterling.

That site will provide 38 apartments, 17 of which will be set aside for youth who are transitioning out of the foster care system yet still offered transitional supports through the Yolo County Health and Human Services Agency. The other 21 apartments will house working families with incomes ranging from 30 percent to 40 percent of the area median.

This follows around a $2 million commitment from the market-rate housing complex at the same location.

This is an affordable housing formula that still works.

Last year, we covered the story of Creekside, the last parcel of affordable housing within the Mace Ranch Development.

After a competitive process, Neighborhood Partners, partnering with a number of groups including Davis Community Meals, won the project bid in 2015.

Creekside, according to David Thompson of Neighborhood Partners, was able to secure $34 million in funding by November. That funding included a $11.8 million grant from the state’s Affordable Housing and Sustainable Communities program, which uses revenue from the Cap-and-Trade Greenhouse Gas Reduction Fund to support affordable housing.

The same developers are hoping to follow a similar formula to success at the affordable portion of the West Davis Active Adult Community, which is expected to become the largest affordable housing project in the city – serving low-income seniors.

While redevelopment is gone, David Thompson continually pointed out during the Measure R process that land dedication remained a viable route to fund the building of affordable housing.

The catch, of course, is you have to have a large enough project to be able to dedicate the land for it. With land dedication sites and the re-establishment of funding streams, it seems more likely we can meet our affordable housing needs in this community – and perhaps across the state.

—David M. Greenwald reporting