By David M. Greenwald
Executive Editor
San Francisco, CA – California is facing an unprecedented housing crisis. On Wednesday, former Fox News host, Steve Hilton, announced that his organization Golden Together is launching a new California voter initiative for the November 2024 ballot called the California Homeownership Affordability Act which aims to tackle the state’s housing crisis.
He offers a different approach from what we have seen from a heavily Democratic legislature. The initiative is looking to jump-start housing production and, as the San Francisco Chronicle put it, “It is guaranteed to be a conversation starter, if nothing else, in deep blue California.”
“California has the highest housing costs in the nation and the lowest home ownership,” Hilton said. “Housing is the #1 reason people give for leaving the state. One-third of Californians can’t meet their basic needs, and the lack of affordable housing at lower income tiers is a major pipeline into homelessness.”
He explained, “There have been over 100 pieces of legislation on housing in the last five years, but we are nowhere close to meeting demand, or the promise of 3.5 million new homes that was made five years ago.”
As the initiative notes, “Despite hundreds of changes to housing laws since the Legislature first declared a severe housing shortage in 1982, California continues to suffer from a housing affordability and supply crisis that has harmed millions of hard working Californians who cannot afford to buy a home, live where they grew up near parents and grandparents, afford the ever-increasing cost of living in California, or afford to continue to pay for housing ‘solutions’ that worsen homelessness, substance abuse disorders, and perpetuates crime and public disorder.”
It adds, “The combined effects of decades of California’s laws and regulations has made it about three times more expensive to build a home in California than the rest of the country.”
Which is why California lags behind the rest of the country in home ownership.
However, “Affordable rental housing, including for lower income households, has largely vanished from many communities.”
Indeed, the initiative notes, “The cost of building even one new ‘affordable’ apartment for a low-income family now exceeds $1 million in many of California’s most wealthy communities.”
In short, “California’s housing policies have failed.”
The California Homeownership Affordability Act will accomplish three objectives:
1. Restore CEQA: The biggest barrier to building the new homes we need is the abuse of the California Environmental Quality Act (CEQA) to file nuisance lawsuits on bogus environmental grounds. When it was passed, CEQA did not even cover housing, and yet California finds itself in a situation where just between 2019 and 2021, around one million new homes that had been approved for construction by state and local government were blocked by bogus CEQA lawsuits.
This Initiative would eliminate CEQA abuse by ending the “private right of action”—only county DAs or the state Attorney General would be able to file CEQA lawsuits.
Why should anyone be able to sue to stop housing being built, if it has already been approved and complies with all existing environmental regulations?
2. Cap Impact Fees: One of the main drivers of astronomical housing costs is the explosion in so-called “Impact Fees” being charged on new housing construction. These are effectively a tax on house-building and create an incentive for only expensive homes to be built.
For example, the fees charged for building an apartment in San Francisco have been as high as $300,000—even before the cost of land, labor, materials, etc.
This Initiative will cap fees at 3% of the combined construction and labor cost of a new home. The cap would not include fees for schools, or to connect to utilities. The 3% cap would comprise state agency compliance fees capped at 1% and local fees at 2%.
This would dramatically reduce the cost of new housing and incentivize the building of genuinely affordable homes through the market.
3. Construction Worker Housing Fund: To address the shortage of construction workers, which also contributes to rising costs, our proposal includes a new fund, financed by a small portion of Impact Fees, to create a down payment assistance program to help construction workers buy their own home if they commit to staying in the industry in California.
Click here to view and download the initiative as filed.
If passed, this iniative will allow for the building of housing almost anywhere in California without paying even the most needed of fees for civic infrastructure.
The outcome will be the the bankruptcy of many of our jurisdictions.
And for me, there is no guarantee written into the initiative that housing for very low income, low income and moderate income families will be built. Under this initiative, the housing industry will build only housing on which they can make a profit. You cannot make a profit on housing you have to continually subsidize.
If passed, the outcome would be a tragic economic explosion of the California economy.
My own thoughts and not representative of the Twin Pines Coooperative Foundation or Neighborhood Partners, LLC.
It’s kind of the Prop 13 phenomenon. If you don’t fix the problem the right way, someone will come along with an “easy” fix that causes a lot of problems on the back end. This is now the shot across the bow to localities and the state to fix this or they are going to get something more draconian passed by fed up voters.