The California Dream Starts at Home

I hear it everywhere I go, and for good reason: the world sees California’s prosperity but it also sees our disparities. Too many Californians are staring at our sky-high economy from the very bottom of the income ladder, while the costs of everyday life in California rise faster than wages. Homelessness and housing affordability strike at the core of this imbalance.

This is a question of who we are. Housing is a fundamental human need — let’s not forget the human face behind the dire statistics. It’s a single mother doing her best to put food on the table and tuck her kids in at night with a roof over their heads. It’s a student striving to maintain friendships and good grades while forcibly shuffled between schools with each move. Housing instability can cause genuine mental and physical adversity, and lead to insufferable decisions: no one should have to choose between paying rent or buying groceries. Knowing that too many Californians face this kind of anxiety breaks my heart.

As Governor, I will lead the effort to develop the 3.5 million new housing units we need by 2025 because our solutions must be as bold as the problem is big.

Let’s consider the facts: the median home value in California is $469,300, and a lot higher in coastal areas. Homeownership rates have dropped dramatically. Nearly half of renters spend a huge proportion of their income — more than 35% — on housing costs and still often live in unsafe and unsanitary conditions. Yet since 2005 California has only produced 308 housing units for every 1000 new residents. Add in the fact that California will be home to 50 million people by 2050, and it’s obvious we’re not on pace to meet that demand.

Simply put, we’re experiencing a housing affordability crisis, driven by a simple economic argument. California is leading the national recovery but it’s producing far more jobs than homes. Providing adequate housing is fundamental to growing the state’s economy. The current housing shortage is costing California over $140 billion per year in lost economic opportunity. Creating jobs without providing access to housing drives income inequality up and consumer spending down. The simple fact is the more money people need to spend on rent, the less they can spend supporting small businesses. Employers, meanwhile, are rightfully concerned that the high cost of housing will impede their ability to attract and retain the best workers.

I realize building 3.5 million new housing units is an audacious goal — but it’s achievable. There is no silver bullet to solve this crisis. We need to attack the problem on multiple fronts by generating more funding for affordable housing, implementing regulatory reform and creating new financial incentives for local jurisdictions that produce housing while penalizing those that fall short.

First, we need to identify new funding to incentivize the creation of affordable housing.

• Bond money has dried up and cities have been stripped of state redevelopment dollars that previously funded affordable housing projects. I applaud the Governor and legislature for taking a historic step toward meeting our challenges, and now it’s up to us to get out and vote for the $4 billion statewide housing bond they placed on the November 2018 ballot.
• California currently provides about $85 million in tax credits to invest in affordable housing. We know this program works, and is often used to leverage federal and other funds by a ratio of two or three to one. By thoughtfully upping our investments, we can exponentially increase our affordable housing output. A state share of $500 million would generate an additional investment of $1.5 to $2 billion in new affordable housing production. We’ll keep a watchful eye to ensure transparency in the spending of these vital taxpayer dollars.
• Undoubtedly, some redevelopment agencies were plagued with corruption, and eliminating them helped bring the state budget back into balance. But it’s incumbent upon the next Governor to get creative about how we plug that hole. Cities across California are turning to Enhanced Infrastructure Financing Districts, allowing them to partner with counties and public agencies to funnel resources to critical infrastructure projects like housing — we will scale these districts statewide.

The rules and regulations governing the affordable housing finance system are set up to fail the “Missing Middle” in California, those whose incomes fall between qualifying for market rate and subsidized housing. We must work with our corporate partners to create workforce housing serving middle-class families and moderate income households.

Solving our housing challenges will require more than just throwing money at the problem. We must build on the important progress made by the Governor and the legislature to streamline and accelerate land use approvals. Yet while streamlining is critical to meeting this challenge, we must also implement stronger tenant protections to prevent people from being displaced.

It’s also time to hold local jurisdictions accountable for housing production. Today, we ask cities to meet housing goals yet offer few incentives to help meet them, and impose few consequences for failing to produce units. Many cities rightfully tell us they have a transportation problem but in reality, it’s also a housing problem. Let’s link transportation funding to housing goals to encourage smart growth.

Cities have a perverse incentive not to build housing because retail generates more lucrative sales tax revenue. The bigger the box, the better, because cities can use the sales tax for core public services. We must revamp our tax system to financially reward cities that produce housing and punish those that fail. Tough accountability backed by financial incentives will unlock the potential for cities to step up their game. This will be a herculean effort, but as a former Mayor who has seen this problem first hand, I’m determined to get it done.

We can’t have a conversation about housing without addressing homelessness. Earlier this month, I stopped by Project Homeless Connect (PHC) in San Francisco, an innovative initiative that pairs homeless individuals with critical services, from vision and dental care to employment assistance. I watched as hundreds of volunteers stepped up and stepped in to one of the most challenging issues of our time, each serving our homeless brothers and sisters with the dignity they deserve. It’s been nearly fifteen years since I launched PHC as Mayor, and I continue to walk away inspired — but I also left saddened.

There shouldn’t be a need for PHC. When I was Mayor, we moved over 12,000 homeless single adults off the streets, out of shelters, and into permanent supportive housing. Yet, the problem persists and pervades communities throughout the state. Homelessness drove the “why” for me when I ran for Mayor, and I’m going to take the issue on with equal intensity as Governor.

We will establish an Interagency Council on Homelessness led by a State Homelessness Secretary, because we need statewide leadership laser focused on this problem. We will fund in-reach services at state prisons to prevent inmates from being released into homelessness, bolster the Housing Disability Assistance Program to provide SSI Advocacy services for chronically homeless adults, and expand social services, health care (including mental health), bridge housing, and permanent supportive housing. We’ve been “managing” this problem for too long; it’s time to solve it.

There is significant work ahead of us to tackle the housing and homelessness crisis gripping our state. But I’m committed to turning the tide, because each new unit built and each individual with a place to call their own is one more person who can feel at home in California.