Think Big and Act Boldly to Solve California’s Housing Crisis

By State Treasurer John Chiang

***Editor’s Note: Since this story was published, lawmakers have come to an agreement to increase a proposed affordable housing bond to $4 billion. Click here to read Treasurer John Chiang’s statement on the agreement.

Consider these startling and deeply disturbing facts.

One-third of renters in California spend more than half of their monthly wages on housing.

California accounts for 20 percent of the nation’s homeless, while 40 percent of the state’s voters have a close friend or family member who is, or has been, homeless.

Fifty-one percent of California voters say that, at today’s prices, they could not afford an average-priced home in their neighborhood.

And nearly two-thirds of voters have a close friend or family member who has moved away because California housing costs are too high.

This is the human face of a crisis we can no longer ignore. California’s housing shortage is so catastrophic in scale that it not only threatens our economic vitality, but also fuels inequality, poverty and domestic violence, and creates hardship for our veterans. With such a large share of household incomes devoted to housing, Californians are struggling to take care of their basic needs, such as food, medical bills and child care.

Is it any wonder that so many now believe the California dream is out of reach?

That is why I have joined with Advocates for Affordable Housing — a coalition of the building trades, developers and advocates for the homeless, seniors and special-needs Californians — to call for immediate, strong and sustained action to address this problem head-on. I am not talking about incremental steps or symbolic measures, but rather a major, long-term commitment of resources, not diluted by other priorities, but instead focused singularly on solving California’s housing shortage.

After the recent cap-and-trade deal was finalized, there was agreement between the governor and legislative leadership to come up with an affordable housing solution by the end of this session. A legislative solution to the affordable housing crisis would be the capstone on what is arguably already one of the most successful legislative sessions in recent history.

I encourage lawmakers to think big and act boldly to come up with durable solutions to address the housing catastrophe in California. If they do not act, voters will.

Advocates for Affordable Housing recently surveyed likely voters in the state and found strong support for a large statewide housing bond measure. Sixty-four percent favor a statewide bond of $6 billion, and 59 percent support a $9 billion measure.

The $9 billion bond, based on provisions of Senate Bill 3, now before the Legislature, would shelter 570,000 Californians. It would also create a total of 355,000 direct and indirect jobs, of which 132,000 would be construction-related. At $6 billion, bond proceeds would mean shelter for 380,000 Californians and creation of 236,000 direct and indirect jobs, 88,000 of which would be good-paying construction jobs.

During the last seven years, California has witnessed a tremendous economic comeback and sustained prosperity. In fact, we are closing in on being the fifth-largest economy in the world, soon to surpass the United Kingdom.

But what I hear from every economic sector — from high-tech and manufacturing to tourism and agriculture — is that the lack of affordable housing will strangle growth.

And the problem will only get worse, because Sacramento has been MIA on this issue for the last decade. Historic sources of funding to build affordable housing have gone dry — declining by 67 percent since 2008. For example, proceeds from the last statewide housing bond — passed more than a decade ago, have dried up, and what had produced $1 billion annually to be used exclusively for low- and moderate-income housing died with the dissolution of the state’s redevelopment agencies.

So, while affordable housing demand is going up, resources from the state are going down. Meanwhile, the housing shortage has metastasized from problem to crisis to full-blown catastrophe.

Today, we are at a crossroads.

If Sacramento continues to do nothing by squandering these final few weeks of the legislative session, we will continue down a path to a future where nearly every freeway underpass or city park will be turned into makeshift housing. Rent-burdened families will continue to have to make the choice between paying rent or paying for child care. Californians will no longer be able live in the communities in which they grew up or currently work.

Or we can move strongly and decisively to pass a historic affordable housing solution comprised of regulatory reform, a permanent source of ongoing funding and, importantly, a bond large enough to keep the state’s economy on the path of prosperity and help ensure that everyone can share in the California dream.

***This op-ed originally appeared August 20, 2017 in the Orange County Register.