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. 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.
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.
As Governor, Gavin 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. Gavin understands that our state will only thrive if every Californian is afforded the opportunity to build a community with a stable roof over their heads.
Housing cannot just be available – it must also be within reach. To spur the construction of affordable housing, Gavin believes we must not only increase our investments in its creation, but also identify sources of new funding. That’s why we must support the $4 billion statewide housing bond on the November 2018 ballot. Moreover, 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. As Governor, Gavin will 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. As Governor, Gavin will eliminate barriers to entry in order to scale these districts statewide.
California is home to innovators – individuals and companies who are spurring our state’s growth, and attracting more residents to the Golden State. However, the rules and regulations governing the affordable housing finance system are set up to fail many of these workers, the “Missing Middle” in California, those whose incomes fall between qualifying for market rate and subsidized housing. Gavin believes California is made stronger by a strong middle-class. That’s why he supports regulatory streamlining to make it easier for the private sector to produce these housing units, and will work with our corporate partners to create workforce housing serving middle-class families and moderate income households.
First, 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. Second, California can provide access to Tax Increment Financing (TIF), an important development resource, based on housing production goals. Third, we can reform the Regional Housing Needs Assessment (RHNA). RHNA helps set housing targets across the state, but the goals are too low and don’t match our statewide housing need. We can recalibrate the goals to mandate greater production. Fourth, many cities rightfully tell us they have a transportation problem but in reality, it’s also a housing problem. We can link transportation funding to housing goals to encourage smart growth.
While streamlining is critical to meeting this challenge, we must also implement stronger tenant protections and expand rent control to prevent people from being displaced. We can do so in a way that still provides incentives for increased housing production. As Mayor, Gavin supported strong tenant protections, rent control and rent stabilization efforts, and ushered the development of thousands of new affordable units.
As Governor, Gavin will create a Regional Housing Appeal Board – providing housing providers and developers recourse against localities who are not following state law. He will also revive the Jobs-Housing Balance Incentive Grants Program, which provides local governments grants to support housing creation. The 2018 housing bond will play an important role in funding this program.
Beyond increasing housing production through incentives and penalties, Gavin understands there are other steps that can be taken to improve access to secure affordable housing. We can implement stronger tenant protections, streamline and accelerate land use approvals to allow faster development, and dis-incentivize lawsuits that discourage development by strengthening the standard of review for housing projects with an affordable housing component that mitigate environmental impacts.
Building upon his experiences in San Francisco, Gavin is committed to supporting Californians experiencing or facing homelessness. As Governor, he will appoint a State Homelessness Secretary to oversee an Interagency Council on Homelessness – 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, healthcare (including mental health), bridge housing, and permanent supportive housing. We’ve been “managing” this problem for too long; it’s time to solve it.