As housing costs soar, California’s leaders say increasing the supply of affordable homes is priority No. 1 for building a stronger economy and housing the workforce. Bringing rents and mortgages within the reach of working families is critical to maintaining California’s business competitiveness.
Affordable housing organizations throughout California have attempted to meet this critical need, but the state funding we have relied on has continued to dry up.
As head of the largest nonprofit affordable housing developer on California’s Central Coast — Peoples’ Self-Help Housing, active in Ventura, Santa Barbara and San Luis Obispo counties — I want to make the community aware of important statistics and state legislation to provide significant and sustainable financial resources for the development of much-needed affordable housing.
Since 1970, PSHH has been working to bring safe, affordable housing to the Central Coast, where housing rental prices outpace the state average by 50 percent or more. Vacancy rates have fallen below 3 percent in Ventura County, where average rent for all unit types has risen to $1,536 in January 2014, according to a study from the Dyer Sheehan Group.
In Ventura County, the study indicates the countywide rent appreciation rate for the year was 4.7 percent, ranking the region in the top 10 metropolitan statistical areas (MSAs) in the country, and well above the 2.8 percent national rent growth for the year. The strongest year-over-year rental growth for any unit type was in Oxnard/Port Hueneme, where rents for three-bedroom units rose 9.6 percent to a new peak of $2,138.
The state’s poverty rate is the highest in the nation. The situation is worsening now that housing bonds from Propositions 46 and 1C, which supported development by PSHH and other affordable housing organizations, have been exhausted and redevelopment agency funds have been eliminated — leaving the availability of state dollars that leverage private investment and federal and local funds at a historic low.
Since 2007, funding for the development and preservation of affordable homes has plummeted 79 percent, from more than $1.7 billion annually to nearly nothing. This critically threatens housing production and the jobs that go with it.
Failure to act now will leave many Californians without an affordable place to live and make it incredibly challenging, if not impossible, for thousands of California businesses to remain competitive.
Two housing finance bills in the Legislature will kick-start California building again to create jobs and make safe, affordable homes available to Californians struggling to make ends meet. They are AB 1335, introduced by Assembly Speaker Toni Atkins, and AB 35, introduced by Assemblyman David Chiu.
These bills would create a diversified set of housing development funding for affordable homes; help businesses attract and retain the talent that fuels California’s economy; reduce homelessness, resulting in significant savings to taxpayers and reducing strain on our health and criminal justice systems; generate an estimated 29,000 jobs for every $500 million investment in affordable homes; and deploy these dollars in California communities through a successful private/public partnership model.
AB 35 will expand the state’s Low-Income Housing Tax Credit by $300 million annually. Developers will have access to more funding for building developments where the rents remain affordable, and they will be able to leverage additional federal funds (a total of $600 million annually).
AB 1335 will create an ongoing, predictable source of funding to fund the state housing trust fund. Construction of shovel-ready affordable homes can move forward with state investment that developers can combine with local, federal and private financing to make affordable housing development financially feasible.
I urge Californians to support these important bills. Contact your representatives and let them know that affordable housing plays a critical role in the health and viability of our communities.
John Fowler is president and CEO of Peoples’ Self-Help Housing.