Affordable housing (Photos – Ellie Trevarthen, commons.wikimedia.org, maxpixel.com)
California legislators patted themselves on the back when they passed a housing package this sessions raising money for affordable housing. But these tough votes to hike real estate document fees (SB 2) and place a bond measure on the ballot (SB 3) will barely make a dent in subsidizing the state out of its extreme housing shortage.
By Ethan Elkind
Real estate developer John McNellis runs through the numbers on The Registry, which are pretty shocking in their paltriness, given the scale of the problem:
According to the Los Angeles Times, San Francisco’s 700-unit Hunters View low-income housing project cost $450 million or $643,000 a unit. While appallingly high, that number sounds about right. Thus, if SB2 actually raises $250 million a year, California could add another 388 low-income units annually. And the whole $4 billion from SB 3 would be gone after 6,220 new units. In a state which needs to add 100,000 new dwellings a year just to keep up with its population growth—and not allow the housing crisis to worsen—this is truly spitting in the ocean.
But it gets worse. As McNellis points out, lack of money is only part of the problem. Neighborhood opposition to new affordable projects — which also affects market-rate projects but with more intensity given antipathy to people who need subsidized homes — makes implementation of these projects more difficult:
The problem is you can’t spend affordable-housing money. Last year, the citizens of Los Angeles generously voted to increase their property taxes by $1.2 billion to build housing for the homeless. This year, the somewhat less compassionate Angelenos in Boyle Heights blocked a proposed 49-unit homeless shelter in their neighborhood, a political scenario that has been played out countless times in nearly every city in the state. Tie-dyed progressives, kind-hearted liberals, even Orange County conservatives are all in favor of low-income housing…in someone else’s neighborhood.
Affordable housing advocates would be smart to respond to this dynamic by fighting for more than just more money to subsidize these few expensive projects. Instead, they should be working to lower construction costs overall and reduce neighborhood opposition to new projects, from market rate to affordable ones.
Otherwise, the problem will continue to worsen. And the money we do spend will become increasingly less effective and wasted.
Ethan Elkind directs the climate program at UC Berkeley Law, with a joint appointment at UCLA Law. His book “Railtown” was published by the University of California Press in 2014.
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