Gov. Jerry Brown’s plan to address affordable housing, which he unveiled during a Friday press conference on his revised budget, primarily tries to address the problem by lowering regulations for affordable development. Here’s what he said about his approach:
The general idea is if you want some assisted housing, you're going to have to reduce some of the regulatory burdens that are faced by developers. That's what the idea is.
To get a subsidized rental unit, so-called affordable housing, in San Francisco it costs a $500,000 investment, a subsidy. $500,000. That means 10 people, it's $5 million. A hundred people? $5 billion. So you need more housing. There was a time in the 1970s, I think, the median home price in L.A. was like $65,000. So we need more production that will bring, hopefully, the supply is going to bring down the cost. Otherwise, through subsidies and through restrictions, we're just spending more and more tax dollars and getting very, very little. And the whole program anyway is for very small numbers of people
Some context here. Yes, the governor's math was wrong. But his larger point is that housing subsidies don't deliver enough bang for the buck especially when compared to broader housing supply needs.
Indeed, an affordable housing plan from Assembly Democrats would cost $1.3 billion and produce up to 25,000 units over time. The state's housing need each year is more than 100,000 units beyond what's currently expected to be built, according to various estimates. Brown didn’t include any money in his budget to fund the programs Assembly Democrats wanted.
Affordable housing advocates also would push back against Brown’s take in a few ways. Most experts believe that market-based solutions to affordable housing, along the lines of what Brown is proposing, won't provide enough homes for the state's lowest-income residents. The per-housing unit subsidy that Brown references includes more than state money; advocates want to leverage state dollars to take advantage of federal affordable housing programs that require state investments. And Brown is implying that only one person lives in each affordable unit when units are much more likely to house entire families.
Still, Brown’s overall take lines up with the view promoted by academics and economists that the main issue in California’s housing affordability crisis is the amount regulatory burdens limit the supply of homes, particularly in wealthy coastal areas.
Brown rarely endorses bills still pending in the Legislature, but as part of his housing package on Friday he announced his support for three bills aimed at boosting housing supply. Legislation by Sen. Bob Wieckowski (D-Fremont) and Assemblyman Richard Bloom (D-Santa Monica) would make it easier for homeowners to add a second unit to their property. Another Bloom bill would allow developers to build at higher densities if they include affordable units as part of their projects.
Brown’s endorsements of these bills might get their first test in the Legislature as soon as Monday afternoon. All three bills could see votes on the floors of their respective houses on Monday.