Santa Cruz Supports Affordable Housing Bill

Santa Cruz Supports Affordable Housing Bill

Housing Bill Times Publishing Group Inc tpgonlinedaily.comSenate Bill 5 Would Provide Sustainable, Ongoing Funding for Constructing Needed Homes

Housing Bill Times Publishing Group Inc tpgonlinedaily.comThe City of Santa Cruz announced it supports Senate Bill 5, which establishes a state partnership with cities and counties to provide an ongoing, sustainable source of funding that will allow Santa Cruz to address the affordable housing shortage.

“The housing crisis is a significant problem statewide, and nowhere more critical than here in Santa Cruz,” said City Manager Martín Bernal. “Families are spending so much on housing that it’s crowding out their ability to afford basic essentials, such as food, clothing, health care costs and transportation. Too many families are just one emergency away from being homeless.

“SB 5 will provide a sustainable, ongoing source of funding that cities can use to subsidize affordable housing. What’s important to me and to everyone on the council is to build up the housing stock to get families into homes where they can thrive. SB 5 will us help do that.”

Housing Bill Times Publishing Group Inc tpgonlinedaily.comSB 5 establishes a new, state-backed property tax increment program that provides cities and counties the resources they need to subsidize affordable housing, invest in infrastructure needed to support housing, and to invest in housing near job centers to reduce long driving commutes and bring the state closer to its goals of reducing greenhouse gas emissions and addressing climate change.

When the state abolished redevelopment in 2011, it wiped out the only source of ongoing funding available to local governments to build affordable housing and supporting infrastructure. SB 5 is not redevelopment, but it will provide cities and counties with ongoing funding to support housing and critical infrastructure.

Since the elimination of redevelopment, cities have been struggling to incentivize the building of affordable housing. More and more families have been priced out and the homeless population has exploded. Today, more than 2.2 million extremely low-income and very low-income renter households are competing for only 664,000 affordable rental homes. That leaves more than 1.5 million of California’s lowest-income families without access to housing, forcing many into homelessness.

Specifically, SB 5 allows cities and counties to maintain property tax increment in dedicated zones where they’ve developed a state-approved plan. SB 5 commits to local governments $200 million in tax increment funding annually beginning in 2020, eventually capping at $2 billion annually. Local governments can use the revenue for the following purposes:

  • The construction of affordable housing available to very low, low- and moderate-income families. SB 5 is estimated to create 86,000 new and rehabilitated housing units over the next 10 years. A minimum of 50 percent of funds must be dedicated to housing.
  • Transit-oriented development in priority locations that maximize density and transit use and contribute to a reduction in vehicle miles traveled and greenhouse gas emissions.
  • Infill development by rehabilitating and improving infrastructure and through the revitalization of previously developed, underutilized land in the urban core.
  • Revitalizing and restoring existing neighborhoods.

SB 5 contains strong accountability provisions to ensure funds are only spent on state-approved projects, including:

  • SB 5 creates the Affordable Housing and Community Development Investment Committee empowered with strong state oversight to approve or reject all projects proposed by local governments.
    • Cities must use funding for state identified priority projects including building affordable housing; promoting infill, transit-oriented development; and addressing climate change. Cities have discretion for developing plans to use funding for these priorities.
    • Cities and counties must submit annual spending reports to the Legislature.
    • SB 5 creates a cap on funds available at $200 million annually beginning in 2020 and $250 million annually after 2025. After the program is ramped up, total annual general fund spending cannot exceed $2 billion annually.
    • The Legislature can suspend new plans during fiscal downturns.
    • SB 5 provides state resources to ensure funding for schools and community colleges are not impacted. SB 5 requires that at least one member of the Affordable Housing and Community Development Investment Committee has an education finance background.

While the Governor and Legislature have proposed one-time funding, there is a significant need for ongoing and sustainable funding dedicated to affordable housing, community revitalization and related infrastructure.

SB 5 is supported by a broad coalition of business, labor, local governments, housing advocates, and community leaders.

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For more information, visit www.cityofsantacruz.com

3 Responses to "Santa Cruz Supports Affordable Housing Bill"

  1. Carol Polhamus  May 21, 2019 at 9:30 pm

    But, why must it be funded through a property tax? Making current homeowners housing more expensive to fund other people’s housing makes no sense because it just makes housing more expensive. How about a sales tax? Affordable housing is important to the community and everyone should chip in to pay for it, not just current homeowners.

    Reply
  2. PBinLostAngeles  June 22, 2019 at 1:23 pm

    Nowhere has there been so much hand-wringing over a lack of “affordable housing,” as among politicians and others in coastal California. And nobody has done more to make housing unaffordable than those same politicians and their supporters. Public meetings, task forces and political hand-wringing about a need for “affordable housing” occur all up and down the state, because this is supposed to be such a “complex” issue. Is the solution to unaffordable housing prices in parts of California simple? Yes.
    It is as simple as supply and demand. What gets complicated is evading the obvious, because it is politically painful. One of the first things taught in an introductory economics course is supply and demand. When a growing population creates a growing demand for housing, and the government blocks housing from being built -see “Open Space” and other land use restrictions in CA. for more on this – the price of existing housing goes up.
    State and local government laws and policies have severely restricted – or banned outright – the building of anything on vast areas of land. This is called preserving “open space,” and “open space” has become almost a cult obsession among self-righteous environmental activists, many of whom are sufficiently affluent that they don’t have to worry about housing prices, rent control, or homelessness.
    Some others have bought the argument that there is just very little land left in coastal California, on which to build homes. But anyone who drives down Highway 280 for thirty miles or so from San Francisco to Palo Alto, will see mile after mile of vast areas of land with not a building or a house in sight.
    California voters – particularly property owners and mortgagors – would be wise to press their local, county, and state appointed and elected officials about the nearly 10,000 businesses that have left the state since 2009. Property owners and mortgagors, are just about the only source of revenue remaining, with which to prop up the burgeoning welfare state, the radical environmental agenda, and their tax payer funded pensions.

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  3. PBinLostAngeles  June 22, 2019 at 1:35 pm

    Sixty-six year old Jim Beall – father of the Gas Tax, climbing another .6 cents per gallon next month – is a career politician who has hasn’t held any kind of real job since he was in high school in the 1960’s.
    All this guy knows is tax, tax, tax. A bleeding heart whose policies and taxation have led to nothing but more businesses abandoning the state, higher taxes for property owners and mortgagors, and egregious increases to motor vehicle registration renewal fees.
    The guy is horrible!

    Reply

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