As I look out the window of my California Housing Finance Agency office in downtown Sacramento at 5 p.m. on a Wednesday, I see a lot of cars.
Filled with public employees, teachers, nurses and construction workers, the cars aren’t going to nearby homes. They are lining up to jump on the freeway and drive to the distant homes their drivers can afford. These are middle-income, working families who can’t find housing in the region’s most important job center. And this isn’t just a Sacramento problem, it’s a California problem.
While it’s no secret that our state is in a housing crisis, what isn’t as widely known is that the crisis is affecting people with good, stable jobs. Even those making 120 percent of their area’s median income – $91,000 for a family of four in Sacramento and $77,750 in Los Angeles – are having trouble finding an affordable place to live.
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In downtown and midtown Sacramento, housing is getting built, but none of it is affordable for the moderate-income group that we call the “missing middle.” According to a recent study by the Capital Area Development Authority, of the 12,848 units set to be built in the central core, only 26 are designated for families making between $61,000 and $91,000 a year.
For comparison, 931 of those units are planned as low-income and nearly 12,000 will be for families with incomes of more than $91,000 a year.
We see comparable numbers in major job centers across the state. It’s why state Sen. Toni Atkins and her co-authors included language in Senate Bill 2 – signed by Gov. Jerry Brown as part of the affordable housing package – making funding available for moderate-income housing. Starting in 2019, some SB 2 funding will be coming directly to our agency so we can serve more middle-income Californians.
To use that funding most efficiently, we must seek partnerships. We will provide more “gap financing,” in conjunction with our competitively priced permanent loans. To local governments, gap financing is often the final piece that makes deals work.
Last year, CalHFA and its partners helped finance more than 2,000 housing units for low- to moderate-income Californians. The SB 2 funding will help create between 750 and 1,500 more units of moderate-income housing. The housing for the “missing middle” will not come at the expense of low-income renters or the homeless. The goal is to increase housing at all income levels.
When we help develop housing that people can afford and lower rents, it doesn’t just make their lives better, but boosts California’s economy as a whole. With less being spent on rent, it leaves more money to spend at local businesses and increases tax revenue.
Tia Boatman Patterson is executive director of the California Housing Finance Agency. She can be contacted at email@example.com.