Capitol Alert

With renters struggling, California still needs 1.4 million more affordable units, report finds

Despite recent laws and new funding to boost housing construction, California still needs 1.4 million more affordable rental units, according to a report out Thursday.

Of more than 2 million very low-income renter households in California, roughly two-thirds are severely cost burdened, meaning they spend more than half their income on rent, according to a report by the California Housing Partnership.

That news comes two years after the Legislature passed a slate of bills to expedite construction and subsidize affordable housing. Those new laws range from measures to streamline development to a new fee on real estate transaction documents to subsidize housing.

Lawmakers at the time characterized those policies as first steps. Thursday’s report underscores how much further the state must go to solve its housing shortage, said California Housing Partnership president Matt Schwartz.

The California Housing Partnership, a nonprofit funded by charitable organizations including the Wells Fargo Foundation and the Chan Zuckerberg Initiative, looked specifically at low-income families to determine how many were spending a high share of their income on rent. High housing costs are a primary reason low-income households in California can’t afford other living expenses, such as food and child care, according to the report.

The report also calculates that the state spends nearly $14 on homeowners in the form of real property and mortgage interest tax deductions for every $1 it spends on renters.

The report calls for the state to give $1 billion annually to cities and counties to fund more housing. It also calls for more tax breaks to help low-income families.

Read Next

Gov. Gavin Newsom has made increasing the supply of affordable housing in the state a signature issue, setting a lofty goal of 3.5 million new homes. He’s rolled out an array of proposals to address the issue, from withholding road repair funds from cities that lag on their housing goals to spending $1.75 billion to entice communities to build more.

But so far, Schwartz says Newsom’s plans don’t do enough to help low-income renters who can’t afford market-rate homes.

“We welcome the governor’s initiatives to expand overall market production,” Schwartz said. “But the point this report makes is you can’t forget about the people who won’t be able to afford that housing.”

Tia Boatman Patterson, Newsom’s senior housing adviser, disputed that characterization, saying the governor’s proposal includes tax credits to help low-income Californians, as well as to spur construction of mixed-income housing. Newsom’s proposals aim to create affordable housing for all income levels, she said, and is intended to complement the laws passed in 2017.

“At the end of the day, it’s all about supply and building of housing,” she said. “There’s not enough resources to fund our way out of this.”

Related stories from Sacramento Bee