Capitol Alert

Assembly Democrats seek $1.3 billion boost for affordable housing

Assembly Democrats hoping to alleviate California’s affordable housing crunch are asking Gov. Jerry Brown to sign off on more than a $1.3 billion boost.

Multiple metropolitan areas in California consistently rank among the nation’s priciest for real estate, and many cities are struggling to serve large homeless populations. A loss of redevelopment money and the drying up of housing bond money have exacerbated the problem, policymakers say.

“People literally cannot afford to live where they work, and some folks can’t afford to live in any community at all,” said Assemblyman Tony Thurmond, D-Richmond, pegging the need at about 150,000 new units a year.

Now Democrats are proposing a massive outlay of local grants and tax credits aimed at building or updating lower-cost housing, including multi-family rental units, homes for farmworkers and units with supportive services for homeless people. They said a sizable budget surplus justifies the one-time funding package.

Gov. Jerry Brown’s 2016-17 budget proposal contains a combined $376 million for the Department of Housing and Community Development and California Housing Finance Agency. Another $400 million is budgeted for housing and transit out of a swelling cap-and-trade fund that is filled by businesses purchasing permits for carbon emissions.

A spokesman for the Department of Finance declined to comment on the legislative Democrats’ proposal.

Budget talks will heat up in earnest in May, when Brown presents a revised budget proposal reflecting this year’s tax revenue. Assembly Speaker Anthony Rendon, D-Paramount, who will play a central role in the negotiations, appeared at Monday’s press conference to throw his support behind the housing package and warn that “housing costs are one of the key threats to our economy.”

“Every state budget is a balance of priorities and resources,” Rendon said, “and as we move forward crafting the budget, we will continue to push for things like affordable housing, combating poverty, early childhood education and college affordability.”

Despite dire warnings about an affordable housing shortfall, legislators have made little headway lately with legislation to increase supply.

Perennial attempts to tweak the California Environmental Quality Act, which many developers blame for the slow pace of building, have collapsed. A bill to fund a dedicated housing fund introduced by former Assembly Speaker Toni Atkins, D-San Diego, a longtime housing advocate, went nowhere. A $100 million annual housing tax credit expansion was vetoed.

In vetoing the housing tax credit bill, Brown wrote that such credits “need to be considered comprehensively as part of the budget deliberations.” Assemblyman David Chiu, D-San Francisco, who authored that bill and championed this year’s package, including a $300 million low income housing tax credit measure, said this year’s request deferred to Brown’s preference to talk taxes during budget negotiations.

“He wants the housing conversation to be part of the budget process, and we have heard loud and clear that if it’s a priority of the Legislature during the budget process, that is something the governor and his staff will consider,” Chiu said.

Responding to the Democratic package, Assemblyman Marc Steinorth, R-Rancho Cucamonga, argued that legislators should instead be working to find solutions that do not require more tax dollars.

“We need innovative and market-friendly solutions to this housing crisis,” Steinorth said in a statement. “We should encourage cities – even suburban ones – to focus on increasing housing supply, rather than tie their hands with out-of-date regulations and restrictions that hurt everyday Californians.”

Jeremy B. White: 916-326-5543, @CapitolAlert