Gov. Gavin Newsom calls high housing costs “the original sin in the state of California.” Now we’re finally getting serious about redemption.
A flurry of public policy activity has housing advocates hopeful that real progress is underway. Even Congress, which tends to stay out of the housing debate, has acted.
Other than the Federal Reserve periodically lowering interest rates, there hasn’t been much done nationally to make housing more attainable. Most housing policies are set at state and local levels.
In June, President Donald Trump put his stamp of sorts on the issue by abruptly canceling his signing ceremony for a rare piece of bipartisan housing legislation that could move the needle in favor of consumers.
The bill, which became law without his signature, gives Republicans and Democrats an affordability issue to run on in November. The proposal was sponsored by federal lawmakers at opposite ends of the political spectrum: liberal Democrat Sen. Elizabeth Warren of Massachusetts and Trump ally Republican Sen. Tim Scott of South Carolina.
The bill contains an important provision. It prohibits “large institutional investors” from buying single-family homes and apartments, and renting or selling them at a higher cost.
In his final State of the State address in January, Newsom called out the practice, decrying “institutional investors snatching up homes by the hundreds and thousands at a time, crushing the dream of home ownership, and forcing rents too damn high for everyone else. It’s shameful that we allow private equity firms in Manhattan to become the biggest landlords in many of our cities.”
The original provision has been watered down, but it’s still progress, one of the most promising pieces of federal housing legislation in years.
Closer to home, there’s lots of activity on housing, including:
• As of July 1, when California’s Senate Bill 79 took effect, the state can override local zoning laws and allow taller, denser residential development than some cities previously permitted near bus stops and transit stations.
• In July, Sacramento received $32 million from the state for a 100-unit “tiny homes” project for homeless people in South Hagginwood. Half are earmarked for homeless veterans with mental health problems.
• On the November ballot, California voters will consider a record $11.25 billion bond for affordable housing. The measure includes $350 million split among UC and CSU campuses.
• In Sacramento, the city is considering several zoning changes, including a cut in zoning types from 13 to four, to reduce red tape builders face in constructing housing. Two years earlier, Sacramento became the state’s first city to allow multi-unit housing in neighborhoods zoned only for single-family homes.
• California is cracking down on cities that lag on new home construction, recently suing Calexico, Costa Mesa, Half Moon Bay, Ridgecrest and Turlock for allegedly failing to adopt housing plans required by state law. Housing advocates hope strong state action will serve as an incentive for communities to do more.
• Also in July, Newsom signed legislation to modernize the housing finance system, streamline project approvals and reduce the cost of building affordable housing by an estimated $60,000 to $70,000 per unit. The Legislature created a new Disaster Rebuilding Fund and earmarked $100 million to lower financing costs for homeowners rebuilding after disasters.
None of these moves is enough to solve the housing problem. But taken together they should make a difference and encourage officials to keep at it.
Gary Delsohn can be reached at gdelsohn@gmail.com. Follow us on Facebook and Instagram: @insidesacramento.
