On the Home Front

On November 8, voters in California will consider 17 statewide ballot measures. Direct legislation is more common in California than anywhere else in the country. Cities and counties throughout the state are adding referenda of their own, many of which aim to address housing affordability and homelessness. Ranging from housing bonds to zoning changes, these measures coincide with a heightened public awareness around housing and homelessness as the crisis intensifies in California.

Just last month, the Los Angeles County Board of Supervisors unanimously urged Governor Jerry Brown (D) to declare a state of emergency on homelessness, joining similar efforts by Los Angeles Mayor Eric Garcetti (D) in October of last year (see Memo, 10/5/2016).

California’s homeless population reached 115,000 in 2015, with nearly 74,000 individuals living unsheltered, according to the Annual Homeless Assessment Report assembled by the U.S. Department of Housing and Urban Development (HUD). According to NLIHC’s 2016 Gap Report, there is a shortage of 1,003,110 affordable and available units for extremely low income (ELI) renters—those earning 30% or less of area median income (AMI).

The housing and homelessness crisis has become particularly dire in Silicon Valley region, where skyrocketing housing costs have made the area unaffordable for those who have not benefitted from the tech industry’s prosperity. In response, San Francisco voters approved a $310 million bond last fall for the construction of affordable housing in the city (see Memo, 11/9/2015 and 10/13/2015). Voters in Santa Clara and Alameda counties will decide on similar measures this November.

• Santa Clara County
  In Santa Clara County, a $950 million bond would generate funds to support housing development. The spending plan would allocate $700 million for ELI housing, including permanent supportive housing for those experiencing chronic homelessness and also rapid rehousing for victims of domestic violence and those leaving the foster care system. The plan also calls for $100 million to be allocated to serve very low income (VLI) households with incomes between 31% and 50% of AMI. The final $150 million will support housing for moderate income households, with $50 million dedicated to assist first-time homebuyers.

  To pay for the bond, the county would assess property owners $12.66 per $100,000 of property value. Costing the average homeowner less than $100 annually, the tax increase will retire the loan in an estimated 30 years. The bond has drawn support from San Jose Mayor Sam Liccardo (D), as well affordable housing developers and service providers throughout Silicon Valley. The San Jose Silicon Valley Chamber of Commerce opposes the measure. The group’s president and CEO issued a statement titled “Business is Under Attack,” criticizing a number of taxes and regulations under consideration in Silicon Valley. Among the Chamber’s members are tech giants Microsoft, Apple, Google and Intel, all based in Santa Clara County. The bond measure will require a two-thirds majority for approval.

• Alameda County
  Alameda County’s proposed $580 million bond would invest in affordable homes for low-income renters, provide assistance for first-time homebuyers and create an innovation fund to acquire property and prevent displacement in high-opportunity areas. The spending plan would allocate $460 million for rental housing programs, designating at least 20% of units for households earning 20% or below AMI and ensuring all units have an affordability period of at least 55 years. Like Santa Clara County, Alameda County would fund the bond with a property tax increase of $12.50 per $100,000 of property value. The Alameda County measure, which will also require a two-thirds majority for approval, is supported by East Bay Housing Organizations, an NLIHC member.

• San Mateo County
  Voters in San Mateo County, another hub of Silicon Valley companies like Facebook and YouTube, will decide whether to extend a half-cent sales tax increase by 20 years to fund affordable housing. The original tax, Measure A, was approved by voters in 2012 and has generated more than $80 million annually. Although the county cannot submit a tax extension for a specific funding purpose, the Board of Supervisors intends to allocate the ongoing revenue for affordable housing needs. The Board was also considering a bond measure similar to those in San Mateo and Alameda counties, but polling indicated it would not meet the two-thirds threshold to pass. An extension of Measure A would require only a simple majority.

• Los Angeles County
  Southern California voters will also weigh in on measures dealing with housing and homelessness as the affordability crisis worsens. Los Angeles County has the second-highest homeless population in the country, at 46,874, and 83% of ELI households are severely cost burdened, meaning they spend more than half of their income on rent. City and county officials have begun to publicly commit themselves to ending homelessness, with Mr. Garcetti pledging $100 million in new funding this year. A larger, ongoing source of revenue is needed.

  The city of Los Angeles succeeded in placing a more ambitious measure on the November ballot: a $1.2 billion bond for the construction of housing to serve the lowest income residents. Approximately 80% of proceeds would fund permanent supportive housing and temporary shelters for homeless individuals, while up to 20% would fund affordable housing for ELI and low income residents who are not currently homeless. To finance the bond, property owners would pay between $4.50 and $17.50 per year for every $100,000 of assessed value. That amounts to $44.31 per year for a median-priced home in Los Angeles, with payments retiring after about 28 years. The bond measure will require a two-thirds majority to pass.

  Voters in the city of Los Angeles will also decide on the Build Better LA initiative, which would impose requirements for affordable housing and labor practices on real estate developments that seek waivers from city zoning rules (see Memo, 6/27/2016). Under one portion of the proposal, developments larger than 10 units that exceed regulations such as those limiting building density would have to make at least 5% of units affordable to ELI households. An additional 6% must be priced as affordable at the very low income rent threshold (50% of AMI) or 15% at the low income rent threshold (80% of AMI). The measure is backed by a broad coalition of labor and housing groups including the Southern California Association of Non-Profit Housing, an NLIHC State Coalition Partner.

  The Build Better LA initiative does have some opposition in the broader community advocates. Although the LA County Federation of Labor and several groups representing renters support the measure, it is opposed by the LA Tenants Union, who argue that the policy change would bring more luxury housing than affordable housing and thereby accelerate neighborhood displacement. The Build Better LA initiative will need only a simple majority to pass.

• City of Santa Monica
  Residents in Santa Monica will vote on a half-cent sales tax increase to fund education and affordable housing. A sales tax cannot be dedicated for a specific purpose, so the City Council also placed on the ballot a companion measure that asks if the new revenue should be allocated with half of the funds for each purpose. The allocation referendum is advisory and non-binding, and the extent of the affordability is not clearly specified. The City Council included funding for the school district in order to give the measure a better chance of passage.

Beyond measures to build more housing that is affordable, tenant advocates are taking action to slow the escalation of rents in markets with tremendous scarcities of rental housing. In November, five communities in the Bay Area will consider referenda to adopt rent control policies that will cap annual increases in rent amounts. Advocates in the cities of Richmond, Mountain View, Alameda, San Mateo, and Burlingame collected enough signatures to qualify for the ballot. The referenda in San Mateo and Burlingame are being contested and their respective city councils will decide before the end of August if rent control will be included in November. In the City of Richmond, the rent control ballot measure will serve to counteract the City Council’s repeal of their existing rent control ordinance in November of 2015. More information about rent control initiatives can be found at the Tenants Together website.