How much can a $4 billion affordable housing bond do?
On Monday, Gov. Jerry Brown and legislative leaders reached a deal on Senate Bill 3 from Senator Jim Beall (D-San Jose), which puts a $4 billion bond for affordable housing on the 2018 statewide ballot.
On Monday, Governor Jerry Brown and legislative leaders reached a deal on a housing package which includes Senate Bill 3 from Senator Jim Beall (D-San Jose).
What is Senate Bill 3?
- SB 3 puts a $4 billion bond for affordable housing on the 2018 statewide ballot.
- Originally, SB 3 called for $3 billion for construction of housing for low-income residents. An amendment added an additional $1 billion toward the Cal-Vet home loan program which would have run out of funds in 2018. The program subsidizes home ownership for veterans.
- SB 3 also allows funding to be used for parks and environmental clean-up to make land hospitable for development.
Housing advocates have supported the bond as a step in the right direction, but opposition says throwing money at the housing crisis is inefficient if we don’t make structural changes to the development process.
We discussed the bill with a supporter and opponent.
Pro Senate Bill 3
Peter Manzo, president and CEO of United Ways of California:
- "This bill would provide ... gap financing for affordable housing construction. We need to keep in mind, though it may authorize $3 billion in funding, that leverages roughly $12 billion in private and federal funding. And that may bring on about 180,000 units over the next few years ... Right now we only have about 664,000 affordable units so this would add roughly about a third more. This is for the whole state ... [and] roughly half the funds would go to Southern California."
- "All the funding is going to support existing housing programs that have a track record, that have existing geographic fairness requirements built into them ... we're not reinventing the wheel here, we're just providing additional funds."
- "One in three families in California struggle to meet the cost of basic needs ... they're spending 50 to 80 percent of their income on housing and that means they're not buying things ... And also for the units we're not building, that means we don't have construction jobs, we don't have all the affiliated benefits that come with that. "
Anti Senate Bill 3
David Wolfe, legislative director of the Howard Jarvis Taxpayers Association:
- "You can't keep throwing money at this problem and expect a different result."
- "[SB 3] is going to cost $200 million a year worth of interest every year for 30 years to pay off ... [a housing bond is not] the best way to [build more affordable housing] ... especially when there's been no regulatory reform to actually lower the cost of providing homes."
- "What do taxpayers get in exchange for taking on more debt? ... We're not incentivizing the growth and development of new housing in exchange for a bond. If that were there, we'd probably remove our opposition."
The deadline for the bill to pass is September 15, but it could be voted on as early as Friday.
To listen to the full interview, click the blue playhead above.
Peter Manzo, president and CEO of United Ways of California
David Wolfe, legislative director of the Howard Jarvis Taxpayers Association