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A Note from our Executive Director
Like many of you, I've watched with great anguish as wildfires sweep through our state, destroying entire neighborhoods and devastating the lives of families and seniors in a matter of a minutes.
Our hearts go out to the many people who have lost family members and their homes, and the thousands of families and seniors who are suddenly displaced, particularly those in Sonoma County communities. There are seemingly endless stories of people who can't begin to think about out how they will start over and find an affordable home.
I was particularly struck by that news story from Hart that explained how California's devastating wildfires and the state's housing crisis are now profoundly intertwined. Much like other areas of the state, the Sonoma County region's vacancy rate is just around 1 percent, leaving limited options for people until their homes are rebuilt or for renters looking for a safe place to stay.
It goes without saying but bears repeating: Having a safe home is the foundation of our daily lives. A crisis that leaves thousands of children, families and seniors suddenly without a home brings that into stark focus.
Never could we have predicted that a wildfire or crisis of this magnitude would devastate the lives of so many so quickly. What we are keenly aware of as affordable housing leaders is that every day
low- and moderate-income Californians find themselves on the brink of crisis and in need of safe, affordable homes.
With attention, rightfully so, on California's wildfires and the lasting implications for residents in Northern California, it's hard to believe it was less than a month ago that Governor Brown signed a historic housing package to invest in affordable housing. While we continue to commend the significant strides California is taking, I believe it's also our job in the times of crises to keep educating and reminding our elected leaders that work continues to ensure every Californian has a safe, affordable place to call home.
Sincerely,
Ray Pearl
CHC Executive Director
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Federal Update from David Gasson, Boston Capital
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We have reached that point in the seemingly endless debate over tax reform when reality hits us that it might just happen. Whether you go by the alignment of stars or ducks in a row, it seems the pieces are falling into place for something substantial happening on the tax front. To my friends in the industry who begged me to put a fork in the reform effort months ago, this is why I hesitated. Why did I hesitate? It is not because I see tax reform as a bad idea. To the contrary, we do need to simplify our system but not in a way that penalizes economic engines like the LIHTC or goes down rabbit-holes which time and experience have proven to be false theories of growth. In short, what I fear is bad policy for the sake of politics and this often happens when you go it alone and do so under the pressure of artificial deadlines.
As of the drafting of this update, the House is poised to accept the FY 2018 Budget as passed by the Senate, without the usual conference committee process by which the two very different budgets would be negotiated into a single product. Why would fiscal conservatives in the House agree to approve a budget more the $200 billion more expensive than the one passed in the House? The politics and lure of once in a generation tax reform. Without getting into every aspect of what tax writers may propose holistically in their final tax reform legislation, I will focus on my concerns as they relate to affordable housing.
We are very pleased that the Big 6 working group included the LIHTC in their tax reform framework. Our industry has been making the case for many years as to why this is appropriate and necessary. What we are unsure of is what the tax writers may do to the program to fit it within their vision of reform, including how they might change the LIHTC to raise revenue for their base broadening goals. You may recall that then Ways and Means Chairman Dave Camp (R-MI) maintained the LIHTC in his tax reform proposal, but did so it a way that severely hindered our ability to produce affordable housing. We met with tax writing staff after that exercise and explained why this was the case but we are not at all confident that the current staff might not revisit that proposal as they draft the new legislation. Our efforts for some time have been focused on maintaining and expanding the programs ability to produce housing but when politics gets in the way of good policy, those arguments can easily be drown out for the sake of raising revenue. We are working on getting details of the tax reform proposal and hope our fears are unfounded. Either way we are prepared to advocate for a robust LIHTC that substantively addresses the affordable housing crisis.
Another area of concern is the continued silence within the tax proposal on private activity bonds. Bonds make up a significant portion of affordable housing production which we have made known to Members of Congress and tax staff. While housing bonds have not been a target for legislators other industries have come under scrutiny for how they utilized PAB's. We continue to follow this debate and will be watch closely to see if and how they deal with PAB's in the tax reform legislation.
This debate will pick up steam and momentum in the coming weeks as the House would like to vote on the tax reform legislation before Thanksgiving. It is possible the timeline may move even faster. The Senate will be more deliberative as issues of deficit spending, senate rules and political complications weigh on the debate. That being said, Republican leadership would like to have tax reform tied up in a pretty bow by the holidays so stay tuned and be prepared for a fast and wild ride.
Thank you,
David Gasson
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Affordable Housing in the News
Many elected officials and our own members made the rounds in local media and public forums this month sharing what we hope to achieve with the historic housing legislation signed just weeks ago by Governor Brown. Talking about the importance of SB 2, President/CEO of Abode Communities and CHC Boardmember Robin Hughes told The Real Deal Los Angeles: "The thing about these funding sources is that they allow affordable housing developers to address a range of housing needs, to blend or layer the funding together." Assembly Member Richard Bloom, author of AB 1505, talked with Santa Monica Next about the specific bills and why this year was a major turning point, even as more work lies ahead: "I think the most significant thing is that there is no longer any doubt whether the legislature sees the housing crisis as exactly that. I think we kind of turned a corner." "In this session, the legislature and the governor kind of staked out that ground and fully acknowledged that we're in the throes of a pretty serious crisis," Bloom said.
Backing Bloom's point that more work lies ahead, local and national studies this month showed the incredible housing pressure peoples
still face. A
study released by the UC Santa Cruz Department of Labor Studies found nearly 70 percent of those surveyed are overspending on rent and utilities, and 57 percent reported they had a rental problem but more than half did not report it for fear of eviction or retaliation. On the national level, the Washington Post highlighted a report detailing the country's dramatic 60 percent drop in affordable housing stock from 2010 to 2016. Focusing on California, the story said "the poorest households were already shut out of the rental market before the period covered by the report. And those on the next level up were quickly being squeezed out. In California, 56 percent of apartments were affordable for low-income families at first financing, compared to 10 percent upon second financing.
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CHC Spotlight
Congratulations
to Laura Archuleta, President of Jamboree Housing and CHC Boardmember, for being awarded the
Lynn Jacobs Memorial Affordable Housing Award by the BIA's Los Angeles/Ventura Chapter.
The annual Lynn Jacobs Memorial Affordable Housing Award is given in Ly
nn's honor to a BIA Member that consistently and strongly acts as a mentor and friend while also helping Californian
s in their quest for affordable housing and providing guidance to the building industry as a whole.
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CHC would like to thank the sponsors of our 20th Anniversary:
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Is your CHC membership current? If you would like to
join CHC or have questions on your membership, please contact
Nancy Martin.
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CHC is a non-partisan advocate for the production and preservation of housing affordable to low- and moderate-income Californians. We represent the development, building, financial, and public sectors united in their goal that every Californian has a safe, affordable place to call home.
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