CHC Industry Insight

Industry Insight - July 2022

Note from the Executive Director

With the budget passed and the Legislature’s summer recess starting next week, we’ve reached the point of the legislative session where it’s possible to take stock and consider where progress is being made on affordable housing, where it’s not, and what we need to do next when members return in August.

First, on progress: As noted in more detail below, this year’s state budget, which was finally approved this week, invests roughly $2 billion in some of the state’s most successful affordable housing programs. That is not an insignificant amount—and I know CHC members will put these resources to good use to build safe, affordable homes for tens of thousands of struggling Californians who desperately need them. At a time when the state has a nearly $100 billion surplus, could our leaders have done more? That is a fair question, one we plan to continue to raise in every meeting we have in Sacramento into next year.

For now, though, our focus has shifted to the Capitol: Before the Legislature went on recess this week, several important CHC-sponsored bills continued to advance, including AB 2011 (Wicks) and AB 2334 (Wicks), both of which were approved by the Senate Governance and Finance Committee and will be heard in Senate Appropriations in August.

As we’ve seen throughout the debate on these bills, their innovative proposals for opening new sites to affordable development, accelerating approvals, and providing new protections for workers enjoy strong support among members and stakeholders alike—including major labor groups like the California Conference of Carpenters, SEIU, and the California School Employees Association.

Opposition remains, though, and it is as strong and unmoving as ever.

July is shaping up to be a critical time for negotiation, and we are going to need your help. “We have another 45 days,” as Senator Scott Wiener (D-San Francisco) put it this week during the debate on AB 2011—noting the wide gaps in labor language in different housing bills and the potential for compromise in the weeks ahead: “I’m hoping that this bill will play a role in facilitating resolution of the labor issue so we can all lock arms and build a ton of new housing.”

We can use your help to convey this message to your local and state elected officials during the month ahead—whether it’s over lunch or coffee or when you’re breaking ground on a new project. We’re as close as we’ve been in years to a major breakthrough on affordable housing policy, but we will need all of our friends’ and allies’ support to get there. If you have any questions, please reach out, and CHC staff can provide you with any information you need.

Thank you as always for your commitment and continued advocacy.

Sincerely,

Ray Pearl

Executive Director

In Case You Missed It

All three of CHC’s sponsored bills advanced their way through the Senate policy committees ahead of the Legislature adjourning Wednesday night for summer recess. The Legislature will return on August 1 and will have one month to pass all remaining bills out of the appropriations committees and off the Assembly and Senate floors.

AB 2011 (Wicks) would open new sites to affordable housing and create strong labor protections that support all of the workers on these essential jobs. AB 2011 passed out of the Senate Housing Committee with a vote of 6-1 and the Senate Governance and Finance Committee with a vote of 5-0.

AB 2334 (Wicks) would expand the AB 1763 enhanced density bonus to all 100% affordable housing developments located in low vehicle travel areas. AB 2334 passed out of the Senate Housing Committee with a vote of 8-1 and the Senate Governance and Finance Committee with a vote of 4-1.

AB 2006 (Berman) would require HCD, TCAC, and CalHFA develop a process to prevent duplicative compliance monitoring for projects that have regulatory agreements with more than one of these agencies. The bill passed out of the Senate Housing Committee last week with a vote of 8-0.

Late Sunday, the Legislature and the Governor reached agreement on the Budget Act of 2022. The final budget package includes the following for affordable housing:

$500 million for the 2023 calendar year in state low income housing tax credits
$425 million over two years for the Infill Infrastructure Grant Program
$410 million over two years for Adaptive Reuse
$150 million over two years for the Portfolio Reinvestment Program
$325 million over two years for the Multifamily Housing Program
$350 million for the CalHOME program
$250 million for the Housing Accelerator Program
$100 million over two years to continue the Veterans Housing and Homelessness Prevention Program
$50 million for the Joe Serna Jr. Farmworker Housing Program

The Los Angeles Times Editorial Board offered their full-throated support last week for AB 2011, saying “California needs more housing and good jobs. There’s a bill to create both.” “If you care about solving the housing crisis and want California lawmakers to put the interests of the whole state over the demands of the few,” the Times wrote, “then keep your eye on [AB 2011].” After years of political gridlock in the Legislature, the editorial says Asm. Wicks’s legislation offers a unique opportunity to take on two of the state’s most challenging problems.

A new study from Economic & Planning Systems concluded in June that redeveloping aging retail spaces into higher density housing can be a “win-win” for local governments—boosting city tax revenues and increasing access to affordable housing. The EPS report was released ahead of Senate Housing Committee, making it a valuable reference point for AB 2011 (Wicks).

Affordable Housing in the News

Affordable housing and its many benefits dominated the news this month, with stories highlighting the positive impact affordable homes have not just on the millions of Californians who can’t find another place to live—but on the construction workers who build these units and the local communities that promote their development. The Sacramento Bee and Los Angeles Times editorial boards both offered their whole-hearted support for affordable housing and the high road jobs these projects can create under legislation like AB 2011 (Wicks): The Bee said “the need for this kind of housing legislation is self-evident at this point, while the Times called the pairing of affordable housing and new construction jobs a “win-win.”

A study from the University of California-Irvine’s Livable Cities Lab, meanwhile, undercut one of the most oft-repeated NIMBY arguments against new housing, finding affordable housing does not negatively affect housing prices or crime rates—and in fact boosts property values and reduces crime, especially in places experiencing higher rates of poverty. Another study from Economic & Planning Systems came to a similar conclusion about affordable housing’s benefits for local tax revenues—concluding that redeveloping aging retail spaces into higher density housing, especially with work and shopping patterns changing during the pandemic, can provide a significant boost to local tax bases.

CHC Member Spotlight

CHC Member: Eden Housing

Project Name: Sacramento Street Apartments

Location: Vallejo, California

Units: 75 units of 100% permanent supportive housing

Opening Date: March 2023

Local, State & Federal Financing Sources:

City of Vallejo, Vallejo Housing Authority, Solano County through the Community Action Partnership JPA, HCD No Place Like Home, 4% federal LIHTC and tax exempt bonds, and state LIHTC.

The Sacramento Street Apartments, is Eden Housing’s first affordable housing project created using factory-built modules. In partnership with locally-based Factory_OS, Eden Housing is reducing the time it takes to deliver critically needed housing for people experiencing homelessness.

CHC 2022 Policy Forum

CHC invites you to nominate candidates for the California Housing Hall of Fame Awards. Please submit the attached form by July 15.