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Coalition Takes Aim At California's Housing Crisis

Written by on Wednesday, 15 March 2000 6:00 pm
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SACRAMENTO, CA -- Can California legislate away its housing crisis?

A bipartisan coalition of government, business, labor and housing advocates seems to think so.

The group this week launched "Job Center Housing", a barrage of new legislation designed to ease a housing crisis that leaves relatively well-paid families struggling to find housing and the state in jeopardy of an economic stall.

The legislation hopes to roll back growth restraints, promote infill housing and low- and moderate-income home ownership, reform construction defect litigation law and otherwise encourage affordable housing construction by removing what it considers shackles of constraint.

Glaring holes in the coalition's strategy, however, include the absence of a conservation or environmental group and the lack of a direct role for employers who create the jobs. Job creation is largely responsible for the state's housing crisis.

Dubbed the " '99ers," in reference to the Gold Rush-era '49ers, workers are flocking to California in droves looking for tens of thousands of technology jobs generated every year by the state's booming economy. The influx comes at a time when the state is woefully short of housing by hundreds of thousands of homes. The lopsided supply-and-demand equation has pushed prices up to stratospheric levels, far beyond the reach of many hard-working Californians.

In Los Angeles, for instance, a kindergarten teacher's average income leaves her or him $64,323 short of affording a median-priced home. A firefighter in San Francisco needs an additional $88,243 in income to qualify for a median-priced home in that city. In Palo Alto (a Silicon Valley city), a police detective needs more than $150,000 than he or she earns to buy a home -- provided he can find one for sale, according to the coalition.

The California Association of Realtors recently reported housing affordability in California dropped from 40 percent in 1998 to 37 percent in 1999, the lowest it's been since 1992, when it was 32 percent. The affordability index is the percentage of families that can afford the median priced home.

Some San Francisco Bay Area counties face near record-low affordability index rates below 20 percent. In San Francisco it's 18 percent, 19 percent in San Mateo County and 20 percent in Marin County, according to CAR.

In 1999, Santa Clara County (Silicon Valley) had a housing affordability index of 28 percent, due largely to high incomes generated by technology jobs. That rate, however, is likely lower. In recent months, with most homes selling for more than the asking price, the median price is near or at the half-million-dollar milestone for single-family detached resale homes.

Even in Silicon Valley, where relatively more people can afford homes, families are hard fought to find them. The region of more than 1.7 million people, with some 300,000 owner-occupied homes, often yields less than 1,000 homes for sale.

"Even I can understand the simple supply and demand equation," said Sunne Wright McPeak, president of the Bay Area Council, a business-sponsored, public policy organization that promotes regional economic prosperity and quality of life.

"The legislation's intent is to let the marketplace work to meet the needs of the full spectrum of the population. That means getting an adequate supply of housing and stopping the constrained supply from driving up the cost for home owners and renters," McPeak said.

Among the 10 pieces of proposed legislation are provisions that would:

  • Make available to the public analyses of growth control initiatives' impact on regional economies and housing supplies, as well as the environment.

  • Examine obstacles to safely developing previously contaminated, so called "brown field" sites in existing urban and suburban areas.

  • Augment the state's budget to expand home ownership programs for low and moderate-income families.

  • Provide property tax and other incentives to promote housing in high job-growth areas and job growth in areas with sufficient housing.

  • Use redevelopment housing funds to create more urban infill housing opportunities.

  • Promote construction defect dispute reform with time and cost reducing measures to encourage more high density, affordable condo and rental home construction.

  • Reform the California Environmental Quality Act to reduce redundant reviews used to stall or kill infill projects.

    CEQA demands environmental reviews before major developments can proceed.

    That piece of legislation is raising eyebrows among environmentalists and conservationists, whose representation is conspicuously absent from the coalition.

    "We are not taking a stand for or against these bills, which are works-in-progress, but as for the Greenbelt Alliance, we are hesitant to get behind legislation that talks about reforming CEQA. That's not the problem when you are talking about the housing-jobs imbalance," said Autumn Bernstein, the South San Francisco Bay Area field representative for the Greenbelt Alliance, a group that promotes land conservation and urban development.

    Also absent from the coalition's strategy are provisions that mandate employers take a more direct role in creating housing for the jobs they generate.

    California's Department of Finance says a good jobs-housing balance consists of one new home built for each 1.5 jobs created. While the business community does contribute to the cost of new housing through groups like the Silicon Valley Manufacturing Group there's no provision for employesrs' direct hand in building housing, much as Henry J. Kaiser built homes for his employees decades ago..

    Kaiser revealed a social conscience when he played a significant role helping to end the housing shortage that developed after the Great Depression and World War II. Kaiser built more than 10,000 homes in Los Angeles, Portland, Ore., Honolulu and in what is now Silicon Valley. In the era gone by, other employers contributed to the housing effort elsewhere in the nation.

    Today, however, no one dares "slay the goose that lays the golden egg," so to speak.

    "That's really a good point, linking jobs to housing much like jobs are linked to health care. There exists the potential to build homes where jobs are created to create housing density around job centers and cut down on traffic and make for more livable communities," said Bernstein.

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      About the author, Broderick Perkins

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