California lawmakers recently announced four bills aimed at addressing the state’s affordable housing crisis, including one that seeks to increase the state low-income housing tax credit (LIHTC) program to $300 million per year.
These bills will fund the production of housing for low-income families, incentivize local governments to complete upfront planning and environmental review and approve housing permits to increase housing supply, fund the enforcement of existing state housing laws, and provide rental assistance to homeless Medi-Cal recipients.
“The affordable housing crisis threatens our state’s economic prosperity and climate goals and deepens inequality,” said Assemblymember David Chiu (D-San Francisco), chair of the Assembly Housing and Community Development Committee, in a statement. “There is no single solution to resolve the crisis. My colleagues and I have put forward solutions to increase funding, incentivize and streamline housing creation, and to enforce existing housing law where creation is not occurring.”
He was joined by Anna Caballero (D-Salinas), Miguel Santiago (D-Los Angeles), Phil Ting (D-San Francisco), and Assembly Speaker pro Tem Kevin Mullin (D-San Mateo) to announce the package of bills.
Introduced by Chiu, AB 71 seeks to eliminate the state mortgage interest deduction on vacation homes. This deduction results in a revenue loss to the state of approximately $300 million annually. The funds saved as a result of eliminating the deduction would then be used to increase the state LIHTC program each year. This is a notable boost from existing levels. In 2015, the California Tax Credit Allocation Committee awarded approximately $111 million in state credits to 9% LIHTC deals. Mullin and Ting are co-authors.
“The introduction of AB 71, which will create more than 3,000 affordable homes and 7,000 new jobs annually by using additional state tax credits to leverage $1 billion dollars in other funding, shows that California is once again leading the nation and not waiting for Washington, D.C., to act," says Matthew Schwartz, president and CEO of the California Housing Partnership, which helped Chiu conceive the idea as a way to transform and expand California’s state housing credit to develop additional housing and make more deeply targeted developments feasible.
If approved by two-thirds of the state legislature and the governor, "AB 71 would represent a substantial new state investment in an incredibly efficient private-public partnership," Schwartz says.
Next, AB 72 would provide funds to the attorney general to enforce existing state housing laws. There are various laws at the state level to hold local communities accountable in approving housing. These include the state housing element law and the Housing Accountability Act. The attorney general has had the authority to enforce these laws but does not have funding earmarked for this purpose, according to the lawmakers. The bill, which does not specify how much would be appropriated at this time, was introduced by Santiago. Chiu is the joint author, and Mullin is co-author.
AB 73 aims to spur production of housing on infill sites near public transportation by incentivizing local governments to complete upfront zoning and environment review and rewarding them when they permit housing, says Chiu, who introduced the bill. Caballero is the joint author, and Mullin, Santiago, and Ting are co-authors.
The last bill, AB 74, creates the Housing for a Healthy California program to pay for the cost of housing chronically homeless individuals on Medi-Cal who receive services through the Whole Person Care pilot program, Health Homes, or another county-controlled funding source.
Chronically homeless Californians incur disproportionate Medi-Cal costs. “To break the endless cycle of the revolving doors of emergency rooms, inpatient facilities, treatment centers and nursing homes, this new program would shift the paradigm by providing rental assistance for supportive housing to those individuals who are both homeless and receive significant public health care services,” says Chiu, who introduced the bill with joint author Santiago. Mullin is the bill's co-author.