The mayors of California’s big cities in unison announced that they would push for more money in an attempt to address the statewide homelessness problem, the restoration of the tax-increment financing for affordable housing and for the state leaders to take a step in analyzing the changes in law that can be made to make building and planning housing easier throughout the state of California. The new California Governor Gavin Newsom revealed in his proposed state budget emphasizing $1.75 billion in the new funding that would be used to address the state’s severe affordable housing shortage. To that effect, Gavin Newsom threatens to withhold transportation funds from the areas that do not meet the housing targets, however, such a move could punish the city’s poorest. The Big City Mayors, who lead the state’s 13 most populous municipalities, spelled out their priorities in letters sent to the legislative leaders.
“With children, the disabled and veterans sleeping on streets across California, we have a moral imperative to aggressively pursue all avenues available to expand housing and support services for our neighbors without homes,” said Riverside Mayor Rusty Bailey. “We commend the Governor and legislative leadership for prioritizing funding and streamlining building processes to provide relief to our communities and to our neighbors without homes. We won’t solve homelessness without housing.”
Back in 2018, the then-Big 11 Mayors were very successful in advocating for the state to create a Homeless Emergency Aid Program (HEAP), which would see an allocation of $500 million of flexible resources directly to the local governments. This fund would help the governments (local) to build shelters, fund outreach workers and provide rental subsidies and also come up with short-term solutions that would help move people off the streets to ultimately permanent housing. The most recent data took of the people living on the streets found more than 134,000 people in California alone, with the highest concentration being in the major cities.
During the Governors campaign, he pledged to oversee the production of at least 3.5 million new units of housing statewide. Shortly after his ascension to the high office, the Governor doubled down on the commitment, calling for a Marshal Plan for Affordable Housing. The $7.7 billion set aside in his budget for all the programs and agencies relating to housing and homelessness is short of $12 billion invested by the U.S. Government into the postwar European recovery under the Marshall plan. However, even though the budget plan is short, it represents a sizeable increase with over $5 billion dedicated to the housing and homelessness in the state’s last budget. As part of his grand plan, the governor has proposed an idea that would aggressively reform the state’s housing supply laws: Withhold transportation funds from the local governments that fail to meet the new housing production targets.
“This is a new day and we have to have new expectations, new requirements,” Newsom said at a Thursday news conference following the release of his 2019-2020 budget.
The spending plan by the Newsom’s administration also includes more than $1.7 billion for the homelessness and housing issues. Which basically is the largest funding boost that the state has seen in years. Often the previous governor, Jerry Brown, was criticized by many advocacy circles for subordinating affordable housing to other priorities, such as climate change. The new governor seems to be taking a very different turn. A key strategy that the governor is emphasizing on is the carrot-and-stick approach to encourage more cities to meet the housing requirements and goals set by the state. If the cities meet the new benchmarks set by the state for housing production, they’ll be able to dip into a $500 million pool of money set aside by the Newsom Administration proposal. A failure would result in the cities losing funding for transportation projects raised through the California Gas Tax.
“To me, housing is transportation; transportation is housing,” said Newsom. “You don’t reach those goals, we’re going to take SB1 money from you.”
The Big City mayors in addition to advocating for more resources to address the issue of homelessness, they also called the state leaders to reestablish the tax-increment financing which would effectively tackle the issue of the affordable housing crisis. Citing a correlation between the end of the redevelopment and the increase in the statewide homelessness, the mayors are advocating for this to be reconstituted, complete with robust state oversight and protection for the existing tenants.
The mayors also called on the legislature and the governor to analyze the changes in the state law that can be made to make planning and building housing easier throughout the state. This follows the recent state reports local governments are falling well short of the planning and the climate targets laid out in the SB 375 (Steinberg,2008). The Mayors also stated that they would strongly support the principal for the local control and that they would be open to supporting the state efforts to increase the production of affordable housing especially in the cities that are not meeting their share of the state housing goals.
Homelessness in California is getting out of hand and unless our leaders stand up, there is the likelihood that it might remain to be just a talk. With the mayors joining forces to demand better opportunities for the people, this menace of homelessness will be a talk of the past. Here at The Power Is Now, we are committed to making sure that we end this problem once and for all. We are also working to make a difference in the lives of the Californians by helping them become homeowners and we are making homeownership a reality for the Californians. If you are looking to buy, sell or even refinance contact Eric Frazier, Real Estate and Mortgage Broker with the Power Is Now. NMLS 461807, CaDRE 0114384.