Collins: California officials tackle affordable housing shortages

The housing crisis is real. While estimates vary on how bad the housing shortage is nationwide, Freddie Mac concluded that, as of late 2020, there was a housing shortage of 3.8 million homes. This tight supply has led to higher housing prices throughout the country, especially here in Santa Clara County.

According to a Pew Research Center study, almost one-half or 49% of Americans say the availability of affordable housing in their community is a major problem.

Since this is an election year, I wanted to reach out to a couple of our officials and see what strategies they are employing to tackle this housing crisis. Congressmember Jimmy Panetta, who represents District 19, is taking a leadership role in authoring multiple bills to address the problem.

“The high home prices, high rents and low housing stock make it tough to own and live in, what in my biased opinion is, the most beautiful congressional district in the nation,” Panetta said, “That is why my priority in the U.S. Congress, and especially as a member of the House Ways and Means Committee, is to collaborate with my colleagues on both sides of the aisle to comprehensively address housing affordability with common- sense legislation.”

He has introduced the Workforce Housing Tax Credit ACT to increase the supply of affordable housing for middle-income families who earn too much to qualify for low-income housing and are unable to afford a home near their work.

Another bill he introduced, a First-Time Homebuyer Tax Credit Act, would provide qualifying first-time homebuyers with a $15,000 tax credit toward the purchase of a new home. He said this would provide monetary support toward building wealth and establishing community roots.

Panetta also authored legislation to address the problem of a dearth of homes coming on the market due to the massive impact of capital gains. The current capital gain’s structure makes it near impossible for seniors to afford to downsize, trapping them in their homes. Creating more housing supply is critical to increasing affordability.

“My More Homes on the Market Act would double the capital gains exemption on home sales and allow homeowners looking to downsize to do so without sacrificing their nest eggs,” he said.

Panetta added that a recent bipartisan tax package would incentivizes new affordable housing and has the potential to build 40,000 new homes in California. He is also focusing on the expansion of low-income housing and rental assistance and working to secure federal funding for local housing programs to increase the amount of affordable housing.

In San Jose, Mayor Matt Mahan has an ambitious goal of building 62,000 homes between now and 2031, but said this state mandated goal won’t happen unless an effort is made to encourage development. Yet the public sector simply does not have the resources to solve our housing crisis on its own. Mahan recognizes we must create a business environment that is attractive for the private sector to invest in our community.

“Our housing shortage is pushing working people to the brink and displacing San Joseans whose families have lived here for generations,” Mahan said. “The city council must embrace bolder action to pre-clear and simplify environmental review, cap fees on new construction and speed up approvals to help enable the housing production we need to control costs for our most vulnerable neighbors”

There are so many hurdles when it comes to addressing our housing crisis. Congressman Panetta and Mayor Mahan have offered a series of solutions as it relates to tax incentives, streamlining the permit process, capping fees, simplifying environmental reviews and other bold solutions that raise the severity of this crisis.

However, there is one major hurdle not addressed and that is the resistance from neighbors and community members to housing. The “Not In My Backyard” or NIMBYism movement is real, and it’s having an  detrimental effect on housing production.

If we want to keep our children and our neighbors housed in our communities, we must strike a balance between preserving a quality of life for existing neighborhoods while still building the housing we desperately need.

San José Spotlight columnist Neil Collins is CEO of the Santa Clara County Association of Realtors, a trade association representing more than 6,000 real estate professionals in Santa Clara County and surrounding areas. Contact Neil at [email protected] or follow @neilvcollins on X, formerly known as Twitter.