California’s housing crisis dominated headlines in 2019, but one San Jose legislator’s effort to alleviate its impact left Gov. Gavin Newsom’s desk without a signature.
Last year’s Senate Bill 5, authored by state Sen. Jim Beall, D-San Jose, aimed to support Newsom’s goal of building 3.5 million housing units by 2025 by establishing an Affordable Housing and Community Investment Program to help local cities and counties afford to build more affordable housing. The program would have been funded by redirecting property tax revenue initially collected for educational use.
The original legislation was vetoed in October, but will live to see another day in Sacramento as Beall reintroduced it Monday during the new legislative session – now as Senate Bill 795.
If approved, the newly-named bill would support continued in-state construction through this tax revenue reallocation. The number of available affordable units would increase, helping to ease the shortage.
When SB 5 was delivered to Newsom in September, he said he couldn’t get past the lack of prior fiscal consideration.
“California is in a housing crisis, and I have consistently maintained we need to use all the tools in our toolbox to address it,” the first-term governor wrote in the Oct. 13 veto letter. “However, this bill would increase costs by $2 billion annually once fully implemented. Legislation with such a significant fiscal impact needs to be part of budget deliberations so that it can be considered in light of other priorities.”
Beall, who will term out after this legislative session, said he’s reintroducing the bill because he thinks this solution is larger than a budget issue. In a tweet over the weekend, he said the bill’s formation of a city-state partnership is vital to a solution to the housing crisis.
We need to be smarter, more strategic about our investments and housing policies. A city-state partnership for production must be part of the solution. That is why I am reintroducing a bill that will allow the state to immediately help fund low-income housing construction again. https://t.co/TVYLd4dKPu
— Senator Jim Beall (@Jimbealljr) January 4, 2020
If the original bill’s language isn’t changed, cities and counties will be able to propose projects to a dedicated state committee, which would ensure the design meets one of five required criteria, such as including affordable housing units and development near transit. Funding transfers for approved projects would not exceed per-year rates of $200 million from 2021 to 2026, but annual funds could potentially be capped at $2 billion by 2029.
San Jose Mayor Sam Liccardo, who announced a goal to build 10,000 new affordable housing units by 2022, supported the bill’s aspirations earlier this year.
“With the demise of redevelopment agencies almost a decade ago, San Jose and other California cities have lacked the resources to build the affordable housing we critically need,” Liccardo said in May. “I’m grateful for Senator Beall’s leadership and initiative to support this essential endeavor.”
But as only 245 of those 10,000 units have been built since the 2017 announcement, local affordable housing advocates agree that more needs to be done to fill the funding gap left by the removal of redevelopment agencies. Jeffrey Buchanan, policy director for Silicon Valley Rising, a coalition of labor and faith leaders and community organizers, said the bill’s impacts could add needed muscle to local San Jose initiatives while avoiding the pitfalls redevelopment met.
“We think that (SB 5 is) the right kind of focus when it comes to leveraging state resources, to ensure that for communities that want to build affordable housing, the lack of financial resources isn’t the impediment,” Buchanan said. “We think it ensures that there’s resources for this great public need of low-income and workforce housing, but then also ensures that you don’t have cities or jurisdictions robbing Peter to pay Paul.”
Regardless of its impact on affordable housing, some educators worry the bill would deplete already low local resources or reduced state funding.
San Jose Teachers Association President Patrick Bernhardt said he’s heard some of those anxieties, especially for San Jose, which has lower property tax revenue than other neighboring cities. But he’s not immediately concerned about the state’s ability to backfill borrowed funds to meet its mandated school district funding minimums.
“Senator Beall has said that in his vision of SB 5, when the state would be using this money, Sacramento would have to write larger checks to local school districts, but they wouldn’t actually see any change in their revenue,” he said.
The association has no official stance on either version of the bill, but Bernhardt said the teacher housing crisis, which is exacerbated in San Jose by the cost of living, is a top priority. He said Bay Area teachers continue to get priced out, and new teachers can’t afford to start their careers here. The housing website Zillow pegs the median San Jose home value at $995,714, and Data USA reports San Jose’s median salary as $113,036. The San Jose Unified School District lists a range of teachers’ starting salaries, from $56,000 to $80,000, and reports 4,000 employees throughout the district.
If SB 5 can work as Beall has envisioned, Bernhardt will be glad.
“I know that the SJTA and teachers across California are appreciative that legislators like Senator Beall are working on solutions to this problem,” Bernhardt said. “We’ve got to do something.”
Editor’s Note: Silicon Valley Rising is a campaign of Working Partnerships USA. The organization’s executive director Derecka Mehrens sits on San José Spotlight’s Board of Directors.