California assembly members finally struck a deal late Thursday night, passing a series of bills to fund affordable housing across the state, which Oakland city leaders and housing advocates hope will pay to build and protect affordable housing in the city.
Chief among them are Senate Bill 2 (SB 2), which would create a permanent affordable housing fund financed via a $75 to $225 fee on certain real estate transactions, such as mortgage refinancing, and Senate Bill 3 (SB 3), which would put a $4 billion housing bond on the 2018 ballot to be decided by California voters. The senate, which has already passed earlier version of the bills, is expected to pass the finalized bills today, according to the LA Times, and Governor Jerry Brown, Oakland’s former mayor, must sign both by October 15 for them to become law.
The bond created by SB 3 would allocate $1.5 billion to a Housing Rehabilitation Loan Fund that would assist in the “new construction, rehabilitation, and preservation” of rental housing for people making up to 60 percent of an area’s median income, which would be up to $62,580 for a family of four in Oakland, or $43,860 for a single person). It will also allocate $1 billion for veterans’ homeownership subsidies, and create a variety of smaller funds for everything from affordable housing infill developments to farmworker housing to mobile home rehabilitation.
Two weeks ago, Oakland Mayor Libby Schaaf joined ten California mayors in a delegation to Sacramento to support the package of housing bills. In an August 29 op-ed in the San Francisco Chronicle, Schaaf advocated for a $6 billion state housing bond. “Alameda County and Oakland are acting to marshal resources and implement strategies, but it’s not going to be enough. We must do more,” she wrote.
The $6 billion number echoed an advocacy effort spearheaded by California Treasurer John Chiang and the group Advocates for Affordable Housing. In August, they announced the results of a poll, conducted by JMM Research, that 60 percent of likely California voters would support a $6 to $9 billion housing bond.
In her op-ed, Schaaf called “anything less [than $6 billion] grossly insufficient.” Yet reacting to the smaller package on the table for California lawmakers, Schaaf joined other Oakland officials and housing advocates in saying that any amount of money is better than none. SB 3 is “still is a strong commitment to making a dent in the affordable-housing construction we need,” she wrote in an email Thursday morning.
The $4 billion bond “is not adequate for the level of need that [California] has,” said Gloria Bruce, executive director of East Bay Housing Organizations, a housing advocacy coalition based in Alameda and Contra Costa counties, but she still would like to see it signed by Brown and passed by California voters.
“I think it would be very meaningful for a governor who made a lot of his political career in Oakland to recognize the housing crisis that this city and many other cities are facing,” Bruce said.
In 2016, Oakland residents overwhelmingly approved Measure KK, which allocated $100 million to build and protect affordable housing in the city, and Alameda County voters passed Measure A1, a $580 million bond that allocated roughly $54 million to Oakland to “create and preserve” affordable rental units that “will remain affordable for the long term—estimated to be at least 55 years,” according to a fact sheet on the measure prepared by the county. Oakland will be able to compete for another $94 million from Measure A1, according to Michelle Byrd, director of Oakland’s Housing and Community Development Department.
“Some people think, ‘Well great, Oakland’s rolling in it now,’” said Bruce. “The truth is that money is going to go fast.”
Claudia Cappio, one of Oakland’s assistant city administrators, lauded the passage of the 2016 local measures, but said, “compared to the need, it’s a drop in the bucket.”
“This funding,” she continued, referring to SB 3 and its associated bills, “would be at scale.”
In 2011, following budget shortages caused by the recession, California officials terminated the state’s redevelopment agencies, which were responsible for funding much of the affordable housing development across the state. Subsequently, funds for affordable housing dropped precipitously. “Between 2008 and 2013,” according to a report prepared in 2016 by Chris Bazar, director of the Alameda County Community Development Agency, “there was an overall decrease of 89 percent in state and federal funding for affordable homes in Alameda County.”
In that time, Oakland’s share of redevelopment money plunged from $30 to $35 million per year to $5 to $7 million per year, according to Byrd.
At the same time, housing costs in the Bay Area rose dramatically and tent cities sprang up across Oakland.
The average monthly rent for a one-bedroom apartment in Oakland has risen more than $1,000 since 2011 to just under $2,400 per month, according to RentJungle, an online search engine for rental housing. The average two-bedroom apartment price has risen to over $3,000 per month, also according to RentJungle. Median home prices have also more than doubled since 2011 to just over $687,000, according to Zillow, an online real estate database and marketplace.
There are no homes in Oakland that would be considered affordable—which the federal government defines as no more than 30 percent of an occupant’s income—for Oakland residents making minimum wage or even the entry level salary of a teacher, according to a 2016 report from PolicyLink. Nearly half of Oakland renters are living in homes they cannot afford, according to this report.
In the last two years, Oakland’s homeless population has increased by 26 percent, according to Alameda County’s 2017 Homeless Census and Survey. The vast majority of these people were living in a home in Alameda County prior to becoming homeless, the report stated.
Yet only six percent of homes currently being built in Oakland are considered affordable using the federal definition, according to the Oakland Housing Cabinet’s July, 2017, “A Roadmap Toward Equity” report. The report sets a goal of building 17,000 new homes in Oakland by 2024, but it does not set specific goals for how many of those must be affordable. It also sets a goal of preserving 17,000 affordable homes by 2024, but the city’s definition of a “preserved” home includes giving “know your rights” counseling to tenants, which is not necessarily a guarantee that the unit will remain permanently affordable.
“Oakland needs to be building much more” affordable housing, said Bruce. “The pipeline is really skewed right now. There’s so much market rate housing, and so little affordable housing.” The housing bond, she added, is “crucial” to those efforts.
As SB 2, SB 3, and a number of other housing bills are sent to the governor’s desk for his signature, the need for affordable homes is higher than ever, Oakland advocates said.
“One of our projects is 56 units of housing for low- to moderate-income people,” said Byrd. “That project received 6,500 applications.”