What will it take to make sure there’s a future for lower- and middle-income people in California? Anyone who has tried to look for a place to live recently knows that question is much more than an abstract policy discussion.
Increasingly, the high cost of housing in California is driving the state’s low- and middle-income workers farther from job centers and even out of the state.
In a report released yesterday, “Perspectives on Helping Low-Income Californians Afford Housing,” Sacramento’s Legislative Analyst’s Office (LAO), a nonpartisan advisory office that provides lawmakers with policy and budget analyses, tackles the sticky issue of displacement and what role, if any, new market-rate housing can play in stopping it.
It’s particularly timely, as no-growth activists in Los Angeles are currently gathering signatures to put a measure on the November ballot that would significantly hinder the city’s ability to plan for new housing growth.
The new report is a follow-up to the LAO’s report last March, which outlined the causes and consequences of California’s housing shortage, and, in short, says that given the scope of the problem, the only way to stem displacement on a large scale is to significantly increase the amount of new housing that gets built in California’s desirable coastal communities.
Too great a need for the status quo
The report notes that it’s simply unrealistic to expect that current strategies to prevent displacement, like voucher and affordable housing production programs, will meet the growing need of rent-burdened low-income households by themselves.
“While affordable housing programs are vitally important to the households they assist, these programs help only a small fraction of the Californians that are struggling to cope with the state’s high housing costs. The majority of low-income households receive little or no assistance and spend more than half of their income on housing,” according to the report.
“Extending housing assistance to low-income Californians who currently do not receive it — either through subsidies for affordable units or housing vouchers — would require an annual funding commitment in the low tens of billions of dollars. This is roughly the magnitude of the state’s largest General Fund expenditure outside of education (Medi-Cal),” the report says.
Policies like rent control, while they may benefit some existing tenants, don’t actually do much to address the problems in the long term because price controls don’t add new housing.
“Households looking to move to California or within California would… continue to face stiff competition for limited housing, making it difficult for them to secure housing that they can afford. Requiring landlords to charge new tenants below-market rents would not eliminate this competition,” according to the report. “Households would have to compete based on factors other than how much they are willing to pay. Landlords might decide between tenants based on their income, creditworthiness, or socioeconomic status, likely to the benefit of more affluent renters.”
How does new housing help the poor? Read more…