California Gov. Gavin Newsom’s $38 billion projected budget deficit and proposed cuts are highlighting the heavy reliance of housing funds on the state’s fluctuating financial position, motivating some Bay Area housing leaders to double down on the need for more consistent funding streams.
Diane Papan
Several housing programs supported by the state’s general fund — including the Multifamily Housing, Infill Infrastructure Grant, Veterans Housing and Homelessness Prevention, Regional Early Action Planning and CalHome programs — would face cuts ranging from about $50 million to $300 million. Last fiscal year, the county received more than $48 million from those programs combined, and developments such as the North Fair Oaks Apartments, Burlingame’s Peninsula Wellness and about nine others intend to apply for additional funding from them.
Assemblymember Diane Papan, D-San Mateo, said it’s still too early to speculate on the impacts of such nascent financial projections from the governor’s office, and she remains cautiously optimistic.
“Reducing investments in affordable housing is certainly never welcome, but right now they’re the governor’s proposals, and we’ll revise what comes out, because that is going to be a more accurate picture of what our finances are going to be like,” she said, adding that early signs of improved macroeconomic conditions will go a long way in unlocking funding limbos in which many developers are currently stuck.
But Michael Lane, state policy director at SPUR, a Bay Area public policy organization, said the cuts might accelerate urgency to pass some of the state and regional bond efforts in the upcoming elections this year.
“Recently we’ve been relying upon allocations from the general fund, and some of those allocations were over multiple years. But that also means that they can be caught back in a situation like this where we have a budget deficit and so we have a lack of predictability and consistency in terms of ongoing funding,” Lane said.
A state housing bond, Assembly Bill 1657, would authorize $10 billion in general obligation bonds for affordable housing initiatives, assuming it is passed by voters. And a regional housing bond spearheaded by the Bay Area Housing Finance Authority would add roughly $10 per $100,000 of assessed property to owners’ tax bills across the Bay Area, including San Mateo County, raising an estimated $10 billion to $20 billion to finance affordable housing projects.
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General obligation bonds have received pushback from some critics, stating the stalled housing development is more a result of overly burdensome regulations and approval processes, though Lane said the state has made significant strides in streamlining those blockages, through legislation such as the recent Assembly Bill 1449, which exempts many 100% affordable housing developments from the California Environmental Quality Act, a frequently cited culprit of building delays.
The regional bond measure will go before voters in the November election, and if the repeal of Assembly Constitutional Amendment 1 is also passed, the voter threshold to approve such general obligation bonds would lower from two-thirds majority to 55%.
If budget cuts are enacted, local jurisdictions could tap into their own funds to supplement program support, but it’s more likely that significant gaps will have to be filled at the regional and state level, Lane said.
He also added these bond measures would be critical to accelerate housing developments but, in the meantime, he, along with other advocates, will work toward securing near-term funds.
“There is still work on the back end to make sure that even if these bond measures do pass, that there’s not significant or ongoing cuts to some of these other programs. We’ve got a development pipeline that are already funded but are just stalled out right now,” Lane said.
A report conducted last year by the housing nonprofit Enterprise calculated about 400 affordable housing developments – amounting to roughly 33,000 homes – that were waiting on local approval or additional financing to move forward. More than 1,800 of those homes were in San Mateo County.
I'm surprised Papan didn't use the democrats' typical response, "balancing the budget on the backs of the poor, and those who can least afford it." Oh, I just realized there's a democrat pulling the strings, thus we must all stick together and support our government. I'm personally looking forward to Jan 2025 when Trump cuts the federal budget and attacks our 34 TRILLION $$$ deficit, of course he will do it on the backs of the poor who don't pay taxes.
Assemblymember Papan's comment was appropriate to the issue. I think she will look for ways to restore some of, if not all of, the affordable housing funding. The state's top down housing policy that relies on the goodness of developers to create affordable housing once environmental law is eviscerated is an ongoing failure. We need public funding to rebalance our housing mix.
And Yosemite - who will be the beneficiaries of that funding? Greedy developers who refuse to build at a loss? Public funding of such initiatives is always subject to graft and mismanagement, all under the auspices of social welfare. Even the SF Chronicle reports on the diversion of funds to incompetent cronies of the funding agencies.
Another self-inflicted wound sob story in an attempt to withdraw more money from the taxpayers… Just vote no on any bonds or taxes to support so-called affordable housing (or anything else for that matter). It’s highly likely that the only folks benefitting from the state’s largesse are the homeless industrial complex. Meanwhile, state and local governments are doing their best to raise housing prices via more and more property taxes, parcel taxes, additional fees and levies…
So Mr. Lane, just because Sacramento cannot manage its revenues and expenditures, your solution is to overturn another restriction on taxation? Why do you think we placed that restriction to begin with? It is intended to curtail liberals like you from blowing our money and spending it on pet initiatives by the Governor and the single party Legislature. If anyone had the stomach to read the almost 70 page-long bill under Proposition 1 in the recently mailed Voter Information Guide, anyone in his or her right mind must conclude that Sacramento is insane or at least tone deaf. This is already the State with the highest taxes, prompting high earners to move out. That is the reason the State is now short of funding these programs and will burden the remaining population with their ineptitude. Thanks to Papan and her ilk.
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(5) comments
I'm surprised Papan didn't use the democrats' typical response, "balancing the budget on the backs of the poor, and those who can least afford it." Oh, I just realized there's a democrat pulling the strings, thus we must all stick together and support our government. I'm personally looking forward to Jan 2025 when Trump cuts the federal budget and attacks our 34 TRILLION $$$ deficit, of course he will do it on the backs of the poor who don't pay taxes.
Assemblymember Papan's comment was appropriate to the issue. I think she will look for ways to restore some of, if not all of, the affordable housing funding. The state's top down housing policy that relies on the goodness of developers to create affordable housing once environmental law is eviscerated is an ongoing failure. We need public funding to rebalance our housing mix.
And Yosemite - who will be the beneficiaries of that funding? Greedy developers who refuse to build at a loss? Public funding of such initiatives is always subject to graft and mismanagement, all under the auspices of social welfare. Even the SF Chronicle reports on the diversion of funds to incompetent cronies of the funding agencies.
Another self-inflicted wound sob story in an attempt to withdraw more money from the taxpayers… Just vote no on any bonds or taxes to support so-called affordable housing (or anything else for that matter). It’s highly likely that the only folks benefitting from the state’s largesse are the homeless industrial complex. Meanwhile, state and local governments are doing their best to raise housing prices via more and more property taxes, parcel taxes, additional fees and levies…
So Mr. Lane, just because Sacramento cannot manage its revenues and expenditures, your solution is to overturn another restriction on taxation? Why do you think we placed that restriction to begin with? It is intended to curtail liberals like you from blowing our money and spending it on pet initiatives by the Governor and the single party Legislature. If anyone had the stomach to read the almost 70 page-long bill under Proposition 1 in the recently mailed Voter Information Guide, anyone in his or her right mind must conclude that Sacramento is insane or at least tone deaf. This is already the State with the highest taxes, prompting high earners to move out. That is the reason the State is now short of funding these programs and will burden the remaining population with their ineptitude. Thanks to Papan and her ilk.
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