California is now confronting a housing affordability crisis where police officers, firefighters, school teachers, construction workers, and the bulk of the state’s workforce are not able to qualify for the purchase of their first home.
The facts about housing affordability in California are startling. According to fourth quarter 2006 figures from the California Realtors Association, only a quarter of Californians have the means to afford a their first home at the median price of $477,400.
In San Diego County, the prospect for first-time homebuyers is even more dismal with only 23% of wage earners able to afford the median price of $492,810.
Renters also struggle with the reduced number of available rentals and prices requiring them to pay out a substantial portion of their monthly income for housing. According to the San Diego Housing Federation, the annual income required for the average rent of $1,183 per month for a two-bedroom apartment in San Diego is nearly $48,000.
Over the last few decades, states and municipalities have sought to remedy the problem of affordable housing through a number of initiatives. Among the most effective of these approaches are Local Housing Trust Funds.
Local Housing Trust Funds are pools of funding dedicated to increasing access to affordable housing through direct assistance to renters and first-time home buyers, or by funding new housing and rehabilitation projects for older homes.
Local Trusts also allow for local leaders to make decisions based on local housing needs. If, for example, a community has a high number of colleges and universities and needs more investment in rental housing, the Local Trust may wish to focus its investment on more affordable apartments.
Despite their proven success, Local Housing Trust Funds often suffer from unstable and inadequate sources of funding and are usually subject to the vicissitudes of the economy and erratic budgeting by government.
To provide an injection of funding to these programs, I have introduced a measure, AB 1449 to allocate $40 million of Proposition 1C bond funding for the local housing trusts.
One of the most attractive attributes of a Local Housing Trust is the ability to leverage funding from other sources. Following allocations from Proposition 46 in 2002, San Diego was able to attract $10 for every $1 in State Bond funds. Santa Clara County has been able to generate $46 from other sources for every dollar allocated by the State.
The lack of affordable housing can prove as debilitating to the state’s economy as crumbling roads or an inadequate supply of power. If we don’t make living in California affordable enough to retain and attract the necessary workforce, the repercussions for the state’s economy are likely to be devastating.
Because of their sensitivity to local needs and their ability to leverage funding from other sources, I believe additional funding for local housing trusts would be a smart investment in the state’s housing infrastructure.
State Assemblywoman Lori Saldaãa (D-76 District) is chair of the Assembly Committee on Housing and Community Development.
