Brown’s $400 Million Deal Boosts Affordable Housing

by on June 14, 2016

Governor Jerry Brown has offered California’s cash-starved affordable housing industry a deal: pass his “as of right” housing measure in exchange for $400 million to address the state’s housing crisis. When this $400 million is added to the over $200 million from the Senate’s No Place Like Home plan and the $366 million from the Greenhouse Gas Reduction Fund (from cap and trade auctions) it amounts to roughly $1 billion in new affordable housing funds to California in the new budget.

There are a lot of details left to be worked out and I’ll address many of them below. But in the big picture, Brown’s deal is a positive step forward that lays the groundwork for $400 million in affordable housing to be regularly included in future budgets. That’s $400 million more annually than the Governor has provided since 2011, and $400 million more than will be allocated if this deal fails.

Is this a great deal for affordable housing? No. That would require at least a $1billion in new general fund dollars.  But in dealing with a governor who does not prioritize affordable housing, options are limited.  The current deal on the table has room for tinkering, and revisions will occur. But some housing activists oppose the very concept of developers being able to build consistent with zoning without facing environmental appeals, and Brown will not budge on that.

Brown has made it clear for years that he sees activists’ right to oppose legally compliant market rate developments as injurious to solving the state’s housing crisis. It does not matter if housing activists think his analysis is wrong or believe that it’s unfair to pit the right to oppose projects against affordable housing funds—to get new general fund housing money prior to a new governor in 2019, this is the framework for any deal.

SF Objections

Mayor Lee’s administration supports components of the Brown affordable housing deal, with caveats. The Mayor wants the deal tied to the passage of Ellis Act reform. He also wants to make sure that the state does not preempt San Francisco’s inclusionary housing law, and that the deal  include the “fix” for the Palmer decision that created legal uncertainty around inclusionary housing (the reasons for Brown’s prior veto of the Palmer Fix have been eliminated so the fix, incorporated in AB 2502, should pass regardless).

Mayor Lee also wants to make sure that no “as of right” project would demolish or eliminate rent-controlled housing. He also joins many other officials across the state in questioning the practical feasibility of an expedited approval procedure included in the “as of right” legislation.

Other San Francisco officials have deeper concerns.

In a June 10 story, “SF officials wary of governor’s efforts to streamline housing plans,” the SF Chronicle’s JK Dineen reported that Supervisor Aaron Peskin has proposed a non-binding resolution exempting cities that build 25% affordable housing from the Governor’s proposal. State Senator Mark Leno expressed support for the performance requirement for cities like San Francisco that are “getting it right.”

Affordable housing activist Peter Cohen argued that appealing as of right projects produces public benefits for San Francisco and other cities, including “more below-market units, more space for blue-collar jobs, more open public space and better design.” Cohen told Dineen that “This is a terrible bill for San Francisco and other high-price cities where gentrification is a very real problem.”

Missing Brown’s Point

Critics of Brown’s plan miss his point. He doesn’t want to subject developers to the project by project bargaining over public benefits that now occurs.  He wants to eliminate uncertainty from a process that in San Francisco last year built just 2,472 units despite all the talk about excessive housing development wrecking the city.

These low construction statistics convince Brown that San Francisco is not “getting it right” but getting it wrong. He is not impressed that 25% of the city’s housing is “affordable” because he believes that restricting market rate supply inflates housing costs overall.

Brown has never expressed concern with gentrification and as Mayor of Oakland encouraged it. But increasing affordable housing funding helps combat the upscale transformation of neighborhoods. Kim-Mai Cutler tweeted a chart last week showing that since 2008 California has experienced a 66% cut in affordable housing funding, which amounts to over $1.7 billion dollars. This lack of affordable housing dollars has prevented working people from gaining housing in high cost cities, facilitating gentrification.

$400 million statewide is not a lot of money, but when added to the ongoing No Place Like Home  and Greenhouse Gas Funds California will gain nearly $1billion in new money in the new budget. That is a colossal improvement over the past decade’s allocations.

Is the $400 million a one time deal?  There is no guarantee that Brown will keep the $400 million in the 2017-18 budget, but he has no reason for continuing his opposition to housing funding  after securing development reform.  The chances are good that $400 million would be the new housing funding floor, as it is much easier to build a public campaign around continuing funding (“Stop the Cuts”!) than getting a new housing program started.

The Building Trades and environmental groups also oppose Brown’s plan, but both constituencies get other goodies from the Governor. For affordable housing advocates, however, winning general fund dollars is key. Details still must be worked out, but housing activists are not going to get a significantly better deal from Brown next year or in the future.

If activists want to see an increase in affordable housing funding prior to Jerry Brown leaving office in 2019, they should take this deal. It is the best choice for millions of Californians desperately needing affordable housing.

Randy Shaw is Editor of Beyond Chron. He writes about Jerry Brown’s grandfather running a poker club in the Tenderloin in The Tenderloin: Sex, Crime and Resistance in the Heart of San Francisco

Randy Shaw

Randy Shaw is the Editor of Beyond Chron and the Director of San Francisco’s Tenderloin Housing Clinic, which publishes Beyond Chron. Shaw's latest book is Generation Priced Out: Who Gets to Live in the New Urban America. He is the author of four prior books on activism, including The Activist's Handbook: Winning Social Change in the 21st Century, and Beyond the Fields: Cesar Chavez, the UFW and the Struggle for Justice in the 21st Century. He is also the author of The Tenderloin: Sex, Crime and Resistance in the Heart of San Francisco

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