After 50 years of requiring cities and counties to plan for new affordable housing, and many local governments failing to approve these new developments. Elected Governor of California, Gavin Newsome is proposing a 2.3 billion dollar proposal that would punish the communities that deny housing developments by withholding state tax dollars.
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This new proposal would contribute over $2 billion to fund housing developments as well as homelessness initiatives. Newsome noted that California has the highest poverty rate in the nation, which is largely caused by increasing housing costs. Proposed spending would include emergency homeless shelters, providing grants to cities and counties to encourage new housing developments, and subsidised developments for low- and mid-income residents.
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According to a 2017 Times investigation, although state laws require housing plans by local government, however they are not accountable for the actual homebuilding. The proposal intends to revamp the housing supply goals set by the state, which would require cities and counties to plan every 8 years to have enough housing developments for the projected population growth over that time.
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Newsome intends to hold local governments accountable with financial penalties, which include revenue from the state transportation fund. Housing advocates praise the plan, saying its smart and strategic although it won’t fix the problems overnight. This is a great departure from the cutting the low-income housing fund and lack of housing policy that was seen by Jerry Brown during the financial crisis
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Newsome proposed that revenue withheld by the proposal would be coming from Senate Bill 1 from 2017, which the states gasoline tax would be used for road repairs and transit improvements. Although when pressed on the issue Newsome stated that it wouldn’t be gas tax money, but state transportation funds overall. These comments prompted opposition from both sides with those behind the tax increase claiming its not the will of the voter, while those against the tax increase call the withholding of transportation funds a bait-and-switch.
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A breakdown of the $2.3 billion of spending has been laid out. $1.3 billion for cities and counties which include financial incentives to permit and plan new home, as well as support for the local homelessness efforts. The other $1 billion dollars would be split between loans for developers who build moderate income family housing, and tax credits that would be used to subsidise low- to moderate-income housing constructions.
