Legislative wrap-up: California housing solution is under construction

150 150 Ed Coghlan

(Photo Credit: Mark Hogan/Flickr)

The California Legislature has ended its work for 2015 and some very good results to address the state’s housing and infrastructure challenges were achieved.

Governor Brown signed three bills that California Forward and the California Economic Summit were supporting.

One of the most important bills (AB 313) was designed to amend an existing law creating Enhanced Infrastructure Financing Districts (EIFDs), a new governmental entity that was created in 2014.

With the dissolution of California Redevelopment Agencies in 2011, those looking to spur economic development have struggled to find alternative tools that create investment in communities where such investments don’t flow naturally. The EIFDs were born out of conversations in the California Economic Summit to fill that vacuum by proving a vehicle for funding public projects.

This year’s legislation, sponsored by Assembly Speaker Toni Atkins (D-San Diego), refines EIFDs in two ways: It broadens the governance by allowing any local agency that brings resources to the table to participate on the governing board and it streamlines the assignments of duties of the new agency so infrastructure planning and development can be accomplished with all participating agencies.  

These EIFDs continue to attract interest across California as a way to generate local and regional investments in areas like affordable housing, for example.

“People see EIFDs as a way to spur local and regional investment,” said Fred Silva, senior fiscal analyst for California Forward. “We encourage local leaders to develop a business plan for economic development of their communities and determine the infrastructure investments that will be needed to sustain a healthy local economy over time. “

The Governor signed two other pieces of legislation supported by the California Economic Summit.

AB 90 creates a framework for how California will spend funds received from the National Housing Trust Fund, which are expected to flow to states in 2016.

AB 744 reduces minimum parking requirements in affordable housing developments located near transit, helping to lower the cost so more homes can be built.

California’s housing supply for low- and middle-income Californians in the next ten years is falling far below demand. To close the state’s growing “housing gap”–and improve access to homes for low- and middle-income workers—one million more homes need to be built, studies show. The California Economic Summit, the state’s largest coalition of civic leaders committed to sustainable growth, has identified this shortage as a major challenge to shared prosperity, and it will be a main focus of attention when the Summit annual meeting is held November 12-13 in Ontario.

Governor Brown vetoed AB 35 and SB 377, which would have expanded state tax credits for affordable housing. His veto message, which included several other tax credit measures, was clear and direct:

“Despite strong revenue performance over the past few years, the state’s budget has remained precariously balanced due to unexpected costs and the provision of new services,” Brown said in his veto message.

“Given these financial uncertainties, I cannot support providing additional tax credits that will make balancing the state’s budget even more difficult,” Brown added.

Ray Pearl, executive director of the California Housing Consortium views the veto as a missed opportunity. “Affordable home builders in the state are dismayed by this shortsighted decision, but we are resolute in our goal to make homes for California’s workforce a priority once again,” Pearl said in a statement.

But according to CA Fwd’s Silva, the Governor may be open to addressing the state’s housing problem through the state budget process rather than the tax structure, something Silva believes can be taken up at the California Economic Summit.

“Discussing ways to develop and fund a multi-year source of revenue for a Housing Trust Fund is one idea that should get some attention,” said Silva.

The Summit will continue to tackle the barriers to an adequate supply of affordable homes close to jobs and transit, exploring new financing tools to lower infrastructure costs and streamlining approval processes to reduce uncertainty for builders and delays for new residents.


Ed Coghlan

All stories by: Ed Coghlan