Housing in the Governor’s Proposed 2020-21 Budget
California is short about 3.5 million homes or appartments. As a result, rents are high and unaffordable to half of all renters. Land use decisions are made locally and make the development process slow and very expensive. Developer fees add $150,000 to the cost of new unit construction.
California voters approved $4 billion in bonds for new housing. Last year’s budget invested $1.75 billion in new housing production, infrastructure grants and tax credits. The school bond on the March 2020 ballot will reduce school developer fees and exempt multi family development. California recently passed tough new rent controls on rent increases and evictions. It also authorized Enhanced Infrastructure Financing Districts that can be paired with federal Opportunity Zones to promote new development. The Governor has ordered his administration to identify excess state property to make it available for new developments. Last year’s Budget Act requires an assessment of regional housing needs and the Administration is now pressuring local jurisdictions to become compliant with the state’s goals to develop an adequate number of housing units. California is streamlining and expediting the approval process for new housing developments.
Regional Housing Needs Assessments found that in the most recent cycle local jurisdictions authorized only 1/3rd of the needed new units. The Governor has committed to streamlining and reducing the costs of that process and holding to account those jurisdictions blocking new housing. There is $6.8 billion Proposed in the Governor’s Budget across multiple departments to support the development of new housing units.
Prepared by: Lucien Wulsin
Dated: 1/18/20