SB 1220 would be economic boon

When the California Supreme Court dissolved redevelopment agencies last year, it also eliminated the largest source of state funding for creating much-needed affordable homes — $1 billion annually. 

With it went the jobs associated with constructing and managing those homes. This important funding stream over the decades helped build 15,000 affordable apartments in our region.

In a state with some of the country’s most expensive housing prices, the end of redevelopment is putting affordable apartments — much less homeownership — out of reach for millions of Californians. This means the number of income-restricted homes for the elderly, veterans, working families and people with disabilities will stagnate at best. In San Diego County alone, more than 2,200 apartments that were in the works are now stalled and at risk of never being completed in light of redevelopment’s abolishment.

To prevent this situation from becoming worse, state legislation has been introduced that would generate up to $500 million annually to stabilize California’s housing market, put tens of thousands of construction workers back on the job, and create millions of dollars in new economic activity. This is the kind of catalyst we need to restore our economy and improve stability in our families and communities.

Senate Bill 1220 will support the development of affordable homes for Californians by assessing a $75 fee on real estate transactions, excluding property sales. The bill’s passage is urgent because funding for affordable housing is disappearing, including redevelopment and the $5 billion in affordable housing bonds approved by state voters in 2000 and 2006 that are nearly exhausted.

Most people in the region agree we must address the inadequate supply of affordable housing. According to the San Diego Foundation’s recent survey of 30,000 local residents, the second-most pressing concern in the county is the lack of affordable homes. In addition, a group of San Diego economists testified before a San Diego City Council committee in February 2012 that the region’s high housing costs is one of the county’s main impediments to growth.

This is especially true because San Diego’s economy is built on industry sectors and businesses where their low-wage jobs make it almost impossible to afford the going rate of $1,400 for an average two-bedroom apartment.

Passing SB 1220 would be an economic boon for our region. For every 100 units of affordable housing built, 122 local jobs are generated during construction and 32 permanent jobs after completion, according to a 2010 report from the National Association of Homebuilders. A new home can also produce as much as $375,000 in economic activity, including everything from lumber and drywall to carpet and drapes. That’s why this legislation enjoys the support of the California Building Industry Association, the California Realtors Association, and the California Apartment Association.

SB 1220 is likely to receive a vote in the full Senate before June 1, and I urge Sen. Mark Wyland to help address our region’s economic woes and lack of affordable housing by voting “yes” in support of this sensible legislation.

Bill Effinger is an affordable housing development consultant and principal at New Century Consulting.

 

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