Newly minted California Gov. Gavin Newsom outlined the contours of how the state will make an effort to correct a severe housing deficit. As part of his introduction of a 2019-20 state budget proposal, Newsom listed several policy and funding commitments to boost the state’s housing supply — and punish those cities not keeping up.
“The poverty rate in California — the reason it’s the highest in the country is cost of living,” Newsom said in his presentation of the proposed $209 billion state budget on Thursday. “The number one driver of cost of living is housing. This is the issue and unless we get serious about it then this state will continue to lose its middle class and the dream will be limited to fewer and fewer people.”
“This is a new day and we have to have new expectations, new requirements,” added Newsom.
Here are five housing policies the Governor proposed:
1. Cities and counties will be encouraged to build their fair share of housing through tying it to revenues from Senate Bill 1, which provides funding from gas taxes for transportation projects. Those that don’t meet their goals, as defined by the state, won’t receive the money, Newsom said.
2. The general fund would have a one-time allocation of $500 million for moderate-income housing production. That would take the form of an expanded state loan program for developers with mixed-income developments with a lower subsidy than traditional state programs.
3. Another $750 million in one-time money would be used to partner with and encourage local governments to jump-start housing production, and to establish higher short-term goals for housing production statewide. Separately, the state will also revamp its Regional Housing Needs Assessment to strengthen the state’s oversight of communities meeting long-term housing goals.
4. In addition to committing $500 million for jurisdictions to build housing specifically for the homeless, Newsom called for streamlining environmental review for new homeless shelters, and identifying surplus state property to build affordable housing under long-term ground leases.
5. The state would encourage the creation of more enhanced infrastructure financing districts, a scaled-back version of redevelopment. Those EIFDs could pair with federally designated Opportunity Zones in the state’s poorer communities to pay for infrastructure and give state and federal tax breaks for new projects within them, including housing.