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California passed a new housing package. How much will it help?




The California Legislature just passed a package of housing bills. Will it keep housing affordable?
The California Legislature just passed a package of housing bills. Will it keep housing affordable?
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Think you're paying too much to live in California? So does the state Legislature.

Last Friday, lawmakers passed a package of 15 bills at the very end of the session. 

Together, the bills will create more money for low-income housing and make housing easier to build.

But will they be enough to end a state housing crunch, where about a third of renters devote more than half their income to rent?

Take Two tackled some of these questions with KPCC housing reporter Josie Huang. 

Are these bills giving the crisis an "eviction notice"?

No.

But no one – not even the bills' sponsors – said the bills were going to fix the problem. They called them a good first step.

Passage of the housing package was a way for legislators to let their constituents know that they hear you and were actually doing something about housing.

How much money will these bills raise?

Let's tackle the biggest pieces one-by-one.

Senate Bill 2, which needs the Governor's signature, is projected to raise $250 million each year for subsidized housing for low-income people.

Senate Bill 3, which will be on the November 2018 ballot, would ask voters statewide to greenlight $3 billion dollars for low-income housing and $1 billion dollars for home loans for military veterans.

How many more homes can that create in California?

To keep prices where they are at now, the state’s housing department says California needs to build 180,000 housing units every year. That will keep up with demand.

But right now less than 100,000 units are built annually, so the state falls short by 80,000 – that's why prices are increasing.

Governor Brown's office estimates building one unit costs $332,000.

Do the math, and SB 2 can pay for about 750 extra homes every year.

Meanwhile supporters of SB 3 say if it passes, it can fund the creation and rehabilitation of around 50,000 affordable units. But that's a one-time bond measure and would not repeat year-after-year.

So both of these measures combined won't make much of a dent in that 80,000 extra units that are needed annually.

What about speeding up the home-building process to make it cheaper?

That's what Senate Bill 35 does.

If a community isn't meeting its state-mandated share of creating those 180,000 housing units, then developers can speed past some of the approvals process for a project.

As long as a builder meets basic zoning and other requirements, they can start digging.

That would save them time, money and legal headaches.

But it's unclear how many more units would get built as a result of it – supporters say it's hard to say. 

What’s the net effect of these bills passing?

These bills will mostly benefit low-income households. They will have a slightly better chance of getting into one of these affordable units.

But demand for all housing remains high, and keeps growing.

So another number to watch for is $250 billion.

The state’s legislative analyst office says spending that much on housing will give relief to the nearly two million renters in California who put more than half their paycheck towards rent.

But that's a number no one's even talking about.