OAKLAND, Calif. (CN) — Affordable housing is at a premium across the country, but a crisis of demand in California has experts scratching their heads at how cities will navigate an increasingly expensive and time-consuming system to improve supply.
“If housing prices are high and no one is coming to you with a proposal, you are probably sending the message that you are not accommodating to development,” UCLA housing researcher Mike Manville says. He is one of several experts who say California cities may have piles of money to spend on the construction of affordable housing, but they have to make strategic policy changes if they really want to tackle their housing crises.
California is unique because cities needing affordable housing rely heavily on competitive federal and state funds. City leaders can apply for funding from the Community Development Block Grant Program — which awards housing grants annually — or allocated by the governor, depending on the projects they want to build. They also compete by demonstrating why and how they will address the need for housing in their community. The Legislature also recently freed hundreds of millions for affordable housing projects meeting certain criteria, adding another level of competition as the housing crisis worsens.
Some San Francisco Bay Area cities are pursuing aggressive policies to create restricted-price housing, combating a growing affordability crisis and historically exclusionary policies.
The Oakland City Council has approved about $60 million in state funding for affordable housing projects and $15 million from annual funding sources. The council recently voted to pursue $200 million in state affordable housing grants as well.
Housing and Community Development director Shola Olatoye said the city has received about $322 million from the state since 2020. In two years, the city has leveraged about $1.8 billion with state and county money, tax credit bonds and private loans. The city has also discussed a ballot measure asking voters if the city should pursue $850 million to create public housing and improve city streets and facilities.
San Francisco has received at least $449 million in state funds for affordable housing since June 2021, Housing Department spokesperson Anne Stanley said.
She said the city has streamlined how affordable building proposals move through the system, with requirements for developers to designate some units as below-market — or pay a fee or dedicate land for housing.
Sacramento has adopted a Housing Trust Fund using affordable housing dollars from a budget surplus. Community development spokesperson Kelli Trapani said the city invested $31.5 million in 2020 for 644 units that began taking shape in July.
“These resources have helped projects obtain the necessary financing to start construction sooner and be more competitive for state and federal resources,” Trapani said. The city has also added policies to incentivize creating “naturally affordable” housing, where new construction spurs price drops.
It’s a common approach also seen in San Diego. Housing Commission vice president Scott Marshall said via email more than 2,000 affordable units were greenlit for financing last year, with about $16 million identified for more affordable rentals.
Experts say while these are good steps, the major question will be how quickly new housing appears with limited land available for traditional public housing.
Ryan Finnigan, senior research associate at Berkeley’s Turner Center, said research supports creating housing of all price levels to relieve pressure by opening up older housing. Cities must pair new housing with strong tenant protections to decrease displacement of people with lower incomes than those who move in.
But in the Bay Area, resistance is high from residents who want their communities to look the same as they always have
“Anywhere you are, there’s going to be somebody that doesn’t want affordable housing,” Finnigan said, adding local debates about affordable housing seem to focus on finding only one “optimal strategy” — leaving many proposals dead in the water.