Gov. Jerry Brown Restricts Funds for Affordable Housing in New Budget

The 2017-2018 Governor's Budget Summary [PDF] was released to the California Legislature, as required, on Jan. 10. The media was quick to report on the $1.6 billion deficit after four years of being in the black. 

Housing advocates were disappointed that Brown had ruled the General Fund off-limits for affordable housing, though a path was delineated to allow for new, permanent funding sources if Brown's principles were met. 

"Brown’s proposed budget makes it clear that state funding of affordable housing will not be the way out of this crisis," reports Jason Islas for Streetsblog California. Brown's housing department released a report last week that found the state has been underproducing housing by 100,000 units annually for the last ten years.

The budget proposal explicitly notes that money for affordable housing will not come out of the State’s General Fund and no new funding sources will be available without significant reform to local laws that currently stand in the way of housing growth.

That did not sit well with Assemblymember Richard Bloom (D-Santa Monica), whose bill, AB 2501, incentivizes developers to build affordable housing by clarifying state Density Bonus Law. Brown signed it last September.

“I regret that this year’s budget features neither specific policy proposals nor funding for affordable housing, both of which Governor Brown provided important leadership on last year," stated Bloom, who worked closely with the Governor’s office last year on legislation that would have streamlined the approval process for housing.

That proposal ultimately failed, despite the 'carrot' of $400 million for communities that relaxed local land use rules. A version of it has been reintroduced by Sen. Scott Wiener (D-San Francisco) as SB 35.

Referring to that attempt, Brown said at a news conference: "The last time we pushed it pretty hard,...some people said we didn't collaborate enough, (s)o we're setting principles out so we can collaborate," reports Liam Dillon for the Los Angeles Times.

Five housing principles outlined in the budget document [PDF] show Brown's reform priorities. The third bullet that offers a carrot and a stick is certain to be controversial—the stick part, that is. The last one places the General Fund off-limits as a revenue source. 

• Streamline Housing Construction—Reduce local barriers to limit delays and duplicative reviews, maximize the impact of all public investments, and temper rents through housing supply increases.
• Lower Per‑Unit Costs—Reduce permit and construction policies that drive up unit costs.
• Production Incentives—Those jurisdictions that meet or exceed housing goals, including affordable housing, should be rewarded with funding and other regulatory benefits. Those jurisdictions that do not build enough to increase production should be encouraged by tying housing construction to other infrastructure‑related investments.
• Accountability and Enforcement—Compliance with existing laws—such as the housing element—should be strengthened. 
• No Impact to the General Fund—No new costs, or cost pressures, can be added to the state’s General Fund, if new funding commitments are to be considered. Any permanent source of funding should be connected to these other reforms.

Islas ends on an ominous note, pointing to the presence of the Neighborhood Integrity Initiative, now known as Measure S, on the city of Los Angeles ballot.

Measure S would result in a two-year moratorium on permits for projects that require an amendments to the General Plan, including parking reductions for projects near transit and higher densities in the city’s jobs-rich areas.