CSAC Bulletin Article

A Tool Kit To Close California’s Housing Gap

October 27, 2016

As California continues to grapple with an acute affordable housing crisis, all levels of government are looking at ways to rethink affordable housing financing and also the regulatory environment which can either help or hinder housing production.  Affordable housing was one of the main topics during the 2016 legislative session and while some progress was made on issues like density bonus, accessory dwelling units, and unlocking the potential for housing on existing properties with existing uses, larger issues remain unresolved.

For the 2017 Legislative session, CSAC staff anticipates picking up where we left off on affordable housing. This coming legislative session will likely feature debate and action on these issues at least:

  • Future state General Fund support for affordable housing,
  • A permanent source for affordable housing outside the general fund,
  • Potential general obligation bonds,
  • Significant changes to the role of the local planning and entitlement process as envisioned in the Governor proposal on “by-right” for multifamily affordable housing.

The CSAC Annual Meeting will feature a workshop on affordable housing and specifically best practices and proactive innovations at the local level that can help spur housing production across the state. As a preview to that panel which will include perspectives from cities, counties and the affordable development community, the McKinsey Global Institute, who will also be represented on the panel, released a report earlier this week– A Tool Kit to Close California’s Housing Gap: 3.5 Million Homes by 2025 – that tries to tackle this very subject.

According to the study, California has fallen several million homes behind since the last major housing construction boom in the 1980s. To match the number of houses per person in New York or New Jersey, the state would need to build 3.5 million more homes over the next decade. This chronic underproduction is having far-reaching economic impacts—with rising home and rental prices swallowing up $140 billion in economic activity each year and forcing nearly half of California households to struggle to buy or rent a home in their community.

The McKinsey Global Institute worked in partnership with the California Economic Summit network, identifying 15 levers that could allow California communities to close the affordability gap and build up to five million new homes. The focus of the growth is on vacant land, focusing on transit-oriented development, building out accessory dwelling units, maximizing underutilized and adjacent land. Many of the levers are locally focused so make sure to check out the full report which also offers economic impacts from these tools and plan to join the Affordable Housing Workshop on Thursday, December 1 at 10 am.

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