State housing subsidies ineffective, yet more in works

Of the myriad possible responses to California’s housing and homelessness crisis, the state’s politicians have a clear favorite: spending more money. But state and local governments’ evident difficulty using existing housing funds provides reason for skepticism. The proceeds of a $2 billion bond issue for housing approved by the Legislature nearly two years ago, for example, have yet to be spent due to a lawsuit alleging misuse of mental health funds, the Los Angeles Times reported. Meanwhile, the corporate tax cut passed by Congress in December will reduce the value of a federal tax credit that is crucial to many affordable-housing projects, further impeding the spending of state and local funds. And many subsidized developments are being blocked altogether by neighborhood opposition.

San Francisco’s plans to fund housing in the Haight-Ashbury, Forest Hill and other neighborhoods have been slowed or stopped by hostile neighbors. In Oakland, officials recently celebrated an affordablehousing complex breaking ground on BART-owned land— 24 years after its conception.

In Southern California, Orange County, which recently cleared a sprawling riverbed homeless encampment, just canceled plans for new shelters amid a fierce backlash from the cities where they were to be built. And in Los Angeles, where voters approved a $1.2 billion bond issue to deal with homelessness in 2016, City Council members recently blocked two projects that would have used the funds, while the finances of the homeless services agency that would manage revenue from a recent county sales tax increase have come under scrutiny.

Still, the daunting need for shelter and services lends intuitive appeal to the idea that resources are lacking. And despite the obstacles to productive use of existing funds, officials and candidates are pushing a remarkable array of additional spending measures.

In June, San Francisco voters will consider a proposal to raise $1 billion for low- and middle-income housing and homelessness services by taxing commercial property owners, and advocates are working to qualify another $300 million measure for the November ballot. Also in the fall, voters statewide will consider borrowing $4 billion for housing under a bond measure passed by the Legislature last year.

The top Democratic candidates for governor, meanwhile, want the state to boost housing subsidies by restoring the $5 billion redevelopment program, which was troubled by waste and abuse before Gov.

Jerry Brown eliminated it as an austerity measure.

Brown has proposed that next year’s projected $6 billion budget surplus be kept in reserve, but others want to carve it up for housing subsidies, too. State Assemblyman Phil Ting, D-San Francisco, and the mayors of San Francisco, Oakland and nine other cities propose spending $1.5 billion of it on homelessness, with an equivalent local government match. State Sens. Jim Beall, D-San Jose, and Nancy Skinner, D-Berkeley, have introduced legislation to spend $2 billion of the surplus on the crisis.

Granted, given reduced federal spending on homelessness and California’s vast housing shortage, the state could spend more. But even the greatest recent expenditures have made a relatively small difference.

Nearly $5 billion in bonds approved by voters in 2002 and 2006, for instance, produced about 57,000 units, according to the Legislative Analyst’s Office. That’s about half of California’s residential construction deficit in a single year and less than 4 percent of the total shortage of affordable homes as of 2016.

That and the halting efforts to use existing funds underscore the fact that government spending is not the most efficient way to house people — and that barriers to all kinds of housing must be broken first. Among the current efforts to do so are a bill by Assemblymen David Chiu, D-San Francisco, and Tom Daly, D-Anaheim, to streamline approval of projects devoted to affordable and supportive housing for the formerly homeless; and legislation by Sen. Scott Wiener, D-San Francisco, to allow high-density housing near mass transit. Compared with the next billion in public spending, the likely impact of such measures on the state’s housing supply is invaluable.