Senate Budget and Fiscal Review Committee Holds Hearing on Affordable Housing and Homelessness

Yesterday, the Senate Budget and Fiscal Review Committee convened a hearing to discuss affordable housing and homelessness in California. During the hearing, the Legislative Analyst’s Office (LAO) began with framing the housing affordability and homelessness issue in California, sharing several high-level details also provided in their recently published reports (see below).

The LAO indicated that several factors have played a role in the current state of high-housing costs. The average home in California costs roughly 2.5 times the national average and rents are roughly 50 percent higher than the rest of the nation. In highlighting affordability challenges, the LAO indicated that roughly 2.5 million low-income households are cost-burdened and 1.5 million spend more than 50 percent of their income on housing. About one million middle-income households are also cost-burdened and only one-quarter of low-income households are benefiting from subsidized housing given that programs alone are not enough to address the magnitude of the State’s affordability challenges.

The LAO indicated that the state’s homelessness challenges are linked to the state’s housing affordability challenges. Rising housing costs exceeding the rise in wages puts Californians at risk of housing instability and homelessness. Those spending greater than 50 percent of their income on housing are at greatest risk. The LAO noted that as of January 2018, California’s homeless population was roughly 130,000 individuals. California has a disproportionate share of homeless individuals with roughly 25 percent of the nation’s homeless population, compared to only 12 percent of the nation’s population. California also has the highest share of unsheltered housing. The LAO further described investments made in prior Legislatures, the Administration, and voters.

The Department of Finance (DOF) provided an overview of the Administration’s housing and homelessness proposals included Governor Newsom’s January budget release. The hearing also featured a panel providing the local perspective including Phil Ansell, the Director of Los Angeles County’s Homeless Initiative, Stockton Mayor Michael Tubbs, and Doug Shoemaker, the President of Mercy Housing California. Each panelist described the partnerships, successes and challenges in addressing homelessness in their communities, while also applauding the Legislature’s interest in doing more.

Finally, the hearing included updates on recently implemented programs. Representatives from the Department of Housing and Community Development (DHCD) provided update on various programs under their purview including SB 2 and No Place Like Home. The California Housing Finance Agency shared successes in around increasing home ownership, increasing multi-family housing units, and increasing the financial strength of the agency. The Homeless Coordinating and Financing Council discussed their interagency working group around housing first, the implementation of the Homeless Emergency Aid Program, and the development of a potential state-level homeless data integration system.

Members of the Committee offered an array of questions/statements each approaching homelessness from slightly different angles. Senators asked what investments would make the most impact in our current homelessness crisis, whether there has been an assessment of policy failures that have led us to this point, and if data around the impact of gentrification on homelessness in California exists. Others urged consideration of further defining the term affordable housing and the need to ensure corporations to pay workers a living wage.

Committee Chair Senator Holly Mitchell reiterated the importance of the hearing and noted that this would be the last hearing for the full budget committee at this time. She announced that budget subcommittees would begin their work in two weeks.

Meeting materials can be found here.

Links to recent LAO housing-related reports are provided below:

Considerations for the Governor’s Housing Plan

What Can be Done to Improve Local Planning for Housing

Considerations for Governor’s Proposals to Address Homelessness