Market-Rate Housing or Low-Income Housing? It’s Both, not Either-Or
Some falsely portray California’s housing crisis — which poses a huge threat to our state’s economy, environment, diversity, health, and quality of life — as an either-or between privately produced housing (also called “market rate housing”) and publicly subsidized below market rate housing for lower income people (also called “affordable housing”).
It’s not an either-or. It’s a both.
Both publicly subsidized low income housing and privately produced housing are essential if we are serious, as we must be, about housing low income and middle income residents.
The private market in more and more parts of California (and, increasingly, other places) will *never* produce housing affordable to our low income residents. As a result, we need a robust public subsidy program for these residents, both via inclusionary housing requirements and direct public investment (in addition to anti-displacement protections.) Strong public investment in subsidized housing is the only way we will produce a stable supply of housing for our low income residents. California has a huge poverty problem, and housing is at the heart of it. Let’s invest in housing for low income Californians to lift people up, help them build strong families, and keep people off the streets.
By the same token, we will *never* subsidize our way out of our massive middle income housing problem. California has a housing deficit in the millions—the root cause of explosive housing costs—and that large deficit grows by an additional 100,000 units each year, due to over 97% of California cities falling short of their housing goals and the general collapse of housing production in our cities over time (see graphic below). We don’t have nearly enough public funding to subsidize housing for the middle class. If we were to attempt to house the middle class with public subsidies, we would simply be taking funds away from low income people without actually solving the problem for either low income or middle income people. The Trump Administration just made it even harder to fund low income housing with the recently passed tax bill, which further underscores the importance of focusing scarce housing subsidies on low income residents.
The solution isn’t rocket science. For the middle class, we simply need to create enough new housing to dig out of our deficit and keep up with population growth — you know, the way we used to do it in California when we built lots of new housing to accommodate population growth. For our low income residents, we need massive investment in subsidized housing, like we used to do.
If we don’t fund subsidized housing for low income people, we will exacerbate our high poverty rate, increase homelessness, and undermine our communities. And, if we don’t build a large amount of privately produced housing, we will continue to lose our middle class, as families move in order to afford housing that meets their needs.
Moreover, failing to build enough housing in urbanized areas for low income and middle income residents will continue to undermine our climate goals, as we push people into sprawl housing, where they must rely on cars for crushing commutes. We need much more dense infill housing — both low income and privately produced — in our urbanized areas.
The only way to meet our massive housing needs is to *both* (a) build a lot of new privately produced housing to bring down costs for the middle class and (b) put a lot of public resources (via tax dollars and inclusionary zoning requirements) into building subsidized housing for low income people. Let’s make both happen and stop pitting middle income and low income people against one another. We need an “all of the above” approach to housing.
We’ve started down the path toward a better housing future for all Californians. In 2017, we passed an aggressive housing package, which streamlines housing approvals (both for market rate and low income housing under my Senate Bill 35); we allocated significant new funding for low income housing; we made it harder for local communities to obstruct housing; and we made clear that local communities can require affordable rental housing as part of new developments.
In 2018, the work continues. I’m authoring SB 827, which allow more housing near public transportation (both privately produced and low income), and SB 828, which requires more realistic housing goals based on actual population and job growth projections. Other bills will focus on increasing funding for low income housing and reducing displacement pressures.
Much work remains. Let’s take an “all of the above” strategy and create the various kinds of housing it’ll take to get us out of this mess.