Housing crisis: California bill aims to help the ‘missing middle’

As the state’s costliest housing markets and high rents threaten to force all but the highest-paid workers into ever-longer commutes, California lawmakers have introduced a bill to help more teachers, firefighters and other middle-income workers live close to their jobs.

The new legislation, Assembly Bill 3152, would give nonprofit housing developers property tax exemptions on homes in high-cost areas that are rented at a discount to those with moderate incomes. The tax breaks, currently available to developers of low-income housing, would make middle-income rental housing easier to build.

"During the housing crisis, middle income Californians are in a very tough spot," said Assemblyman David Chiu, D-San Francisco, who is carrying the bill. "They don’t qualify for low-income affordable housing, but also can’t afford market rents."

The struggle of the state’s middle-income residents is one of several fronts Sacramento lawmakers have been attacking as they look to ease the housing crisis and its related disaster: jammed freeways and two-hour commutes between job hubs like the Bay Area and more affordable parts of the state. Other housing legislation runs the gamut from boosting the overall supply of housing to expanding renter protections.

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In Alameda and Contra Costa counties, where the median income for a household of four is $97,400, a family of four earning up to $116,900 could be eligible for the moderate-income housing built under AB 3152. In Santa Clara County, where the median income is even higher, a household of the same size earning as much as $135,950 is considered moderate income by the state.

While those salaries might go a long way in other parts of the country, the average rent for a two-bedroom apartment in San Jose is now $2,834 per month, according to April data on the real estate site RentCafe. In Oakland, it is $3,177. In Chiu’s home district of San Francisco, a two-bedroom apartment costs $4,351 per month. And with Bay Area home prices at record highs, more middle-income families — who might have previously enjoyed the stability of homeownership — are forced to rent if they want to live near work.

Often, when nonprofit developers make their affordable-housing pitches to local governments, city officials ask what can be done for middle-income workers, said Michael Lane, policy director for the Non-Profit Housing Association of Northern California, which is co-sponsoring the bill.

"We’ve historically had to say there’s very little we can do," he said.

Public agencies, such as school districts, already receive tax breaks for workforce housing on government-owned land. But, Lane said, there are no longer subsidies or tax credits available to build homes on private property for middle-income Californians.

Lane said the bill will hardly be the "be all, end all" solution for the housing crunch. Still, he said, it would give nonprofit developers — and cities interested in attracting such housing — another tool to lower costs and make such construction financially feasible.

Lane estimated it could spur the development of thousands of new homes over the next decade.

Tribune Content Agency

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