1. Make permanent the $500 million annual increase to the California Low-Income Housing Tax Credit Program to jump-start affordable housing production and provide an additional $100 million annually to rehabilitate existing affordable rental properties.

2. Create a new Affordable Housing Preservation Tax Credit to preserve existing affordable housing at risk of conversion and to fight displacement pressures.

3. Allow affordable housing to be built by right on land currently zoned for commercial or public uses and on church-owned lands.

4. Streamline Department of Housing and Community Development rental housing funding programs through a single application and award process to reduce development costs.

5. Reduce the threshold for voter approval of local funding of affordable housing and infrastructure from 67% to 55% as was done for educational facilities in 2000.

6. Exempt supportive housing and affordable housing funded by MHP, HOME or CDBG from CEQA reviews.

Key Findings

California needs 1.3 million more affordable rental homes to meet current demand. • Despite the 2017 Housing Package, state funding remains well below 2012 levels,

undermining progress in addressing homelessness.• Low-Income Housing Tax Credit housing production and preservation in California declined by

13% overall from 2016 due to federal tax reform.When housing costs are considered, California’s poverty rate rises by 34%. • Renters need to earn 2.9 times the state minimum wage to afford the average asking rent in California.

Incomes have not kept pace with rental costs. • Median rent in California has increased 40% since 2000 while median renter household income has only

increased by 8%, when adjusted for inflation. • 79% of extremely low-income (ELI) households are paying more than half of their income on housing

costs compared to just 0.4% of above moderate-income households.• Meanwhile, California spends nearly four times more on homeowners than on renters.

CALIFORNIA Affordable Housing Needs Report

Action Items: How State Leaders Can Help

MARCH 2020chpc.net

Photo: Thomas Fam

ilyCurtesy of Chinatow

n CDC

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Source: California Housing Partnership analysis of 2010–2019 California Dept. of Finance’s Construction Permit data.*The multifamily production goal is derived using California Dept. of Housing and Community Development's (HCD) Fifth RHNA Cycle annual permit goal of 200,000 and the median percentage of multifamily permits of all permits from 2010–2019.**”Affordable Homes” is a subset of multifamily permits and is derived from the Low-Income Housing Tax Credit Program.

Multifamily Production Goal (Annual)*

Multifamily Permits

Multifamily Permits— Affordable Homes (LIHTC)**

19,23625,705

31,665

48,481 48,755 53,177 51,75359,843 58,843 53,744

7,462 6,416 9,072 7,172 5,090 6,636 6,522 8,539 7,550 9,374

0

20,000

40,000

60,000

80,000

100,000

120,000

2010 2011 2012 2013 2014 2015 2016 2017 2018 2019

Mul

tifam

ily H

omes

Per

mitt

ed 105,000

WHILE MULTIFAMILY ACTIVITY INCREASED OVER THE LAST TEN YEARS, BOTH MULTIFAMILY AND AFFORDABLE PRODUCTION REMAIN FAR BELOW NEED

Source: State of California Dept. of Finance Tax Expenditure Report, 2018-2019. California Tax Credit Allocation Committee (TCAC) FY 2018-2019 award data. California Dept. of Housing and Community Development (HCD) Program Reports and Notices of Awards 2018 -2020. California Strategic Growth Council Affordable Housing and Sustainable Communities Program 2018-2020. *Funding amounts are based on preliminary data and estimates tabulated by the respective departments. Estimated state expenditure per household (based on tenure of households as reported in 2018 Census data): $937/owner, $311/renter.

$0

$1,000

$2,000

$3,000

$4,000

$5,000

$6,000

$7,000

FY18-19 FY19-20* FY18-19 FY19-20*

Fund

ing

(in

mill

ions

)

$6,454

$1,187$1,834

$6,717

Income = BLUERent = GREEN

Burden = CORALAH homes = PURPLE

Non-AH homes = ORANGE/YELLOW

CalHome (Prop 1, 1C)Mortgage Interest DeductionReal Property Tax Deduction

HomeownershipAffordable Housing Sustainable Communities Low-Income Housing Tax Credit (State)Multifamily Housing Program (Prop 1, 1C, 46)No Place Like Home (Prop 2)Renter’s CreditVeterans Housing and Homelessness Prevention (Prop 41)

Rental Homes

CALIFORNIA SPENDS NEARLY 4 TIMES MORE SUPPORTING HOMEOWNERS THAN RENTERS

Source: California Housing Partnership's Preservation Database, January 2020. Please note that this data does not include manager or market rate units created through the LIHTC program. *Bay Area includes the following counties: Alameda, Contra Costa, Marin, Napa, San Francisco, San Mateo, Santa Clara, Solano, and Sonoma.

SINCE 2016, LOW-INCOME HOUSING TAX CREDIT (LIHTC) PRODUCTION AND PRESERVATION IN CALIFORNIA IS DOWN BY 13%

STATEWIDE

Type 2016 2019 % ChangeNew Construction 8,539 7,813 -9%Acquisition & Rehabilitation 15,032 12,686 -16%

All 23,571 20,499 -13%

BAY AREA*

Type 2016 2019 % ChangeNew Construction 2,787 2,280 -18%Acq & Rehab 5,016 3,697 -26%All 7,803 5,977 -23%

LOS ANGELES COUNTY

Type 2016 2019 % ChangeNew Construction 1,868 1,699 -9%Acq & Rehab 3,292 3,195 -3%All 5,160 4,894 -5%

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Source: California Housing Partnership analysis of 2018 1-year American Community Survey (ACS) PUMS data with HUD income levels. Methodology was adapted from NLIHC gap methodology.*The proportion of total unmet housing demand for low-income renters (shortfall / total demand) from 2014 to 2018, was 68%, 67%, 67%, 67%, and 66%, respectively.

0.26 0.25 0.25 0.24 0.26

0.44 0.46 0.42 0.39 0.41

1.47 1.421.37

1.29 1.30

0

0.50

1.00

1.50

2.00

2.50

2014 2015 2016 2017 2018

Aff

ord

able

& A

vaila

ble

Ren

tal H

omes

(in

mill

ions

)

Shortfall

Very Low-Income (VLI)

Extremely Low-Income (ELI)

CALIFORNIA NEEDS 1.3 MILLION MORE AFFORDABLE RENTAL HOMESWhile the shortfall has declined by 11% since 2014, the share of housing need not being met has remained relatively constant because the number of low-income households has also declined.*

Source: California Housing Partnership analysis of 2018 1-year American Community Survey (ACS) PUMS data with HUD income levels. Methodology was adapted from NLIHC gap methodology. *Cost burdened households spend 30% or more of their income towards housing costs. Severely cost burdened households spend more than 50%.**ELI: Extremely Low-Income, VLI: Very Low-Income, LI: Low-Income, MI: Moderate-Income, >MI: Above Moderate-Income

79%

54%

24%

7% 0.4%

90%86%

70%

43%

12%

0%

10%

20%

30%

40%

50%

60%

70%

80%

90%

100%

ELI VLI LI MI >MIHousehold Income Levels**

Cost Burdened*

Severely Cost Burdened*

79% OF CALIFORNIA’S EXTREMELY LOW- INCOME HOUSEHOLDS ARE SEVERELY COST BURDENED COMPARED TO 7% OF MODERATE-INCOME HOUSEHOLDS

Source: California Dept. of Housing and Community Development (HCD) Redevelopment Housing Activities Report 2009 -2011. HCD Program Reports, 2009-2019. U.S. Dept. of Housing and Urban Development (HUD) PIT and HIC Data since 2007. California Business, Consumer Services and Housing Agency, Homeless Emergency Aid Program, 2018. California Strategic Growth Council Affordable Housing and Sustainable Communities Program, 2014-2019. Note: Fiscal years are represented by the second half of the fiscal year (e.g. FY 2008-2009 is presented as 2009).

Ind

ivid

uals

Exp

erie

ncin

g H

omel

essn

ess

(in t

hous

and

s)

Fund

ing

(in

mill

ions

)

$0$200$400$600$800

$1,000$1,200$1,400$1,600$1,800$2,000

2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019

-1% +16%

100

112

124

136

148

160Redevelopment Funds

State Funds

Individuals Experiencing Homelessness

DESPITE THE 2017 HOUSING PACKAGE, STATE FUNDING STILL FALLS SHORT, UNDERMINING PROGRESS ON HOUSING INDIVIDUALS EXPERIENCING HOMELESSNESS

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RENTERS NEED TO EARN 2.9 TIMES THE STATE MINIMUM WAGE TO AFFORD AVERAGE ASKING RENTS

$6,607

$1,982/Month

$2,253/Month

$2,386/Month

$2,622/Month

$2,798/Month

$2,807/Month

$4,021/Month

$0 $1,000 $2,000 $3,000 $4,000 $5,000 $6,000 $7,000Average Asking 2-Bedroom Rent

Income Needed to Afford Average Asking 2-Bedroom Rent

State Minimum Wage

Childcare Workers

Retail Salespersons

Janitor & Cleaners

Home Health Aides

Construction Laborers

$13.00/Hour

$13.76/Hour

$15.13/Hour

$16.14/Hour

$16.19/Hour

$23.20/Hour

$38.12/Hour

Source: CoStar Group as of January 2020. Bureau of Labor Statistics Average Annual Wage Data for California Occupations, 2018.

Ann

ual P

erce

ntag

e C

hang

e

-15%

-5%

5%

15%

25%

35%

45%

2000

2002

2004

2006

2008

2010

2012

2014

2016

2018

Source: California Housing Partnership analysis of the Census Bureau’s 2000–2018 American Community Survey (ACS) data. Median renter income and rent from 2001–2004 are estimated trends. Median rent and median renter income are inflation adjusted to 2018 dollars.

% Change in Rent

% Change in Renter Income

$5,224Increase in annual median rent

$3,951Increase in annual median income

($1,273)Total decline in annual purchasing power

FROM 2000 TO 2018, CALIFORNIA’S MEDIAN RENT INCREASED 40% WHILE MEDIAN RENTER INCOME INCREASED ONLY 8%

Source: American Community Survey (ACS), Table S1701: Poverty Status, 2017. Public Policy Institute of California (PPIC), 2017 CPM.

CALIFORNIA’S POVERTY RATE INCREASES 34% WHEN HIGH HOUSING COSTS ARE INCLUDED

Official Poverty Measure (OPM)

13.3%(Unadjusted)

California Poverty Measure (CPM)

17.8%(Adjusted for Housing Costs & Social Benefits)

4

ACKNOWLEDGEMENTS

Danielle M. Mazzella Preservation & Data ManagerLindsay Rosenfeld Policy Research ManagerMark Stivers Director of Legislative & Regulatory AdvocacyChristina Gotuaco Director of CommunicationsMatt Schwartz President & CEO

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