With state and federal funds drying up, banks lending less, and more cities facing budget deficits, tens of thousands of newly proposed affordable homes have been stuck in limbo, unable to get off the ground.
So come this November, Bay Area voters will not only be weighing in on the next U.S. President, but also, whether or not they should step in and loan the nine-county region a total of $20 billion to move those efforts along.
Last week, the commissioners of the Bay Area Housing Finance Authority—a first-of-its kind agency created in 2020—voted unanimously to put the bond measure on ballots to fund new subsidized housing projects, buy up existing homes to make or keep them affordable, and support housing-related infrastructure.
The bond would be funded by property tax increases, with an estimated tax of $19 per $100,000 of assessed value, which shakes out to about $190 per year for a home assessed at $1 million.
If voters approve this IOU, each city would receive a cut of the proceeds based on how much its jurisdiction pays in taxes. San Francisco, for example, would get about $2.4 billion to invest, while the city of Oakland would get over $720 million. The funds would be dispersed in the form of low-cost loans.
BAHFA estimates that paying off the loan would add up to nearly $50 billion after interest. The mayors of San Francisco, San Jose and Oakland all expressed support for the bond measure.
“We’re very intent on setting up a successful public interest mortgage lending system so that we are self-sustaining,” said Kate Hartley, BAHFA’s director, at the hearing on June 26.
Normally, housing bonds require a two-thirds majority (or 66.7%) approval to pass. In an effort to help this initiative across the finish line, lawmakers are also planning to roll out a separate constitutional amendment that would lower that threshold to 55%. If voters pass that, it would apply to any bond concurrently on the ballot.
“This isn’t an either/or choice,” said Heather Hood, the Northern California market leader for Enterprise Community Partners, a national housing nonprofit that has been working with BAHFA since its inception. “This money will go directly to the cities, many of whom wouldn’t have been able to raise funds at this scale.”
“We won’t have to wait too long to see results either,” she added. “The fact is the region has a robust pipeline of entitled projects already that just need a financial boost. We’re not starting from scratch.”
According to a joint report released by the two organizations in May, there are currently 433 affordable housing developments already in pre-development across the region that would provide 40,896 new affordable homes if completed.
Matt Schwartz, CEO of the California Housing Partnership, a nonprofit dedicated to helping government and nonprofit housing agencies, told The Standard that he views the BAHFA bond as a lifeline in the face of the state pulling back its housing resources.
“If you need or care about affordable housing, everything rests on this,” Schwartz said. “The state clearly isn’t coming to the rescue.”
The California Housing Partnership estimates that over 227,000 low-income renter households in the Bay Area do not have access to an affordable home with 70% of extremely low-income households paying more than half of their income on housing costs.
The BAHFA bond is one of a slate of new pro-housing measures that state legislators are working on this year. This week, Sen. Scott Wiener unveiled a bill to cut down housing approval red tape. Meanwhile his colleagues in the Assembly have been introducing bills aimed at fast tracking office-to-housing conversions, reigning in corporate landlords, and setting up a social housing agency, among others.
Convincing voters that a tax hike is the solution is no easy task. For example, Proposition 1, a statewide $6.4 billion mental health initiative championed by Gov. Gavin Newsom earlier this year, passed by a slim margin of only 25,000 votes.
The San Francisco Association of Realtors, which typically opposes property tax hikes, did not respond to a request for comment. Of note, in its March voter guide, the body wrote “no endorsement” next to Proposition A, a local affordable housing bond, which passed with a 70% vote.
Between now and November, the coalition that shaped the BAHFA bond will now have to go about the work of selling it to voters.
Bill Barnes, now the director of campaigns and community engagement at NonProfit Housing, worked on the city’s 2015 affordable housing bond campaign that delivered $310 million. He also twice served as campaign manager for the late Mayor Ed Lee.
He said that the BAHFA bond will benefit from the high expected voter turnout this November.
“People are really cranky,” Barnes said. “Different people will go to the ballot for different things, but across that, housing is a top priority.”
“This is the election where if you’re going to do a bond measure, it’s as good as it’s going to get,” Barnes said.