Bay Area Receives More Housing Fund, Local Mayors Warn It’s Not Enough

After excluding the largest cities in the Bay Area from a key affordable housing funding pot – which sparked a backlash from local authorities – the state is changing its rules.

The mayors of Oakland, San Jose and San Francisco sounded the alarm after no project in their cities received funding from a little-known committee that plays a key role in funding housing in California. On Wednesday, the committee agreed to change the way it allocates future funding. But local experts worry that this is not enough, especially as the three cities are struggling with severe shortages of affordable housing.

“We’re hoping that with these changes we’ll at least be able to complete some projects,” said Pedro Galvao, policy director for the Northern California Nonprofit Housing Association. “But we still have more to do.”

Thousands of homes are threatened. According to the cities, 3,000 affordable housing units offered in Oakland, San Jose and San Francisco are awaiting funding this year. It remains to be seen whether any of these projects will get funding in the next round of allocations – which will be announced in August.

The decision will come from the California Debt Limit Allocation Committee, which splits the state’s federal bond award – a vital source of funding for projects that house low-income and formerly homeless residents of the state.

An earlier change in the way the committee allocates resources prioritized lower-cost projects, essentially excluding major cities in the Bay Area, where construction is more expensive. But now committee members acknowledge that they have underestimated the impact this would have on the Bay Area. To give major cities in the region a better chance of securing funding in the next cycle, they approved several new changes.

The committee will now do more to take into account the high cost of construction in the Bay Area when determining which projects are worthy of funding. And that will give more resources to the Bay Area. Previously, the Bay Area received 17% of the allocated funding per region. Now the Bay Area will get 21%.

It will help, but the Bay Area needs even more, say local officials, developers and housing advocates, who had pleaded for 24%.

“While we appreciate the changes adopted by the Committee as a step in the right direction, it is unlikely to be enough to correct the disparity in funding allocations statewide,” wrote the Mayor of San Jose. Sam Liccardo in an e-mailed statement. “We cannot afford an approach that continues to exclude the large cities of the Bay Area as we work together to build affordable housing and dramatically reduce homelessness.”

The committee also awarded a call for funding for a project on Auzerais Avenue in San Jose that had previously been denied.

One by one on Wednesday, local housing advocates, city staff and unsuccessful developers urged the state committee to prioritize the Bay Area.

But officials from Southern California opposed the changes. By increasing the Bay Area’s share of the pie, the committee has reduced the share to other regions. Los Angeles, for example, saw its share drop from 18% to 17%.

“I think it’s a bit premature for the committee to make any adjustments to the allowances,” said Jim Silverwood of San Diego-based Affirmed Housing.

Colin Miller, vice president of the San Diego Housing Commission, argued his city had worked to streamline permits, lower fees and lower construction costs. San Diego should not be penalized for lowering the price of building new homes, he said.

But Bay Area executives have argued that even after attempts to cut costs, large cities in the region remain extremely expensive for developers due to the high cost of living. And they urged the state to do more to address the region’s desperate housing needs.

“In Oakland, we have 13 projects ready to go to the shovel and ready to provide almost 950 new homes to families in Oakland, including 300 homes for our homeless neighbors who currently live in inhumane conditions on the streets.” Oakland Mayor Libby Schaaf wrote in an emailed statement. “We are asking our state partners to help us bring these projects to the finish line.”

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