SB50 – Oppose

January 17, 2020

Members of the California State Senate Appropriations Committee, State Capitol, Room 2206, Sacramento, CA 95814

RE:  SB 50 (Wiener):  Opposed

Senators:

Santa Monicans for Renters’ Rights (SMRR) urges you to Vote No on SB 50.

SMRR was founded more than 40 years ago to combat the ongoing displacement of lower income residents from our eight square mile beach city due to rapidly rising housing costs.  Over the ensuing 40 years, SMRR led successful campaigns to add rent control to the Santa Monica City Charter (1979); to add to the Charter a mandate that the City Council ensure that at least 30% of all new multi-family housing constructed each year be deed-restricted housing affordable to and occupied by moderate and low income households (1990); to impose by Ordinance inclusionary zoning affordable housing requirements on for-profit developers that provide to the developers increased height and density in exchange for increased inclusionary requirements (1992); to add to the City Charter authorization to expend City funds for affordable housing (1998); to dedicate public land and spend public funds to create deed-restricted affordable housing (from 1979 through the present); to increase the local sales tax to generate new funds for affordable housing after the State eliminated Redevelopment funding (2016); and to create and expand a local rent subsidy pilot program to keep extremely low and very low income seniors in their long time homes (2017, 2019).  As a result of these efforts—and notwithstanding the Great Recession—the City of Santa Monica met its RHNA goals in the last two cycles not only for the creation of market rate housing, but also for the creation of deed-restricted housing affordable to moderate and low income households.

Based on this 40-year history of championing public policies designed to maintain economically diverse housing in Santa Monica, SMRR opposes SB 50 for the following reasons.

While it is clear that California in general and Los Angeles County in particular is experiencing a severe housing crisis, SB 50 will do very little to address that crisis and may make it worse

This crisis manifests itself in rapidly rising rents, rising home prices, and forced displacement of many low-income families, including disproportionate displacement of low-income families of color.  This displacement has led to a dramatic and tragic growth in the number persons experiencing homelessness in communities throughout California.  

Displacement can be measured.  Between 2005-2015 Los Angeles County lost over 200,000 very low-income households, once our neighbors now displaced from the region because of rising rents.  Many more are at risk of displacement today, some are at risk of becoming homeless persons themselves.  

Some say that simply expanding our overall housing supply is the prescription to end this crisis.  They say that producing market rate units will address our housing crisis.  This is the prescription offered by SB 50, with a trickle of inclusionary units when what we really need is a river.  

Afterall, those who can afford market rate units are not the households experiencing crisis.  Those experiencing crisis are the low-income families in our communities.  These are the families who need new housing; these are the families who need this body to act.  SB 50 will not address their crisis. 

The prescription in SB 50 may actually make matters worse, perhaps much worse, long before it helps, if it ever helps.  Rapid development of market rate housing can increase rents in nearby communities.  This gentrification effect can lead to significant displacement in many communities, in others it will cause a slower but inexorable transformation to higher income neighborhoods un-affordable to those who live there now.

A strategy, like SB 50, that relies upon promoting market rate housing development is at best irrelevant to those who are actually experiencing this housing crisis; at worst it is cruel, offering false hope, but not offering homes. 

That is the fundamental flaw of SB 50.  It proposes a solution irrelevant to those actually in crisis. 

What those in crisis need is affordable housing now, developed in their very own communities.  To meet that need, there is no substitute to investment of significant public resources—both dollars and public land.

Recently the State of California mandated housing development targets to all our regional planning agencies, the Regional Housing Needs Allocation (RHNA).  Regional agencies then distributed this allocation to its cities.  In SCAG there was a giant increase in the total number of units allocated.  Just as in prior RHNA cycles, nearly 60% of that allocation was to be housing affordable to very-low, low and moderate-income housing.   A little over 40% was market rate housing. 

In the past two RHNA cycles, the region and many of its cities have met their market rate targets.  The actual and projected 5th Cycle market-rate housing developments for the SCAG region will come close to meeting the 6th Cycle market rate targets.  There is no shortage of market rate high rent housing. 

But the region’s performance on meeting the affordable housing targets in both the 4th and 5th Cycles has been dismal.  

Unless there is significant new public resources from the State of California for affordable housing (both dollars and land), and/or the recreation of something like redevelopment to match or induce the expenditure of local resources for affordable housing, we can see no strategy for success. 

Certainly, SB 50 is not a strategy for success.  It will not generate significant new affordable units. 

If we are to mandate density increases near transit in our communities, let us mandate those density increases solely for affordable housing, for units for which there is an actual shortage and that will be occupied by people who might actually use transit.

In Santa Monica we have had success in developing affordable housing.  A fraction of our 4500 deed restricted affordable units came by way of an inclusionary housing program.  Primarily these affordable units were developed by a community-based non-profit housing developer, Community Corporation.  Other units were built by faith-based housing developers.  But apart from the inclusionary units, all of our 4500 affordable housing units have been built with public dollars and/or built on public land. 

For three decades prior to the Great Recession, these units were primarily funded by redevelopment dollars and Low Income Housing Tax Credits.  Since, we have used local tax dollars in place of the lost RDA funds, including a recent voter approved sales tax for that purpose.  

Communities like ours all over California do not need a state density overlay for market rate housing and we in Santa Monica do not need a state density overlay for market rate housing.  In Santa Monica, even though our market rate housing targets were more than tripled – we will do fine.  We already approved that many market rate units for development in the current cycle, and have no doubt we can meet our RHNA targets for market rate housing in the next cycle with locally tailored policies.

Where we do need help is with additional resources to create more affordable housing for low and moderate income households.  We are very surprised that the recently released budget offers only one-time money for housing and services for the homeless.  This is not a one-year and done challenge, this a challenge requiring a sustained effort. 

We urge a No on SB 50.  We urge Yes on funding for affordable housing in the state budget.

Sincerely,

Denny Zane
Co-Chair, Santa Monicans for Renters’ Rights      

Mike Soloff
Co-Chair, Santa Monicans for Renters’ Rights             

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