You’ve undoubtedly heard by now that there is a housing affordability crisis in many cities across the United States.

In high cost cities like San Francisco (and New York, and Los Angeles, and Boston) housing affordability challenges have left  low-income families  with minimal discretionary income after their rents are paid; pushed first responders out of the communities in which they serve; forced teachers to face hours-long commutes, or leave the profession entirely; and led to people experiencing homelessness camping in tents on the sidewalk. Long a simmering problem, the region’s housing costs have escalated so dramatically over the last decade that nearly half of Bay Area residents struggle to afford their housing.

If it’s no secret that the high cost of housing is our state’s most pressing challenge, and the crisis is so well documented, why haven’t we fixed the problem? I have yet to see a single silver bullet (and I’ve spent years looking for it), but as with most public policy issues, it helps to break the issue down into smaller bites. In the simplest terms (and recognizing that I’m focusing on one specific housing type: multifamily rental housing), to build affordable housing, you need three things:

• Land: A piece of dirt on which to build new housing
• Political Will: Approved and entitled architectural plans for the new homes
• Funding: Money to fund land acquisition, construction, and maintenance and operation of the newly built housing

There is a tried-and-true roadmap to build affordable housing. It’s expensive; particularly in coastal California, but it’s not a secret: a developer secures financing to acquire and develop the land, an architect designs a project that the city approves and grants entitlements and permits, and tenants pay an affordable rent, which provides revenue to pay off the construction loan and keep the building in operation.

But what happens when land is hard to come by, or existing residents resist new housing construction, or when the cost to build exceeds what a development project can reasonably charge in rents? This is when developers, advocates, bureaucrats, and elected officials need to get creative to ensure that low-income families, people experiencing homelessness, teachers, nurses, and first responders have access to safe and decently affordable housing.

Housing for Whom?

Identifying and quantifying housing needs in the community is a key – and often difficult – step in laying out an affordable housing policy platform. With finite funding available to subsidize new affordable housing, it’s almost always the case that there are needs left un-met. In California, state law requires that every eight years, the Department of Housing and Community Development (HCD) determines the specific number of new housing units each city must plan for that are affordable to very low-, low-, moderate-, and above-moderate-income households.  The goals are ambitious, and rarely achieved.

Eligibility for most federal, state, and local housing assistance programs is determined by how a household compares to the jurisdiction’s Area Median Income (AMI).  A city’s AMI is the household income for the median (middle) household in a defined area; that is, line up all the households in the city from lowest to highest income, and the median income is right at the center. The federal Department of Housing and Urban Development (HUD) calculates the AMI for each metropolitan area of the country each year, and jurisdictions may apply filters or screens to adjust that calculation in a way that takes into account local factors.

While no one needs to memorize the complex income chart for their jurisdiction, it’s critical to keep in mind who you are trying to house when you contemplate a new development. Is the goal to build housing for:

• People experiencing homelessness?
• Working families with young children?
• Seniors on fixed incomes?
• First responders?
• Teachers and paraprofessionals?

Different local, state, and federal funding sources serve different points on the income spectrum.  Traditionally, publicly funded affordable housing programs have served households earning up to 60% of AMI, with the general assumption that people earning more than that could at least afford market rate rents, if not homeownership.

In San Francisco, in 2019, the median income for a family of four is $123,150. A low-income family of four earning 60% AMI earns $73,900 per year. With market rate rents averaging $3,700/month, that low-income family faces a monthly housing affordability gap of more than $1,800, and would need to earn at least $133,200 in order to afford the average market rate rent.

Solutions

There is a definitive need for affordable housing programs for low-income households. But there is also clearly a need for housing assistance for people earning up to and beyond the city’s median income. When available funds and programs don’t align well with defined needs – and there is simply not enough money to solve the problem, the housing affordability challenge can seem insurmountable.

If there is a silver lining to the current state of housing in the Bay Area, it’s that the affordability crisis has served as a much-needed call to action. Under a regional framework known as the 3Ps (production, preservation, and protections), new programs that seek to facilitate new housing construction, preserve existing affordable housing, and to enact tenant protections have been tried, tested, funded, and legislated at the local, regional, and state levels.  A few highlights include:

• Land: at the State level, the Surplus Land Act clarifies that unused public land should be activated for affordable housing development. At the local level, San Francisco voters will consider a ballot measure in November 2019 that will allow affordable housing on most sites that are publicly owned. In order to better attract and retain teachers, San Francisco has funded the first educator housing development on school district property, and the San Francisco Unified School District has identified three additional parcels as future sites for employee housing.
• Political Will: Senate Bill 35, authored by Senator Wiener, passed in late 2017 paved the way for by-right, streamlined project approvals and shaving years off of the entitlement timeline for new affordable housing developments. Efforts to upzone in order to encourage transit oriented development, increase density, and add affordable housing to the region have been hotly debated at the regional level and at the State legislature. While Senate Bill 50, also from Senator Wiener, stalled at the end of the last legislative session, it will be considered in the 2020 session.
• Funding: In San Francisco, voters passed a $350 million housing bond in November 2015; on the upcoming November 2019 ballot San Franciscans will have an opportunity to pass another housing bond – this time in the amount of $600 million. Public-private partnerships such as the San Francisco Housing Accelerator Fund are focused on market-paced anti-displacement strategies and innovation in new housing production.

Regionally, private funders are coming together around housing in efforts such as the Partnership for the Bay’s Future and Kaiser Permanente’s initiative tackling housing insecurity in Oakland.  And at the State level, Governor Newsom signed a budget that includes $500 million in new low income housing tax credits, which are scheduled to be allocated in January of 2020 to spur new housing production.

Optimism matters, but pragmatism and focus are required, along with a commitment to focusing on the 3Ps for the long term. California has not kept pace with housing production needs for decades, and housing construction has been particularly slow in coastal communities, where jobs have been added at breakneck speed. It stands to reason that solving, or making a dent, in housing affordability challenges will also take decades. We can’t afford not to try.