Coalition Announces Plan for Dealing With Housing Crisis; Lawmakers Join with Business, Labor and Housing Advocates to Introduce Omnibus Job Center Housing Agenda.

Business/News Editors

SACRAMENTO, Calif.--(BUSINESS WIRE)--March 13, 2000

Taking aim at a crisis that threatens to stall California's economic engine and punish new working families, key members of the legislature today joined forces with a broad-based coalition of business, labor and housing advocates to introduce an omnibus package of bills to address the shortage of affordable housing in the state's high job-growth areas.

Dubbed "Job Center Housing," the bi-partisan legislative package seeks to increase housing production in the state's high job-growth areas.

"Today, as California enjoys robust economic growth - with high rates of job creation and historically low levels of unemployment - more and more California families are struggling to find affordable housing," said Allan Zaremberg, president of the California Chamber of Commerce. "And, at a time when California's economy - and population - is growing at near record pace, the state continues to under-produce housing."

Last year marked the 9th consecutive year of housing production at roughly 50 percent of normal. In 1999, only 139,000 new homes were built, while the Department of Finance estimated the annual need to be from, 230,000 - 250,000 units. The resulting housing shortages in the high job-growth areas are sending home prices skyward and more of California's workforce on the road to travel to faraway places for housing it can afford.

"In California, the mismatch between what people are earning and what it takes to buy a home is staggering," said Zaremberg. "Not only are housing shortages and high prices chasing working households out of California's job centers but they've begun to chase our workforce to other states where housing is more affordable."

In some of California's job centers, a professional's annual salary can be as much as $100,000 short of what's needed to afford to buy the median-priced home. A police detective working in Silicon Valley making the average salary of $62,230 needs $151,103 more in annual income before he or she can qualify for a home in Palo Alto.

As California continues to grow - its population is estimated to reach between 45 and 50 million in the next 20 years - the crisis will continue to worsen, particularly in the state's job centers. The Bay Area, already the nation's most expensive housing market, is expected to have a cumulative housing deficit of 324,000 units by 2010, unless something is done to remove the barriers to developing land-efficient, infill projects in existing urban areas.

In fact, nearly all of California's job centers are suffering what's referred to as "jobs-housing imbalance," where housing production has not kept pace with new job creation. The Department of Finance says a healthy ratio of jobs to housing is about 1.5 to 1, that is one and one-half new jobs requires at least one new home to be built (or two homes need to be built for every three new jobs created). Statewide, the ratio of jobs to housing is more than three to one, but in job centers like San Jose it's nearly four to one, in Los Angeles it's six to one and in San Francisco it's six and one-half to one.

"If you are a high-tech firm in the Silicon Valley, your job recruitment is suffering from housing price sticker shock," Zaremberg said. "Recent reports show somewhere between 60 to 80 percent of targeted out-of-state recruits are saying "no" to California jobs."

Zaremberg said the Legislature has it in its power to help ease the current housing crisis and get California back on a track of building housing to meet the demands stemming from job growth and population increases. The Job Center Housing strategy proposes public policy reforms that will help maximize land-use opportunities in California's high job-growth areas and reducing housing costs.

"This package of bills was developed with a simple objective in mind: give back to local decision-makers the tools they need to attract and approve housing development in the state's high job-growth areas," Zaremberg said.

If approved, Job Center Housing would:

--   Establish fiscal rewards for communities in high job-growth areas
     for approving new housing;

--   Limit the abuse of the CEQA process used to stall or kill infill
     housing projects;

--   Establish a fair system for resolving construction disputes;

--   Establish full disclosure of the impacts of local growth control
     initiatives;

--   Promote more timely and efficient use of redevelopment housing
     funds;

--   Identify the obstacles to greater investment and housing
     development in existing urban and suburban areas, particularly
     so-called "brownfields;" and

--   Increase funding for low- and moderate-income housing.

Among the broad coalition of supporters of the Job Center Housing package, were representatives of business, labor and housing advocates, who joined the Chamber of Commerce and a host of business groups to show their support for Job Center Housing.

"It's a sad irony of our time that thousands of the union construction workers we represent are helping to build homes they cannot afford to buy," says Jim Earp, executive director of the California Alliance for Jobs. "They are among the many working families who are being driven farther and farther from their places of employment by skyrocketing home prices. This legislative package will help break down the barriers that are preventing us from solving the housing shortage in our urban areas."

"California is failing to provide affordable housing options for working families across the state," said Marc Brown of the California Rural Legal Assistance Foundation. "In San Francisco, for example, a person earning the minimum wage would have to work 146 hours a week to afford the rent on a two-bedroom unit. We need policies and programs that help our communities build the housing they need and which help working families achieve the dream of owning their own home in a safe community near their place of employment."

With regard to homeownership, California is one state shy of being dead last in the rate of homeownership among households. Only 56 percent of California households are homeowners while the national rate is nearly 67 percent. Yet, Californians - particularly those who rank among the newest residents and newest entrants into the state's workforce - consider homeownership a top priority.

"Our research shows that homeownership - the American Dream - is today considered by immigrant households by a three-to-one-margin over all households as their top priority," said Ted Chandler of Fannie Mae, the national mortgage lender supporting increased homeownership in California's underserved markets. "State policymakers need to help California's new generations meet their goals and fulfill their dreams."

California homebuilders agree.

"The Legislature must act to improve the state's housing situation, particularly its abysmal rate of homeownership, if California is to continue to hold up the promise of a high quality of life to future generations," said Robert Rivinius, chief executive officer of the California Building Industry Association. "Job-Center Housing gives the Legislature a plan to keep that promise."

COALITION CONTACTS

Allan Zaremberg, CA Chamber [phone]

Marc Brown, CA Rural Legal Assistance Foundation [phone]

Steve Carlson, CA Housing Council [phone]

Kirk Clark, CA Business Roundtable [phone]

Eileen Reynolds, CA Association of REALTORS [phone]

Tim Cremins, CA Nevada Council of Operating Engineers [phone]

Jim Earp, CA Alliance for Jobs [phone]

Carol Galante, Bridge Development [phone]

John Geoghegan, Home Ownership Advancement Foundation [phone]

Rex Hime, CA Business Properties Association [phone]

Damian Jones, Fannie Mae [phone]

Jamie Khan, Associated General Contractors of Calif. [phone]

Gavin McHugh, CA Manufacturers Association [phone]

Sunne McPeak, Bay Area Council [phone]

Christine Minnehan, Western Center on Law and Poverty [phone]

Robert Rivinius, CA Building Industry Association [phone]

Les Spahn, CA Manufactured Housing Institute [phone]