What’s the solution to California’s unaffordable housing crisis?


The U.S. Department of Housing and Urban Development classifies a Sacramento family of four with annual earnings of $59,350 as low income; for a single person, it’s $41,550. HUD’s low-income classification sounds about right because, with this income, many can’t afford Sacramento County’s median home sales price of $312,000 or an average of $1,450 per month to rent a two-bedroom dwelling.

Fortunately, we have taxpayer-financed and government-subsidized affordable housing programs. What are some of these programs’ recent accomplishments?

A 2017 Cabinet Exit Memo to the American People by the outgoing HUD secretary highlighted achievements during former President Barack Obama’s administration, including many “pat on the back” laudatory statements. Statistical information about recent affordable housing accomplishments was difficult to find. Should we expect more from a government agency with a modest $49.3 billion annual budget?

The fiscal year 2015-16 annual report of the California Department of Housing and Community Development, with a $300 million-plus annual budget, shared how grants and funding recently added 2,742 new homes and apartments. Included was a $15.8 million apartment complex now home to 30 lower-income families at an average cost per family of, ahem, $526,667.

What has Sacramento Housing and Redevelopment Agency recently done with its $190 million annual budget? The agency helped a private owner with a $15.7 million conversion of 92 market rental apartments to affordable rental housing for a net gain of zero housing units. They also helped another private owner with a $10.5 million renovation of a 68-unit apartment complex, again for a net gain of zero housing units.

Meanwhile, officials offer big promises but empty-handed results while frustrated Californians patiently wait as their housing costs continue to rise.

It’s a modern-day version of the Wizard of Oz with Dorothy-like affordable-housing-starved Californians telling their Wizard of Oz elected officials, “if you were really great and powerful, you’d keep your promises.”

The Housing Choice Voucher Program is one taxpayer-subsidized program allowing landlords to rent apartments and homes at fair market rates to low-income tenants. Taxpayers pay the difference between rent charged by a landlord and amount paid by a low-income tenant.

One person recently shared how this program added to her family’s unaffordable housing crisis. They had to move from their apartment because of rising rents due to an influx of HCV Program-qualified tenants. Thanks to this program, the landlord was getting higher rents from low-income tenants.

Many enjoy affordable housing because of this program, but others have a greater unaffordable housing crisis due to taxpayer-subsidized housing demand. They’ve moved from the ranks of having affordable housing to not, while landlords smile all the way to the bank depositing fatter rent checks.

Taxpayers will always provide a safety net helping its widows, orphans and others impoverished by circumstances beyond their control. But, they’re not willing to support programs contributing to an unaffordable housing crisis with bureaucratic costs exceeding the value of net-gain solutions delivered.

These programs don’t deliver cost-effective affordable housing benefits to society, although a few lucky individuals benefit nicely. They’re a musical chairs-like redistribution of who the haves are in a society of affordable housing haves and have-nots.

Environmental zealots, land-use zoning special interests, unions and NIMBY advocates contribute to the crisis by making solutions difficult. Elected officials receptive to those having the biggest wheelbarrow of political contributions add to the challenge.

Calls for government intervention will be the daily chatter but government programs won’t solve California’s unaffordable housing crisis.

Let’s be cost-effective, efficient and wise by allowing private marketplace solutions, driven by the economic law of supply and demand, do their jobs.

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