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COVID-19 exposes the utter dysfunction plaguing affordable housing development in California
To make matters worse, as a result of the virus, more people will need housing, tax revenue could dry up, and labor shortages could worsen
UPDATED, April 13, 8:52 a.m.: The coronavirus pandemic will likely heighten the need for affordable housing and worsen the already extreme shortage of it in California.
The impacts of the virus will further test a broken development system, one defined by sky-high labor costs, lengthy environmental reviews, expensive materials, a hodgepodge of state agencies, litigious NIMBY’s and opposition-minded local governments.
The loss of jobs in the state means fewer people can afford the high cost of both renting and buying in California, but the financial and political system that supports affordable housing production is likely to be stressed as well, according to the Los Angeles Times.
A pandemic-weakened economy means lower government tax revenue. That likely means a shallower pool of government funding for affordable housing. That funding makes up a significant chunk of the money affordable developers need to build below-market-rate units.
Those units already cost about $500,000 on average in L.A. — short half a million affordable units as of last year — and statewide and can cost as much as $1 million dollars in some cases, making California the most expensive state to build in.
The likely economic impact of the pandemic means it’s even more important now to overhaul the process of building affordable housing in the state, said Carolina Reid, a faculty research advisor at UC Berkeley who recently published a study on the cost of housing.
“If you look at how we build affordable housing, every single one of the actors in it, from cities to developers to construction workers, is going to face stress from the coronavirus for years,” Reid said.
California Gov. Gavin Newsom has expressed frustration with the myriad of agencies that issue funds for the development of affordable housing, and has pledged to simplify how developers get money for projects.
“I’ve just had enough with TCAC and CDLAC and OPRs and CalVets and HCDs and CalHFAs,” the governor said in January. “Six of you understand what the hell I just said. No one else does. And that’s the point.” [LAT] — Dennis Lynch