As Sonoma County and Santa Rosa move forward with plans to cope with the housing crisis, including more housing for the homeless as part of an ambitious goal designed to build 30,000 dwellings in five years, Governor Newsom in early January said state tax dollars raised from the hike in the voter approved SB1 transportation gas tax could be withheld from cities and counties that do not authorize enough new housing.

His comment came during his first state budget proposal this year, where he cited statistics showing several cities are behind when it comes to meeting targets for housing, low-income housing and places for the homeless. For example, Sonoma County has only achieved about 40% of its state-mandated housing development goal.

Newsom also announced plans to set new goals for building homes in each region, and that his administration would hold county and city governments accountable for meeting these targets by assessing financial penalties if these thresholds are missed.

No one questions the urgent need for more housing, and especially affordable housing and housing for the homeless. However, the shortfall in housing has been impacted by the ability of developers to obtain financing, the rising cost of labor, permit fees, and increasing prices for building materials. In addition, market supply and demand forces — as well as the lack of funds for affordable housing — have also limited housing starts.

The governor’s ambitious statewide plan speaks to the funding gap as part of his call for 3.5 million more homes to be built within seven years (2025) — involving a 400% increase in today’s rate of new home development.

His 2019 budget contains $2.3 billion in new funding with $1.3 billion earmarked for incentives to spur planning and permitting processes in cities and counties, including $500 million to aid affordable housing efforts. An additional $1 billion would be allocated for developers who construct homes for moderate-income families and tax credits to subsidize low- and moderate- income housing.

While these state efforts are laudable, they should not overrule or preempt cities and counties from moving forward with housing plans already in progress or on the drawing board. Furthermore, the state also should not attempt to acquire local or regional funds from organizations, such as The Committee to House the Bay Area’s CASA Compact, convened by MTC and ABAG, with its goal to raise $1.5 billion for housing.

The CASA Compact, and its 10 policies designed to increase housing production at all levels of affordability, preserve existing affordable housing, and protect vulnerable populations from housing instability and displacement. This Compact became the template used by state legislators who submitted approximately 200 housing-related bills during its first session this year. Several of these proposed bills are designed to limit local control, override local ordinances and the ability

of cities to block or limit housing development, according to reports in the San Francisco Chronicle, Mercury News and other sources.

State Senator Mike McGuire’s SB4 bill would streamline the approval process for small multifamily housing projects in cities and counties with unmet housing needs, excluding coastal zones, historic districts and areas with high fire risks. It would also ease the development of apartment buildings and condominiums up to an additional story higher than existing height limits within a half-mile of transit stations.

Overall, it will take the combined efforts of local government, the private sector (such as those underway by our local Employer Housing Council and others) engaged in city, county and state partnering programs to adequately fund and serve as a stimulus for new housing.

Many of the proposed changes could be voted on or take effect within the next few months. The Sonoma County Alliance, along with other stakeholders such as North Coast Builders Exchange and North Bay Association of Realtors, will be monitoring these bills and issues. Many of the proposed changes have the potential for positive change while some may have negative and/or unintended consequences.

Eric Goldschlag SCA President