SECTION 1.
The Legislature finds and declares the following:(a) The Department of Housing and Community Development (HCD) projects that the state needs to construct 1,800,000 units of housing between now and 2025.
(b) HCD also projects that 1,500,000 of those units need to be available for persons who are extremely low or very low income, indicating that at least 80 percent of the housing construction need is for California’s most disadvantaged citizens.
(c) According to HCD’s analysis, the state needs to produce an average of 180,000 units per year to meet these goals. Currently, the state has been constructing 80,000
units per year.
(d) In recent years, the cost of constructing a unit of housing has soared, due to a combination of escalating construction and material costs as well as increased land acquisition costs.
(e) In Los Angeles, the average cost per unit is over $500,000 and climbing. San Francisco has eclipsed New York as the most expensive city in which to build a unit of housing, at over $700,000 each. San Diego is approaching Los Angeles’ costs, at more than $475,000 per unit.
(f) Income limits for most affordable housing programs range from 30 percent of the area median income for extremely low income households to 120 percent of the area median income for moderate income households. In Los Angeles, for example, the area median income was $73,000 in 2019, which translates to $31,300 for an extremely low income family
of four and $52,200 for a very low income family of four.
(g) The homelessness crisis in our state has reached levels that are tragic and shameful. One quarter of the homeless population in our nation resides in California, numbering at about 130,000 families and individuals.
(h) With 30 percent of all California renters being rent-burdened, meaning that at least 50 percent of their income is needed to cover rent payments, millions of renters are less than a paycheck away from being forced to live on the streets.
(i) Research from the University of California, Los Angeles, points to a direct correlation between high housing costs and high numbers of homeless people.
(j) Families at very low income levels cannot afford to pay rent on a unit that costs
$500,000 or more to build.
(k) The gap between the costs of constructing a unit of housing and the affordability of that unit for low-income Californians continues to widen.
(l) Existing state programs that subsidize the construction of new affordable housing units perpetuate the high cost of construction. The irony of California’s affordable housing laws is that the units constructed are not affordable to the vast majority of Californians for whom they are targeted.
(m) The current tension between construction costs and affordability is unsustainable. California will never build itself out of its current affordable housing construction crisis if it does not change today’s construction cost paradigm.
(n) Even programs like Proposition HHH, a
$1,200,000,000 supportive housing construction program to combat homelessness overwhelmingly approved by the voters of Los Angeles and that has a project cost per unit of $350,000, has failed to rein in high construction costs, resulting in new Proposition HHH construction costs that range from $500,000 per unit to $700,000 per unit and a reduction of 41 percent in anticipated new housing. After three years, Proposition HHH has not led to the opening of a single unit of housing.
(o) This paradigm will never change if the state sustains the current housing construction model that is driving these high costs.
(p) There are alternatives to current construction modalities that can align the cost of producing a unit of housing with the affordability of the unit for persons who are low income.
(q) HCD, in summarizing its
commissioned report on alternative housing by the California Polytechnic State University, San Luis Obispo, has stated that:
(1) Smaller size units reduce the cost of entry to housing.
(2) There are strategies to cross-subsidize the price of units for low- and moderate-income households by using proceeds from high-income market-rate units within the same development.
(r) Adaptive reuse is the reuse of an existing building for a purpose other than that for which it was originally constructed. Examples of adaptive reuse include the rehabilitation of hotels and motels and converting unused public buildings into individual and family units.
(s) Modular construction is the use of factory-produced, preengineered units that are delivered and assembled onsite
and has recently included the frequent rehabilitation of shipping containers into residential units.
(t) California needs to lead the way in reducing the cost of constructing a unit of housing, and the state has the authority through its housing construction subsidy programs to demand those cost reductions.
(u) At the same time, the state needs to take advantage of the most progressive and innovative thinking in the housing development industry.
(v) Therefore, it is the intent of the Legislature that state housing construction subsidy programs prioritize alternative methods to produce housing units that are cost effective.
(w) It is further the intent of the Legislature that the development of housing on surplus state lands shall prioritize alternative
methods to produce housing units that are cost effective.