California’s homeless population has soared in recent years, due in large part to the state’s housing shortage and affordability crisis.
Legislators have been working on various fixes, most notably passing several bills at the end of 2017 aimed at increasing the affordable housing stock and providing funding for more shelters and homeless services.
But this package of bills passed just a few weeks before the 2018 federal tax changes came to light. Buried in the new tax law is a change that reduces the low-income housing tax credit (one of many ways federal legislators chose to pay for some of their hefty tax cuts).
With the reduced tax credit, California will lose $540 million for its low-income housing programs, equivalent to 4,000-5,000 units.
This couldn’t come at a worse time.
Today’s homeless population numbers 134,000 in California, and this population continues to increase each year, according to State Senator Beall’s office. From 2016 to 2017, the state’s homeless population increased 14%.
For an extreme example, consider Los Angeles where the homeless population increased twice as fast as the state — over 30% in the past year alone, amounting to an increase of 13,000 homeless individuals. With shelters overflowing, most of the state’s homeless are literally living on the streets.
The rising tide of homelessness is just one visible reminder of the lack of low- and mid-tier housing available to house California’s growing population. High demand for few units has created today’s runaway home prices, which have kept many out of homeownership, slowing the income stream for real estate professionals.
An attempted fix
State senators are attempting to find a replacement for the missing funding.
Editor’s note — Multiple co-authors are joined together on this effort. Together, they represent various parts of the state: San Jose, Berkeley, San Francisco, Riverside and Santa Barbara.
Their bill, Senate Bill (SB) 912, seeks funding from the 2018-2019 budget to focus on providing services and shelters for vulnerable populations, including:
- the chronically homeless who otherwise may end up incarcerated;
- homeless college students;
- families who have previously been homeless;
- survivors of domestic violence;
- veterans; and
- persons who are physically or mentally disabled.
Providing shelter and services to the homeless population actually saves money, as it is much more costly to police and provide emergency care to the homeless than to simply provide shelter that reduces the need for these emergency services. But it does require an upfront investment that many tax-cutting legislators balk at.
Just how much of an investment is California willing to make?
It’s hard to say at this point — the original bill, which has since been amended, called for $5 billion in funding to address the homeless crisis. The amended version of the bill has removed all dollar figures, simply calling for generic “funding.”
While this language provides little guarantee, today’s bunch of state legislators have shown they are serious about doing their part to alleviate California’s housing crisis. We will have to wait and see just how committed they are to fighting homelessness when the final budget is passed later this summer.