It’s great that the free market works well for builders and buyers who want to make a lot of money or have a lot of it to spend. Supply and demand, however, only go so far. Housing is a basic human need that is crucial to giving children and families the ability to grow and thrive and the elderly a safe place to retire in peace.
By Roberto Jimenez
Roberto Jimenez is chief executive officer of the Sacramento-based Mutual Housing California, firstname.lastname@example.org. He wrote this commentary for CALmatters.
Where the free market has failed, California voters and their top elected official have taken the lead on the state’s housing and homelessness crisis.
Voters did their part in November when they approved $6 billion in affordable housing bonds, and Gov. Gavin Newsom followed up in his first budget proposal. It contained $2.25 billion to help shelter the homeless and assist working people pushed to poverty’s doorstep by high housing costs.
The bond measures and the budget action represent moderate steps to address the dire challenges that the free market has largely ignored, in a high-cost state where low- and moderate-income people still need places to live, even if it doesn’t pencil out for profit seekers.
While the free market works well for upscale home builders and buyers, the numbers tell us that when it comes to jobs, income and housing, it certainly is not working for all.
According to the U.S. Census Bureau, nearly 60 percent of California renters pay more than a third of their income to their landlords. For homeowners, some 40 percent of them pay more than 30 percent of their income on their mortgages. Call them “cost burdened,” too.
There are a plenty of international economic explanations for why the income many people earn from their jobs and the amount of money they have to pay for the roofs over their heads are out of whack. There are a lot of excuses, too, for a statewide housing shortfall that the Legislative Analyst’s Office has put at anywhere from 2.7-4 million units.
Whatever the explanation, or the excuse, the fact remains: in California, the high cost of housing propels the state from having the 16th worst poverty rate in the country to being the absolute number one when you work supplemental factors into the equation. Chief among them: the cost of housing.
With the free market incapable of leveling out the jobs-housing imbalance in California, our state is fortunate to have dozens of nonprofit affordable housing developers with professional and dedicated workers who are devoted to building and managing this crucial resource.
Our organization, Mutual Housing California, is just one of many nonprofits in the affordable housing industry. We provide homes to 1,071 households, of which 61 percent are made up of the classic working poor, with at least one adult employed at an annual income of $15,100.
It’s no secret where our residents would be if it were not for Mutual Housing. Some of them who had been living in homelessness would be sleeping on the streets. We know that others would be living in substandard apartments that we took over and rehabbed.
We know that the farmworkers living in our zero-net energy, World Habitat award-winning Spring Lake community in Woodland would be doubled up with other families in apartments or living in converted garages or in lean-tos in the fields.
We know that all of the hard-working, law-abiding people living in our communities would be paying upwards of 70 percent of their income for the roof over their heads.
We also know that we need to build a lot more. Just look at our waiting list – more than 2,700, or well more than twice our current portfolio.
More than anything else, Gov. Newsom’s budget proposals on housing and homelessness reflects a recognition at the highest level of this huge social problem and the shortcomings of the free-market system in fixing it.
It’s great that the free market works well for builders and buyers who want to make a lot of money or have a lot of it to spend.
Supply and demand, however, only go so far.
Housing is a basic human need that is crucial to giving children and families the ability to grow and thrive and the elderly a safe place to retire in peace.
Housing is a right, and safe, affordable housing should be available to everybody, no matter their income.