Much of what government does is wasteful, ineffective, and redundant. For example, Senate Bill 679 was recently signed into law by Gov. Gavin Newsom as part of the “housing and homelessness package” of bills intended to address the state’s housing shortage. While no one disputes the severity of California’s housing crisis, this legislation is seriously flawed.
SB 679 establishes the Los Angeles County Affordable Housing Solutions Agency and authorizes the agency to, among other things, raise and allocate taxes, incur indebtedness, and place tax measures on the ballot in Los Angeles County. It was modeled on a similar bill, Assembly Bill 1487 enacted in 2019, that authorized a regional approach to housing and homelessness in the San Francisco Bay Area.
Specifically, AB 1487 granted the Association of Bay Area Governments (ABAG) and the Metropolitan Transportation Commission (MTC) — acting as the Bay Area Housing Finance Authority (BAHFA) — the authority to raise billions of dollars to fund the production, preservation, and protection of affordable housing. Its purpose is to facilitate a regional approach to support local jurisdictions by providing additional funding mechanisms (taxes) to address infrastructure and other housing related needs.
A legislative analysis on SB 679 described the earlier bill as being “formulated in partnership with the Bay Area’s local elected leaders and other regional leaders to collectively ensure that the entire Bay Area is on track to provide affordable housing efficiently and effectively to all residents. That bill [1487] set forth the governing structure and powers of the board, allowable financing activities, and allowable uses of the revenues generated.”
HJTA opposed 1487 because it was focused just on raising revenue without seriously considering real solutions to the housing crisis. Authorizing new and increased parcel taxes when only 30% of Californians can afford a median priced home won’t do anything to increase homeownership and, in fact, reduces affordability. While most housing decisions belong with local governments, state policies could help, including by lowering impact fees, reforming inclusionary zoning to actually incentivize unit development, and removing costly mandates on new development.
Despite the bad housing policies in AB 1487, at least it recognized that the Bay Area needed a regional approach given the fact that nine different counties are in close proximity. But SB 679 had no such justification, a point specifically referenced in the Assembly’s own Committee on Appropriations staff report: “Such powers and capacities already exist within the county government.”
Further, “[s]ince Los Angeles County governs all 88 cities, unlike the Bay Area, which is made up of nine counties, it is unclear whether a new bureaucracy is needed to undertake actions that can already be carried out by Los Angeles County in conjunction with its cities.”
In opposition, the California Taxpayers Association made the same point: “The creation of an additional housing agency with the same taxing authority as local jurisdictions is unnecessary and inefficient. Additionally, the new agency would have the ability to impose countywide taxes and use the revenue for projects that do not benefit the taxpayers in all of the cities being taxed.”
We suspect that the real purpose of SB 679 is to give local politicians “plausible deniability” that they are responsible for raising taxes. “It’s not us,” they’ll be able to claim. It’s the state’s high taxes and onerous regulatory regime that slow development to a crawl and dramatically drive up the cost of construction. Adding another layer of taxation isn’t the solution.
Jon Coupal is president of the Howard Jarvis Taxpayers Association.