$140 Million Affordable Housing Bond on the November ballot

Last week the Santa Cruz County Board of Supervisors approved a $140 million bond measure for affordable housing to be included on the ballot for the November 6 General Election.
Widely recognized as one of the least affordable places to live in the United States, measured by the “affordability gap” between incomes and the cost of housing, the lack of “affordable” housing in Santa Cruz County has reached crisis proportions, for both families and the local economy-according to proponents of the bond measure.
Jim Reed, Mayor of Scotts Valley, waited in line with many others to give public testimony in support of the bond measure at the Board of Supervisors meeting.
 “This is public policy done the right way. This is the most pressing issue the people in Santa Cruz County face today. And when a well-crafted solution comes forward, it seems there is almost an obligation to put this directly before the voters and let the voters have their say,” Reed said to the county supervisors.   
The $140 million housing bond was brought to the Board of Supervisors by a broad coalition of organizations ranging from the Santa Cruz Chamber of Commerce to the Farm Bureau to the Monterey Central Labor Council, collectively dubbed “Affordable Housing Santa Cruz County”. This coalition building was led by former City of Santa Cruz Mayor Don Lane and former State Assemblymember and former Treasurer of Santa Cruz County Fred Keeley.  This network of business and political leaders, community service organizations, labor unions and nonprofit service providers will now be responsible for “selling” the affordable housing bond to voters over the next three months before the election.  
Business leaders have recognized the lack of affordable housing as the number one obstacle to recruitment and business growth. Business owner and Scotts Valley resident Derek Timm spoke to the board of supervisors from an employer’s perspective.
“Usually you wouldn’t have me up here asking for more taxes, but in this case, this is a well thought out proposal that addresses the most pressing need of small business owners and that is retaining our employees. I’ve seen it time and time again, small businesses losing good employees to the cost of housing,” Timmsaid to the supervisors.  
Payback of the bond funding will add an estimated $16.77 for each $100,000 of assessed property value to annual property tax bills. For a house assessed at $500,000, the bond will add approximately $83.85 to property taxes per year. The bond issue has a high bar of “super majority” approval of two-thirds of the voters to come into effect.     
If passed by voters, a minimum of $105 million or 75 percent of bond proceeds will fund new construction of an estimated 1,041 rental units and Accessory Dwelling Units with deed restricted rent limits for low and moderate income households.  Ten percent of the bond proceeds, or $14 million, is designated for “first-time homeowner loans” to help bridge the gap between the mortgage amounts that moderate income, first-time homebuyers can qualify for and the sale price of housing.  The remaining 15 percent of bond proceeds are designated for homeless facilities, including transitional and supportive housing, as well as funding for a year-round emergency shelter.
A unique aspect of the bond issue is agreements have been reached between the county and the four incorporated cities in the county as to how the bond proceeds will be allocated between them. Using a formula involving several factors of need, poverty and population size, local jurisdictions agreed to a “blended allocation” of funds to their cities. Scotts Valley and Capitola, for example, are scheduled to receive about $5 million each from the housing construction portion of bond proceeds, while the City of Santa Cruz is scheduled to receive just over $30 million.
This puts the types of projects funded by the bond proceeds firmly in control of the local jurisdictions. Leery of a “one size fits all” set of regulations in the type and size of projects that can be subsidized with the bond funds, the allocation of funds to local jurisdictions put local planning commissions and city councils firmly in control of how the money is spent in their jurisdictions.   
Nonprofit housing developers, such as Eden Housing Inc. and Mid-Peninsula Housing, built and continue to manage hundreds of affordable housing units in Santa Cruz County, but projects have been few over the last decade. Public funding for subsidized housing became increasingly scarce after the onset of the Great Recession in 2008, and was further reduced when local redevelopment agencies where dissolved as part of the state budget overall early in 2012.   
Nonprofit developers of both small and large rental projects, for low income seniors, families or special needs households typically need to leverage local funds to compete for state and federal grants and loans, as well as qualifying for tax credits and commercial loans, all of which are needed to make rent restricted, income-qualified rental projects financially feasible. Commitments of locally generated funds, which the bond funds will provide, will go a long way in leveraging other state and federal funds for affordable housing projects, explained County Supervisor Ryan Coonerty before voting to put the bond measure on the ballot.