State and federal funding for affordable housing suffered a sharp decline in Santa Clara County last year, placing a greater burden on local governments to address the housing crisis.
Cuts in state and federal funding decreased by 24%, resulting in a $225 million decrease in funding for affordable housing, according to a report released earlier this month by the housing think tank California Housing Partnership. The county received $700 million to build affordable housing in fiscal year 2023, up from about $925 million the year before.
The reduction is due to significant cuts to a federal program that helped fund housing for extremely low-income families and the depletion of revenue from Proposition 1, a state housing bond approved by voters in 2018 that helped veterans already low- to moderate-income families to buy homes.
“The loss of $225 million in state and federal funding will likely continue and lead to a reduction in the number of affordable housing options,” Preston Prince, executive director of the Santa Clara County Housing Authority, told San José Spotlight.
Additionally, Governor Gavin Newsom is proposing to cut hundreds of millions of dollars more in state affordable housing initiatives.
Fate: National COO Ray Bramson said cuts in state and federal funding will put the onus on local governments to subsidize affordable housing.
“It makes local funding even more important,” Bramson told San José Spotlight. “We’re going to need the city of San Jose and the county to play the role of ‘soft lender’ (to subsidize affordable housing).”
Bramson points out the importance of preserving San Jose’s Measure E funding for affordable housing, money the city has proposed using to clear waterways for homeless people and build temporary shelters. Measure E is a property transfer tax approved by voters in 2020, primarily for the purpose of building affordable housing, although up to 25% can be used to assist homeless residents with programs and services. Building affordable housing is the key to preventing homelessness, Bramson said.
According to the report, three-quarters of extremely low-income families are already spending more than half of their monthly wages on housing, and 54,600 low-income households cannot find affordable housing. People need to earn approximately $60 per hour to pay the requested rent of $3,000 per month. San Jose’s minimum wage for most workers is $17.55 an hour.
As rent and the cost of living continue to rise, Bramson said this will affect more vulnerable families and put them on the streets.
“They are one paycheck away from being homeless,” he said. “We have thousands of people on the streets right now, and we will see more seniors, families and individuals on the streets if we do not continue to significantly increase the production of deeply affordable housing.”
As of last year, the county’s homeless population has grown 3% since 2019, totaling 10,028 people, of which 1,026 are in families. For every Santa Clara County household that was housed in 2023, nearly two households became homeless, according to the county report. year-end analysis of its 2020-25 Community Plan to end homelessness.
In 2016, the county passed Measure A, which allocated $950 million to build affordable housing. But that money has been fully allocated as of this year. The county’s sources for funding affordable housing remain largely uncertain at this time, Bramson said. In November, voters will decide whether they want to support a regional bond that would put between $10 billion and $20 billion toward affordable housing in the Bay Area. Santa Clara County could receive up to $2.4 billion and San Jose could receive another $2 million from the bond.
“The reduction in state and federal funding and subsequent negative consequences could be reversed if the state Legislature places an affordable housing bond on this year’s November ballot and voters approve it,” Prince said.
Contact Joyce Chu at [email protected] or follow @joyce_speaks on X.
