Helping Renters Helps All of Us
There is a threat hanging over the booming California economy. It is not rising interest rates, rising wages or even the gyrating stock market. It’s something much more mundane: housing. Gov. Gray Davis has an opportunity to use part of the $13-billion state surplus to counter this very real danger.
Housing, or rather the lack of affordable housing, could be the downfall of the state’s economy simply because it is too expensive for the majority of us who live here. The affordability gap is the reason that young families can’t get into houses of their own. Today, less than one in five young families owns a home, and they won’t be able to until middle age. And while the dream of owning a home slips away from the stable middle class, folks on the next rung down on the economic ladder are having even more trouble.
California is a state of tenants. Almost half of us rent. The proportion is higher in major urban areas: 61% rent in the city of Los Angeles. These are working people who do the jobs that we need but whom we often fail to reward with decent wages. The child-care workers, bank tellers, janitors and cooks in our communities earn $7 to $9 an hour, or $14,000 to $18,000 annually. These folks may never buy a home, but in the meantime, they have trouble even paying the rent.
The fact that so many of us can’t afford rent is a threat to all of us. Families that spend more than half their earnings on rent spend less on other things that keep the economy going. They don’t buy as much food or as many new clothes. They don’t go to the movies or out to eat as often. They don’t buy new CDs, new appliances, new computers, new computer games, cars or even health care. And all this “not-buying” affects the economy, especially neighborhood businesses.
Most of the jobs being created in California are in small businesses. Collectively, these enterprises depend on a wide customer base. A slowdown in one part of this economy can quickly ripple into others. And a slowdown is assured for small businesses that depend on local community buying if those communities do not have disposable income. The customers slow down, the jobs slow down, the economy grinds to a halt.
This used to be the stuff only of conversations among civic planners and economists. Now regular people are talking about it. People are talking about how they cope with longer commutes, share their homes with extended family or grown children returning home, and pay more and more rent. Employers, particularly small-business people, are talking about the lack of housing for their workers.
People are talking and Sacramento is listening. Supporting the construction of affordable and market rate housing is a standard plank in state Treasurer Phil Angelides’ speeches to business and community leaders across the state. In the last legislative session, Sen. Richard Alarcon (D-Sylmar) and Assembly member Carole Migden (D-San Francisco) proposed complementary bond bills to finance affordable housing construction and to help first-time home buyers at a level not seen in more than a decade. Longtime adversaries--the anti-poverty advocates and builders--joined together to support “jobs-housing balance” legislation.
As the state budget surplus grew, the emphasis on how to pay for new housing programs changed from borrowing to using money on hand. Assembly Speaker Bob Hertzberg (D-Sherman Oaks) led the Assembly Democrats in proposing a bold $1-billion housing plan, including major funding for affordable rental housing.
The Legislature’s final budget proposal contained $575 million for housing--the largest in the state’s history--including more than $250 million targeted for rental housing. This money would finance construction and rehabilitation of almost 9,000 quality, affordable apartments for low-wage workers throughout the state. It would mean more jobs in construction, maintenance, property management and retail, as well as increased disposable income for low-wage workers to spend in myriad ways that help their families--and the economy.
Even in times of plenty, there are competing interests. The governor now has to balance these interests to best serve all of California. Low-income renters are not a special-interest group; they are the backbone of our service work force. By signing the housing budget proposal, including all the funds for rental housing, Gov. Davis will lead the state in recognizing the very real threat that lack of affordable housing poses to our state.
