Democrats Urge $1-Billion Plan to Ease Chronic Housing Shortage

In what would be the largest investment of its kind in California history, the Democrats who rule the Assembly unveiled a $1-billion plan Thursday to help relieve the state’s chronic housing shortage.

The proposal would help people buy homes and fund a sweeping array of housing initiatives touching Californians in every corner of the state--from farm workers in the Central Valley to teachers in Los Angeles to dot-com employees in Silicon Valley.

It is aimed at easing a housing crunch that has made California home to 11 of the nation’s 25 most expensive housing markets, pushed urban sprawl deep into the state’s hinterlands and made two-hour commutes commonplace.

Democrats say the plan would help about 21,000 California families buy a first home and provide affordable rental housing for 19,000 others.

Its main components are $425 million to build and restore low-cost housing, $265 million to help working families buy homes, $175 million to clean up polluted urban parcels to spur in-fill development, and $100 million to house the homeless.

Politically, the plan represents yet another effort by the Legislature’s Democrats to up the ante on Democratic Gov. Gray Davis by pushing to spend more of the state’s massive budget surplus than Davis has advocated.

The proposal replaces a plan by Democrats to help resolve the housing crisis by putting a $1-billion bond on the November ballot. Davis had supported that idea.

Assembly Speaker Bob Hertzberg (D-Sherman Oaks) said Thursday that he had recently spoken with the governor and Senate President Pro Tem John Burton (D-San Francisco), and that both considered housing a top priority this year.

But Davis, Hertzberg said, supported a housing plan totaling $500 million, half the size of what Assembly Democrats now propose.

Hertzberg said he would fight for the entire $1 billion because lawmakers in the lower house want to seize the opportunity provided by the surplus and pay for needed programs now, rather than float bonds that would increase debt for decades to come.

He called the housing plan a “challenge to show how responsive we can be to the needs of the people of California.”

The governor’s office said Thursday that Davis had not seen the details of the Assembly Democrats’ housing plan and had no comment.

Momentum has been mounting in Sacramento this year to deal with a housing shortage that affects not only the lowest-paid members of society, but also teachers, police officers and other middle-class workers and the businesses that employ them.

Experts say that the state must build 250,000 new homes a year to meet its housing needs. But last year, only 140,000 housing units were built in California; about 152,000 are expected to be built this year.

The Assembly Democrats’ plan would seek to reduce that gap in several ways:

* A $265-million homeownership program would provide low-interest loans to first-time home buyers and grants to groups such as Habitat for Humanity that build homes for low-income residents.

* A $425-million rental housing program would fund new construction of housing for seniors, the disabled, families moving off welfare and others with low incomes. It would provide tax credits to provide housing to families earning less than 35% of the state’s median income.

* A $100-million emergency housing program would fund emergency and transitional housing for the state’s about 360,000 homeless people.

* A $50-million farm worker housing program would provide money to rehabilitate housing for migrant field hands, as well as health and housing for senior farm workers.

* A $175-million “smart-growth” program would promote efforts to curb urban sprawl, including cleaning up toxic sites for development and providing incentives to build low-cost housing near job centers.