The national government signed affordable housing memorandums with 26 counties to steer the building of affordable houses for Kenyan citizens on Thursday. This ambitious plan is expected to solve the housing problem in different regions.
According to Tuko, Kenya today has a deficit of over 2 million house units. Sixty-one percent of the total population lives in slums of urban areas in overcrowded houses, usually in one room without the necessary ventilation.
It means that this deficit will continue increasing due to fundamental constraints exacerbated by a 4.4 urbanization rate, which is equivalent to 0.5 million new residents in cities every year. Thanks to the ambitious affordable housing initiative that seeks to solve this mystery.
Well, each county will construct a minimum of 2000 houses. This is a significant move that will improve the great challenge of decent housing we see in some areas.
Recent NCA news
Speaking in a two-day summit hosted at Nairobi, CS James Macharia said that the ministry had identified additional 121 land sites across 38 counties where these houses would be built.
“We identified an additional 121 potential land sites with over 12,000 acres across 38 counties,” the Transport, Infrastructure, Housing, and Urban Development CS said.
He added on and confirmed that the country is rapidly urbanizing, noting that the growth has not been matched with the similar speed in developing urban infrastructure and housing.
The CS cited that Kenya has a yearly urban housing demand of about 250,000 units against an annual urban supply of around 50,000 units, which mostly target the high-end market. He said that only 2 percent of these formally constructed rental houses targets the lower income segment of our country.
“Arising from these challenges, slums and informal settlements have proliferated in our urban and peri-urban areas across Kenya,” the CS said.
This forum brought together developers, financial consultants, architects, technology providers, a global network of investors, and government officials. The main objective of the meeting was to identify innovative and adequate affordable housing remedies for Africa and specifically in Kenya.
Under the Big Four agenda, the government is seeking to build at least 500,000 affordable housing units by the year 2022. To do so, it will work with the end-user for financing through outright cash sales, subsidized mortgages, and rent-to-own purchase options.
The national government also hopes that this initiative will attract members of employer-employee and cooperatives facilitated housing among other groups of Kenyans.
County governments, the private sector, financiers, landowners, and housing corporates among others have been roped in the initiative.
The program has the following components:
Mobilization of affordable housing finance.
Provision of supporting infrastructure.
Tapping innovative construction materials and technology.
Land identification and registration
The government is also offering legislation and incentives to facilitate future homeowners and developers. These include the stamp duty for first time home buyers aimed at reducing the financial burden to them.
NCA’s target is to ensures that all matters to do with construction and building are done as per the stated regulations. For more information about the agency go to.
Using government subsidies, tax credits and zoning changes, city leaders are encouraging builders to incorporate affordable housing into mixed-use projects.
WASHINGTON — The Wharf is a gleaming, $2.5 billion development that has transformed a long-stagnant waterfront into a major destination in the nation’s capital.
Along a mile of the Potomac River is an array of high-end hotels, entertainment venues, shops, restaurants and apartments. They include the 6,000-capacity Anthem concert venue, an InterContinental hotel and Vio, a luxury condominium where prices soared up to $2.9 million.
But the city has also required the developer to include affordable housing on the project’s 24 acres. Of the 761 units in the first phase of the development, 26 percent are listed as affordable, and more are promised in the second phase.
From Washington to San Francisco, municipal leaders are facing increased pressure to provide affordable housing. Using a combination of government subsidies, tax credits and zoning changes, they are encouraging developers to incorporate affordable units into mixed-use projects.
The Wharf development is a partnership between PN Hoffman and Madison Marquette, developers based in Washington. Monty Hoffman, chief executive of PN Hoffman, takes great pride in the affordable housing.
To make the Wharf project profitable, the partners sought to adjust the mix and build more units over all. The District of Columbia lowered its price for the land and reduced the percentage of lowest-cost housing while permitting more below-market, moderate-income “work force” units.
“It allowed us to avoid residential offerings only at the extreme ends — deep affordable and waterfront market rate,” Mr. Hoffman said. Absent such concessions, he said, he would have needed more office, hospitality, retail and market-rate housing to make the numbers work.
“We did not want to create a tourist or office-centric park,” he said. “We wanted a balanced community.”
Developers across the nation are finding that economics are crucial in determining how many and at what price such units may be included for a mixed-use project to be both socially responsive and financially profitable. And they are working with community leaders to find the right equation.
To further construction of multifamily units, Minneapolis recently moved to rezone most of the city to ban new single-family homes. Several Sun Belt cities, including Atlanta, Austin, Tex., and Houston, now require a percentage of affordable units in any mixed-use project.
California’s landscape is more challenging. Its residential property tax cap, an amendment to the State Constitution passed in 1978 and known as Proposition 13, forced localities to push for commercial development to generate revenue needed for schools, parks, the police and other public services.
Still, developers there are including moderate-income units in the mix, said Michael A. Covarrubias, chief executive of TMG Partners, a developer based in San Francisco. But, he added, the high cost of land has made that difficult. And the developer has to contend with residents opposed to gentrification in their neighborhoods.
“Affordable housing has been unavailable,” Mr. Covarrubias said. “It’s a hornet’s nest and a complicated road you go down to get the volume you need.”
To help address the problem, the tech giant Google has pledged to invest $1 billion in land and money to build homes, including those deemed affordable in the Bay Area. In Northern Virginia, JBG Smith has raised $78 million from investors for housing aimed at those who earn too much for government help but not enough to afford market rates. The firm is the dominant landlord in Crystal City, the section of Arlington where Amazon is locating its second headquarters, with 25,000 new jobs.
In Washington, market forces threaten to overtake government efforts to slow the gentrification of previously low-income neighborhoods, making them less affordable for longtime African-American residents and leading to cultural clashes.
The Metropolitan Washington Council of Governments has said the region needs to build more than 100,000 housing units by 2045, of which 40 percent should serve the lowest-income residents. Separately, the District of Columbia has set a goal of 36,000 units by 2025, of which 12,000 would be affordable. To reach that goal, the district’s mayor, Muriel E. Bowser, has offered solutions that include a $100 million annual housing production trust fund, regulatory relief and a higher building height limit.
“We just have to do many different things,” said Brian T. Kenner, a former deputy mayor for planning and economic development, who left district government on July 2 to work for Amazon. “Things we did before we have to alter, whether it’s making inclusive zoning even more robust or limited setbacks.”
The challenge for local governments is to find incentives like tax breaks that encourage developers, Mr. Kenner said. “Government can’t buy its way out,” he said.
But government, he said, remains concerned about the negative impact of development, which can displace residents as it alters neighborhoods.
The issue has come into focus with plans to turn Brookland Manor, an 80-year-old, 535-unit garden apartment complex in northeast Washington, into a 1,700-unit, $600 million mixed-use development.
The old complex included a small strip shopping center. Once predominantly occupied by low- and middle-income white families, the complex became home to a mostly African-American community after whites left the district for the suburbs. In deteriorating condition, it underwent a federally subsidized renovation in the early 1970s that led to litigation from residents who feared displacement.
That same battle is being replayed as MidCity Financial Corporation, its owner, seeks to triple the number of units, including townhomes and 22 percent lower-cost apartments alongside 181,000 square feet of retail. Residents are divided, despite MidCity’s promises to avoid displacing them. Some tenants object to the elimination of 134 four- and five-bedroom apartments for large families, and two lawsuits are working their way through the courts.
Two original buildings have been razed, as has the old shopping center, now a fenced-in lot with a sign urging an end to all gun violence. Despite the complaints of some residents, the proposed number of affordable units exceeds city requirements.
The District of Columbia is in a stronger position with properties it owns or controls, and requires 30 percent affordable housing units. The city encompasses several large parcels of former federal land ripe for development. These include the former Walter Reed Army Medical Center and St. Elizabeths Hospital, east of the Anacostia River. The 190-acre Robert F. Kennedy Stadium site is also up for grabs.
Developers and community groups are monitoring these parcels closely. To show activists the projects under development or soon to be, the Washington Interfaith Network ran several bus tours this year. Tour guides noted potential conflicts as the city seeks to reap new tax revenue while requiring developers to include socially desirable, if less profitable, features.
“At some point, you realize there’s just a machine that’s running,” said the Rev. Frankey Grayton, pastor of Edgewood Baptist Church in Washington and a prominent activist with WIN. “The development is happening at an alarming rate.”
Pastor Grayton was standing in front of a fenced building site in what is known as Hill East, a 67-acre parcel on the Anacostia River. City planners have long envisioned this tract, home to the now-closed D.C. General Hospital and other social-welfare buildings, as perfect for waterfront development.
As this prospect comes closer into view, community activists are organizing to ensure that low-income housing is included. In the first two buildings, it already is.
On what was the parking lot of D.C. General, a 202-unit, five-story apartment building is rising, one of two that will be the vanguard of Hill East. There will be 25,000 square feet of ground-floor retail and 106 low- and moderate-priced rentals, 30 percent of the total.
But it has been nine years in the making. After many meetings, hearings, permits and approvals, the mixed-use project is finally happening.
“It takes a village, as we say, to figure out the finances, the uses, the zoning,” Mr. Covarrubias, the San Francisco developer, said. “It’s a long, slow process.”
A growing number of Americans are struggling to cope with the high and rising cost of rental housing in the United States. On any given night last year, more than half a million Americans were homeless. Nearly 11 million households managed to keep a roof over their heads only by spending more than 50 percent of their income on rent, sharply curtailing their spending on food, health care and other needs.
Millions more cannot afford to live in the neighborhoods where children are most likely to thrive, or in the cities where jobs are concentrated.
Democratic presidential candidates are promoting industrial-strength plans to ease the pain. The ideas come in two flavors: subsidies for renters, and efforts to increase construction.
The focus on construction is a welcome development. The United States is in the depths of a decade-long construction drought that is driving up the cost of existing homes. Builders added about 1.2 million units last year; Harvard’s Joint Center for Housing Studies estimates the nation needs another quarter-million units a year to keep pace with population growth. A key reason for the shortfall is that local governments are impeding construction.
Three candidates — Senator Cory Booker of New Jersey; Julian Castro, the former secretary of housing and urban development under President Barack Obama; and Senator Elizabeth Warren of Massachusetts — have proposed that the federal government should pressure local governments to allow more development.
Mr. Booker and Mr. Castro have proposed that the federal government should require local governments to adopt land-use reforms before they can obtain federal funding for infrastructure projects. The point is not to mandate construction of skyscrapers in place of suburban subdivisions. Rather, it is to require local jurisdictions to make reasonable plans to accommodate population growth — for example, by allowing small-scale apartment buildings in single-family neighborhoods. It is simply not in the public interest to subsidize infrastructure in cities that are preventing housing construction.
Ms. Warren has proposed a variant on the same theme: awarding $10 billion in new funding to governments that adopt land-use reforms. In addition to the philosophical case for using carrots rather than sticks, Ms. Warren’s program aims to induce greater participation by wealthy low-density communities that receive relatively little money from existing programs.
This is similar to the Obama administration’s Race to the Top education grants, which were awarded to states that adopted changes like performance-based teacher evaluations. Forty-six states and the District of Columbia sought grants under that program, and 18 states, along with the district, enacted policy changes.
More market-rate development is a worthy goal in its own right, because middle-income households increasingly are unable to afford housing in the metropolitan areas where economic opportunity is concentrated. Expanding the supply of housing also helps low-income families who might otherwise find themselves priced out of their apartments.
This embrace of deregulation merits particular praise because the states most resistant to allowing housing construction are the strongholds of the Democratic Party, in the Northeast and along the Pacific Coast, and the most resistant voters are the wealthy residents of those states who provide so much of the funding for Democratic presidential campaigns.
There is also a real prospect that a Democratic president could persuade Republicans to adopt such a plan. Some Senate Republicans have expressed broad support for the concept; President Trump recently created a White House council to explore the issue.
Market-rate development, however, is not a sufficient solution. For millions of lower-income Americans, the rent is simply too high. A variety of government programs, including public housing, subsidized housing and rent vouchers, provide affordable homes for roughly five million families. But as many as 18 million more need similar help. Families with small children who spend more than 50 percent of their monthly income on rent must forgo other necessities. On average, they spend 35 percent less on food and 74 percent less on health care than families with the same incomes who are able to find affordable housing.
Several presidential candidates have proposed expanding federal subsidies for renters.
Senator Kamala Harris of California has proposed a new tax credit, at an estimated cost of $93 billion a year, for lower-income renters who spend more than 30 percent of their income on housing. Mr. Booker has proposed a more generous tax credit for renters that would cost about $134 billion per year, largely because it does not phase out benefits for renters whose incomes approach the maximum for eligibility.
And Mr. Castro has proposed an even more expansive — and expensive — package: He would offer housing vouchers to any family making less than 50 percent of the local median income, roughly quadrupling the existing Section 8 housing voucher program, and he would offer a tax credit to any family making between 50 and 100 percent of the median income and paying more than 30 percent of its income in rent.
The four candidates — Mr. Booker, Mr. Castro, Ms. Harris and Ms. Warren — also have proposed policies to increase homeownership, particularly among minorities. Such policies, if successful, could ease the demand for rental units. But the details of their proposals vary significantly, and deserve separate consideration.
The plans for rent subsidies reflect a tendency among the crowded field of Democratic candidates to behave as if the election were an auction in which the highest bidder will claim the nomination.
The Harris plan is particularly ill conceived because she has not proposed any companion effort to increase the supply of housing. There is a surface logic to giving money to people who can’t afford to pay the rent. Increasing the demand for housing without increasing the supply, however, tends to drive up prices. A 2005 increase in the value of federal housing vouchers ended up lining the pockets of landlords, according to one study.
Mr. Booker and Mr. Castro both have proposed to increase federal subsidies for the construction of affordable housing, but the dollar figures are dwarfed by the subsidies for renters. The priorities should be reversed: Building housing should be the primary goal.
Ms. Warren has avoided any increase in rental subsidies, proposing to focus exclusively on construction. But the implicit logic, that any given dollar is best spent on building, goes too far. Increasing the supply of housing is the work of decades, and many lower-income families require rent subsidies even to afford construction-subsidized buildings.
Rent subsidies also hold promise as a tool for reducing residential segregation. Poor children raised in economically diverse neighborhoods thrive by comparison with those raised in concentrations of poverty, yet subsidized housing tends to be built in neighborhoods with high levels of poverty. Under the Obama administration, renters in some cities were offered larger vouchers if they agreed to move to areas with better schools, where housing tends to be more expensive.
The early results were promising, and the program deserves to be revived and expanded. Proposals to make federal infrastructure funding contingent on land use reform also might be usefully extended by requiring affluent communities to accept affordable housing projects.
The federal government is an irresistible force when it chooses to prioritize an issue. It is past time to prioritize the availability of affordable housing.
Ikea is set to make its first foray into UK housing, after being granted permission to build up to 162 new homes in Worthing.
With houses in the seaside town selling for around 11 times the average salary, Worthing Council says this innovative move will utilise unused land and improve affordability for first-time buyers.
But how expensive will the homes really be, and is a return to prefabs really the answer to the housing crisis?
Ikea to build houses in the UK
Worthing Council has voted in favour of a partnership with Ikea to build affordable homes in the town.
The flat-pack favourite will build houses through its development company, BoKlok, which is a joint venture with the construction firm Skanska. While the name might be new to the UK, BoKlok has already built around 11,000 homes in Scandinavia.
BoKlok primarily builds low-cost modular homes, which are created offsite in a factory and then assembled on location. The homes in Worthing will range from one-bedroom to three-bedroom apartments, and all will include Ikea kitchens and interior furnishings.
There’s good news for cash-strapped first-time buyers, too, as BoKlok has promised the homes will be sold with 25-year mortgagesat a price that’s ‘affordable for a single parent.’ Currently, the average salary in Worthing is around £25,500.
Worthing Council will be allocated 30% of the properties to use for social housing, and the developer will sell the rest itself through a ballot system.
It’s expected that the new homes will arrive by 2021, and if the partnership proves successful, a deal is lined up to build 500 more properties.
Can modular builds solve the housing crisis?
Ikea is best known for its flat-pack furniture, but it wouldn’t be fair to describe these homes using that term.
Rather, they’ll be high-quality modular properties created in factories.
When you think of modular homes, your mind might move towards the garish prefabs of a few decades ago, but the truth is that both design and technology have improved significantly since then.
This has even resulted in some developers, such as the German company Huf Haus, building high-end energy-efficient modular homes to the specifications of individual buyers.
Some experts believe factory-built properties could solve the housing crisis, as they can be delivered more quickly than bricks and mortar homes (due to mass production techniques and a lack of exposure to the elements), and with better quality control.
The German developer Huf Haus creates energy efficient timber-framed modular homes.
Are developers embracing modular homes?
With the government aiming to build as many as 300,000 homes a year by the mid-2020s, factory-built properties are an attractive option, on paper at least.
And in the last year or two there’s been a significant swing towards modular housing.
Just last month, the housing association Places for People agreed a £100m contract to buy 750 factory-built properties, while Homes England invested in a venture with the Japanese Modular company Sekisui House to build thousands of new modular homes.
And there are signs that the biggest developers are taking notice, too. Last December, Berkeley Homes announced it was on track with the construction of its own modular housing factory, which is expected to be completed in 2020.
Persimmon and L&G Homes are also in the process of building factories.
Central Park, in Sydney, Australia, is one of the most unusual examples of modular housing
Cost issues with modular housing
Despite all of these positives, there remains some distance to run before factory-built homes can compete with traditional methods of construction in the mainstream market.
One barrier is cost. In April, the property analyst JLL said that while traditional methods are unsustainable in long-term due to an ageing working population and a reliance on eastern European bricklayers, modular housing isn’t necessarily a viable alternative.
JLL claims that many major developers are still shying away from off-site production, as the construction cost is 12% higher than traditional methods. It concludes that many modular factories are only surviving because they are taking on hotels, student accommodation and commercial units to increase their profits.
Some critics have also raised concerns that while land values remain so high, it’ll be difficult for modular homes to be a truly affordable alternative to bricks and mortar.
Mortgages for off-site homes
As the popularity of modular homes grows, it’s likely that mortgage lenders will need to come up with specific lending policies.
Right now, modular properties are sometimes categorised alongside self-build homes as ‘modern methods of construction’, or MMC.
Most major lenders don’t currently have a clear policy on MMC, for two reasons.
First of all, the MMC category contains vastly different types of home. A self-build will require finance being released at different points of the project, while a modular home will require a more traditional mortgage offer.
Then, there’s the question of valuations. Lenders might not have the specific expertise to assess a modular home for valuation purposes as they would with a traditional bricks and mortar property. Throw in questions around insurance, and it’s easy to see how much work must be done.
With this in mind, it remains to be seen how the biggest banks will adapt their eligibility rules over the next few years as more off-site homes are built.
Facing a shortage of affordable housing or shelter accommodation options, Maine’s homeless people, or those at imminent risk of becoming homeless, are being offered tents and camping gear, according to officials.
The general assistance administrator for the state, Jodie Stout, told the local Bangor Daily News newspaper that during good weather the city can’t put people in temporary housing in Waldo county, so it’s offering outdoor camping gear instead.
According to the paper, demand is so great that local residents have begun inviting donations of camping gear to help meet demand.
One single mother, who gave her name as Angie, said she was facing eviction from her apartment after falling behind on her rent when Waldo county officials offered to help her find a tent for her and her two kids.
“It is a little discouraging to be told that all we have to offer you is a tent,” she said. “It really is actually blowing my mind, too. I didn’t realize there was such a need.”
Belfast officials say it is municipal and state policy that in nice weather, the city can’t put people into temporary housing such as hotel rooms unless the homeless person has a medical condition.
Stout said that’s when she had the idea to use social media to ask for donations of tents, sleeping bags and other camping gear. “Sleeping bags. A cooler,” Stout said. “You have to think, they can’t have a refrigerator. What can they put their food in?”
However, being given a tent doesn’t confer the right to pitch it. Three months ago, in nearby Bangor, city officials cleared out a large homeless encampment, an action that resulted in more numerous, smaller camps springing up around the city.
Advocates for the homeless said the policy would ultimately force homeless populations to retreat into the deep woods where they are less visible but where they are also less likely to receive social services they need.
The homeless problem in Maine conforms to many across the country. On Skid Row in downtown Los Angeles, property owners are going to court to block a legal settlement that restricts the city’s rights to clear homeless encampments.
Under the settlement the city reached in March and made public in May, authorities can haul away and destroy sofas, pallets and hazardous materials, but may no longer toss homeless people’s personal property that exceeds what would fit into a 60-gallon garbage bag or container.
The Finance Minister’s budget proposals, such as a model tenancy code, making government land available for affordable housing, interest exemption on affordable housing could give a big push to affordable housing and help developers who are hit by credit crunch.
“Lack of land availability and rental housing policy have been big bottlenecks for affordable housing.Both (freeing up land and establishing model tenancy code) will help push affordable housing,” said Ramesh Nair, chief executive at JLL, a property consultant.
Nair said that government could come out with tax incentives for developers doing rental housing.
“The new model tenancy, which is likely to be re-introduced, is expected to balance the rights and responsibilities of landlords and tenants and will make the rental market more efficient and streamlined across the country,” said Megha Maan, senior associate director, research at Colliers International India.
Experts added that the interest exemption upto Rs 3.5 lakh for affordable housing would help boost residential sales.
“Interest deduction up to Rs 3.5 lakh for affordable housing, as against Rs 2 lakh earlier, is available till March 31, 2020. This is expected to drive the much-needed urgency in sales and bring the fence-sitters back into the market within this financial year,” said Aashish Agarwal, senior director, valuation & advisory at Colliers International India.
Modi Government 2.0 has continued its push for affordable housing by increasing annual tax exemption on interest paid for self-occupied property from Rs 2 lakh to Rs 3.5 lakh besides making available land from public sector enterprises for construction of affordable homes.
The government will also bring in a model tenancy law to push utilisation of vacant houses in a country where real estate sales are moving at a sluggish pace due to high prices.
Pankaj Kapoor, MD and founder of real estate consultancy Liases Foras, said the increase in tax exemption for houses under the Rs 45 lakh bracket will push sales in the category which has 6.87 lakh unsold units over 50 cities and contributes 53 per cent of the total unsold inventory. “This measure will help in clearing up inventory and make houses affordable to customers,” Kapoor said.
“This is expected to drive the much-needed urgency in sales and bring the fence-sitters back into the market within this financial year,” Aashish Agarwal, Senior Director, Valuation and Advisory at Colliers International India.
Cumulatively, this will result in annual savings of nearly Rs 7 lakh for first time homebuyers. It will include Rs 3.5 lakh on interest, Rs 1.5 lakh tax exemption on principal and subsidy under the Prime Minister Awas Yojna (PMAY) where households with an annual income of up to Rs 18 lakh can avail Rs 2.3 lakh upfront subsidy.
“Already, the GST on affordable homes is only one per cent. The measure will collectively be a big driver for real estate,” Kapoor added.
Allowing the use of PSE (public sector enterprise) land for housing will also help bring down housing prices. “In the last 14 years, land prices have increased ten times. This has increased the cost for builders and pushed up sales price, making houses unaffordable,” Kapoor pointed out.
“The use of government’s land parcels for public infrastructure and affordable housing shall narrow the demand-supply gap,” Megha Maan, Senior Associate Director, Research at Colliers International India, said.
“Providing land from PSEs for affordable housing will help solve land acquisition problems and make prices more rational,” she added.
On rental housing too, the government continued the push created by the previous government, which had put forth a draft urban rental housing policy in October 2015. It was aimed at promoting public-private partnerships to accelerate rental housing and address shortage in urban areas.
As per the Census 2011, there are 11 million vacant houses in urban India. “A new tenancy law will bring this supply out in the market and put pressure on the already low rentals. There will be far reaching implications on over-priced housing inventory,” Kapoor said.
“The rental yield will go down further and put pressure on prices of builder inventory. Any model act will safeguard the interest of tenants and owners,” he added.
Maan said the new model tenancy law will balance the rights and responsibilities of both landlords and tenants. “It will make the rental market more efficient and streamlined across the country,” she added.
The government also said it will purchase pooled assets of financially sound NBFCs, amounting to Rs one lakh crore during the current financial year. The government will also provide one-time six months partial credit guarantee to public sector banks for first loss of up to 10 percent.
However, the measure is only applicable to financially strong NBFCs, making it difficult for those which are struggling to benefit from the proposal.
Sitharaman also said nearly 1.95 crore houses are proposed to be provided to eligible beneficiaries under the Pradhan Mantri Awas Yojana (Grameen) in rural areas. The completion of houses that required 314 days in 2015-16, has now come down to 114 days since 2017.
Since the PMAY (Urban) was launched in June 2015, construction has been started for 46 lakh houses out of which 26 lakh have been completed.
In January, not even a week into his new job, Gov. Gavin Newsom made a big, bold threat to cities that have stalled or shirked their responsibility to build enough housing to meet their community’s needs.
Don’t build housing? You won’t get state transportation dollars, the governor warned.
Six months later, Newsom is settling for a more incremental, but still necessary, change. The Legislature is expected to sign off this week on a bill that would allow a judge to impose steep fines — up to $600,000 a month — on cities that willfully flout the state’s “fair share” housing law, which requires that jurisdictions plan and zone for enough market-rate and affordable housing to meet population growth.
Note one big difference: Newsom originally wanted to hold cities responsible for actually producing enough housing to meet state goals. The compromise with the Legislature merely requires them to plan for enough housing.
This isn’t exactly the dramatic action on the state’s debilitating housing shortage that Newsom pitched. His original idea to withhold gas-tax-funded transportation dollars proved to be a nonstarter with legislators, who feared a public backlash, particularly after Californians voted to uphold the gas tax hike to pay for local road repairs and transit investments.
Cities, too, raised concerns about whether they could meet new homebuilding goals.
There are currently few consequences for local governments that fail to comply with the basic requirements of the state’s ‘fair share’ housing law.
The revised proposal offers what Newsom and legislative leaders describe as a carrot and-stick approach. The carrot is the promise of more money for jurisdictions that adopt “pro-housing” policies.
Those cities would have an advantage when applying for state grants, including for cap-and-trade dollars for transit-adjacent affordable housing and for funding for sidewalks, sewer lines and other infrastructure projects to support housing development.
The stick is the threat of steep fines for cities that repeatedly refuse to zone enough land to accommodate sufficient affordable and market-rate housing.
Yet those penalties could only be imposed after a lengthy process. The attorney general would have to file a lawsuit — as Newsom and Attorney General Xavier Becerra did earlier this year against the city of Huntington Beach.
Under the bill, if a judge agreed with the state, the city would have another year to come into compliance.
If the city still refused, it would face rising penalties that could reach $600,000 a month relatively quickly. Eventually, the judge could appoint someone to take over the zoning and land-use for the city.
The stick would fall only on cities that are the most obstinate. It is a necessary step because there are currently few consequences for local governments that fail to comply with the basic requirements of the “fair share” law.
This change, even if it won’t result in a flood of new homes getting built in the next few years, is an important step in a process of overhauling the state’s laws to require local governments to make room for more housing at all income levels. But it’s only one step.
There’s a lot more work needed to further tighten laws and to make sure they are enforced, so that it’s harder for elected officials to bend to NIMBY impulses to block reasonable housing projects.
The lack of housing, especially affordable housing, is driving an epidemic of homelessness. Even people who don’t become homeless often cannot afford to live in coastal urban areas, and have to move to far-flung suburbs and commute hours to where the jobs are, worsening traffic and air pollution and greenhouse gas emissions.
Employers say high housing costs also hurt the state’s economy by making it hard to attract and retain skilled workers — a problem that has led some companies to relocate to states where their middle-class workers can afford to buy homes.
Newsom was right to think big on California’s housing crisis, which he called “an existential threat to our state’s future.”
The compromise bill before the Legislature is a worthwhile reform, but the governor needs to keep pushing for much more change if California going to finally end the housing shortage.
WALVIS BAY – Minister of Urban and Rural Development Peya Mushelenga says access to affordable serviced urban land and housing remains a key challenge.
He noted that government takes cognisance of the fact that many Namibians are still without land and decent shelter, hence the working around the clock to address the challenge.
Mushelenga was speaking at the official opening of the three-day high level consultative retreat organised by his ministry for governors, mayors and local authority chairpersons to address the challenges faced by stakeholders in terms of service delivery and the provision of affordable housing and land.
The minister said that access to affordable serviced land and housing is a global problem, especially in developing nations where the majority of the populations are not able to buy serviced urban land or houses due to high market prices.
“The ministry for this reason embarked on addressing these challenges through massive urban land servicing and mass housing development initiatives. However, these programmes call for the involvement of both the public and private sector,” he added.
Mushelenga said the government would continue providing budgetary support to regional councils and local authorities to service land and develop other basic services to keep up with the Harambee Prosperity Plan (HPP) and national development targets.
“ I recognise the important role being played by community-based housing initiatives such as the Namibia Housing Action Group, Shack Dwellers Federation and other similar initiatives in complementing government efforts in financing and facilitating the construction of affordable housing for our low-income earners,” Mushelenga informed delegates.
He said the Ministry of Urban and Rural Development will continue to work with and support these community-based housing groups as they all complement government’s goal in providing affordable dignified housing to all Namibians.