Businesses and communities throughout the state are struggling to recruit companies and find qualified workers because of the pervasive shortage of housing. California must commit to funding and building more homes or the state’s economy could be imperiled.

There is universal agreement that sky-high housing costs are largely the result of a lack of supply. Local governments have an obligation to plan for and approve the housing we need, and we should promote state and local policies that stimulate the private sector to increase the pace of building to meet demand.

That said, even under ideal conditions, there will remain a need to subsidize affordable housing for our most vulnerable populations – very low, low and moderate-income families – because these units are often the most expensive to build and rents don’t cover those expenses.

To build more affordable housing, we need funding. And the state has to play a role.

That’s why the Orange County Business Council (OCBC) supports Senate Bill 5 (Beall, McGuire, Portantino). SB 5 addresses the problem head-on by offering a permanent, sustainable funding solution from the state. SB 5 would create the Affordable Housing and Community Development Program, which would provide cities and counties with resources to help fund the construction of affordable housing available to very low, low and moderate-income families. SB 5 funds can also pay for housing-related infrastructure, and transit-oriented and infill development

If cities have funding to build, they are more likely to plan for the housing they need. In the face of a crippling housing shortage, the state Legislature must act to provide a viable housing future for the state’s workforce. If changes are not made, the issue will only get worse.

Just how dire Orange County’s housing crisis has become was revealed last month in Orange County Business Council’s 2019-20 Workforce Housing Scorecard that highlighted a current housing deficit of 58,000 homes. As job growth outpaces new housing production, the report concludes that figure will grow to over 114,000 by 2045.

Throughout California, counties and cities are forecasting similar shortages. Statewide, more than 2.2 million extremely low-income and very low-income renter households – many on the brink of homelessness – are competing for only 664,000 affordable rental homes. That leaves more than 1.5 million of California’s lowest-income families without access to housing, while the state’s moderate-income working families also struggle to make ends meet as housing becomes less attainable.

Once fully implemented, SB 5 would provide up to $2 billion annually to fund projects approved under the program.

SB 5 is not redevelopment. The bill is carefully structured as an accountable financing tool that will be hyper-focused on housing, particularly affordable housing, and the necessary supportive infrastructure.

Furthermore, SB 5 creates a new statewide oversight body empowered to approve or reject all local government proposed projects. Cities and counties who receive funding must submit annual reports to the Legislature. In order to ensure fiscal sustainability, SB 5 creates an annual cap on available funds, and the Legislature can suspend funding for new plans during fiscal downturns. Lastly, SB 5 provides state resources to ensure funding for schools and community colleges are not impacted.

If we’re truly going to begin solving California’s affordable and workforce housing crisis, we need tools like SB 5 to help fund housing for those most in need. That’s why OCBC has joined with other business groups, labor, local governments and housing advocates in support of SB 5.