Perspective: Regional bond would be a big flop for housing affordability crisis
Opnow Special Report : December 4, 2023 (excerpt)
California finance expert Tom Rubin analyzes MTC’s proposed $10–20 bn bond measure, which would chuck some greenbacks at jurisdictions in the name of developing/preserving affordable housing. Not only does the measure lack clear performance metrics (um, are we talking 100 or 10,000 units produced?), but it neglects key market problems — suggesting instead we hand gov’t (more) cash to figure everything out.
Opportunity Now: Is it just us, or does the Metropolitan Transportation Commission’s latest proposal to invest — cough — $10–20 billion in “affordable housing” in California feel a bit déjà vu? This isn’t the first time they’ve attempted something like this, right?
Tom Rubin: MTC has been working on this big housing bond concept for years now.
Pre-Covid, their plan via CASA was to provide $2.4 billion annually in housing from about 12 different sources. However, there wasn’t much information made available about how many houses CASA would reap, and when. What made the situation even more difficult was, since it was officially a private sector thing (involving community groups and nonprofits, although public interests were represented at the table), there were not open meetings and records weren’t publicly available. Nevertheless, CASA died for a couple of reasons, COVID being one of them.
Now, MTC has several alter egos. One of them is known as the Bay Area Housing Finance Authority (hereafter BAHFA). BAHFA can put ballot measures before the public, and they don’t have to fulfill as many requirements as far as specifying what the measures would do. For the newly proposed “regional housing bond measure,” MTC took this same route. They put it under BAHFA’s name.
ON: Is their proposal with this bond measure any clearer than CASA’s?
TR: Here are highlights of what we know: it’s a pretty large nine-county bond issue. I’ve seen $5, $10, and even $20 mentioned as far as the first round of funding. Oddly enough, this is not very much money considering its claims to produce, preserve, and protect affordable Bay Area housing.
Overall, this measure is difficult to pin down because they haven’t put it in writing anywhere how many new homes it’d create — or what specifically the money is supposed to accomplish. So it’s hard even to assess the bond, since we don’t know what it would produce. In my opinion, the absolute first requirement for any measure is stating its purpose: its desired end result (in quantified terms)…(more)
