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It Takes a Village to Solve Bay Area’s Housing Crisis

Governor Newsom meets with a number of Silicon Valley executives and non-profit housing and homelessness advocates to discuss solutions to the state’s housing crisis

In the past few months, Apple, Google and Facebook announced multi billion-dollar investments in housing. Gov. Gavin Newsom has made housing a top priority of his administration, committing an unprecedented $1.75 billion to spur housing development. The state legislature has passed a record-breaking number of housing bills in the past two years. And last week, Newsom called a meeting of the state’s top business leaders and asked them to do even more.

The urgency public and private sector leaders are bringing to housing reflects an increasingly dire reality statewide. In the Bay Area alone, tens of thousands of individuals are cycling into homelessness annually, and there are 175,000 more on the brink of homelessness. Addressing this need would require construction of 188,000 new units of affordable housing by 2023 at a cost of $94 billion.

If we are to upend the status quo, we must do more than simply sustain our current momentum. We must engage on this issue in a fundamentally new and collaborative way. We see four primary levers

  • First, density and zoning. Onerous land-use requirements make it nearly impossible to identify parcels for multi-family housing or move affordable projects forward at the scale required. For example, 94% of all developable land in San Jose and 62% in San Francisco is zoned only for single-family housing. We need more flexible zoning with much greater density near services, transit corridors and surrounding urban areas.
  • Our second challenge is time. It can take five to seven years from project inception to completion. This is too long given our immediate housing needs, and makes housing more expensive, since construction costs escalate at over 5% each year. Entitlements for affordable-housing projects need to take months, not years, and we need our elected officials to address these inefficiencies and regulatory hurdles for affordable housing.
  • Third, we must reduce the cost of construction. We have serious work to do to make up for decades of minimal innovation in the industry and to address our shortage of skilled construction workers. Even now, as construction innovations begin to advance, they are hindered by risk-averse construction lenders and government funders who are reluctant to embrace new approaches like modular housing.
  • Fourth, we need to be more strategic in our deployment of capital, so we’re not only building more housing, but doing so as cost effectively as possible. Investments provided by business and philanthropic leaders at low or no cost can allow developers to be more nimble in acquiring land and buildings and utilize new cost-saving construction technologies. While long-term public-sector funding will always be needed to ensure permanent housing affordability, upfront flexible investments by the private sector can drive change and allow public dollars to go further.

To address each, we need to fundamentally change the way we work together to provide housing. Each sector — philanthropic, private and public — needs to leverage its unique strengths to fill the specific gaps that others can’t. This may seem daunting, but there are successful models at work.

The city of San Francisco is working with nonprofit housing developers and the San Francisco Housing Accelerator Fund, a lender that leverages private and philanthropic capital to buy apartment buildings and preserve their affordability. And, in partnership with Tipping Point Community, the Accelerator Fund leverages philanthropic capital to build new permanent housing for people experiencing homelessness, bending development cost and time curves in a way the public sector can’t do alone.

In the South Bay, cities are working with Santa Clara County and Destination: Home as part of a collective impact strategy to implement Measure A, a 2016 ballot measure generating $950 million for deeply affordable housing. These partnerships have resulted in a pipeline of 21 new housing developments for homeless and vulnerable residents.

And working across city and county boundaries is imperative. Industry leaders recently created All Home, a nonprofit organization, with the specific intent of working regionally with cross-sector stakeholders to create transformative change.

We need innovation and new kinds of partnerships — across sectors and geographies — to deliver solutions that match the challenge. Solutions are within our grasp, and tackling this crisis will require all of our grit, humility, and creativity. California’s future depends on our ability to work together to create change.

Rebecca Foster is CEO of San Francisco Housing Accelerator Fund; Jennifer Loving is CEO of Destination: Home; Tomiquia Moss is CEO of All Home.