Assemblyman Alex Lee’s New ‘Social Housing’ Bill Would Put State in Development Business

Housing and homelessness is the mainstay issue for California politicians, though every year the state falls further behind on its goals to move the proverbial needle on the issue.

Now one political newcomer is looking beyond the country’s borders for ideas.

California District 25 Assemblyman Alex Lee (D-San Jose) last week introduced AB 387, also known as the Social Housing Act of 2021.

The bill, meant to provide affordable housing for Californians across the income spectrum, would put the state in the development business. The ideal result, according to Lee, would be a slew of mixed-income rentals and even some for-sale homes, perhaps in mixed-use developments with retail, jobs or other amenities.

In America today, the closest thing to social housing is what is known as public housing, or the “housing of last resort,” often in old, crumbling buildings filled only with low-income residents. But in Europe, South America, Asia and elsewhere, the term “social housing” is commonly used to describe state-built homes, generally on publicly owned land, for people of all incomes.

Such developments abroad are typically well-maintained, sometimes overseen by the government, a private company or by the residents themselves. Unlike many affordable housing developments in the U.S. and California, the rents or mortgages aren’t allowed to one day become only market rate.

The aim of AB 387, Lee said, is to address the severe shortage of affordable homes for both low- and moderate-income households.

“There have been similar bills in certain regards to this issue in the past, but nothing like this on this scale,” Lee told San Jose Inside. “I do not believe there has been a social housing effort in California before. That’s what we’re aspiring to be.”

AB 387 is still in its infant stages. It doesn’t yet have a funding mechanism, but Lee expects that and other details to be hammered out by the time it arrives at the Assembly Rules Committee, likely in April. Even so, Mathew Reed, policy manager for affordable housing advocacy group [email protected], said he’s excited about the proposal.

“The South Bay has always been the leader on housing issues at the state level, and it’s great to see new energy and a new Assembly member taking on that mantle,” he said. “Right now things aren’t working. We don’t have the resources to meet the needs for affordable housing, and we’re really looking forward to being engaged in the process because we need to be looking for solutions.”

Lee said he wants housing programs in Austria and Singapore to be California’s model.

California has set ambitious housing goals of building 200,000 new units a year, yet has been unsuccessful in meeting those goals. In 2018, for instance, 117,000 units were built, but the net gain was just 78,000 homes because of losses to old age, fires and other causes, according to CalMatters.

Even so, Lee said he envisions California leading a national paradigm shift by funding and building social housing.

“Families are increasingly being priced out of the communities they’ve built and are leaving California for more affordable housing markets,” Lee said. “We have an opportunity to reshape how we view housing: not as a commodity, but as a fundamental human right. Social housing is how we provide housing as a human right.”

According to a 2015 California Housing Budget and Policy Center study, more than four in 10 households faced unaffordable housing costs, meaning they pay more than 30 percent of their income on rent or mortgage. More than one in five households statewide spend more than half of their income on housing expenses.

Things haven’t improved since. California ranked 49th among the United States when it comes to housing units per resident as of 2018.

Meanwhile, in Vienna and Singapore, 62 percent and 87 percent of its citizens, respectively, reside in public social housing.

Mortgages offered by Singapore’s Housing and Development Board come with such low monthly payments the homeownership rate is 91 percent across the city-state, despite severe land constraints, and catering to a lower-to-upper-middle-income population.

“Singapore, like California in many ways, is super diverse, super rich, very capitalistic, and they have embraced this program and see a strong need for it,” Lee said.

In Vienna, more than 60 percent of residents live in 440,000 social homes, about half owned directly by the municipal government and the rest by state-subsidized, not-for-profit cooperatives. The city spends nearly one-fifth of its annual budget on social welfare, including subsidized housing.

“A safe and affordable place to live should be a right, not a privilege–and that certainly hasn’t been the case in California,” Assemblywoman Buffy Wicks (D-Oakland) said in a statement. “We need every tool in our toolbox to meet our affordable housing goals, especially as our state begins to recover from the impacts of the Covid-19 pandemic.”

Despite the hurdles, Lee is confident social housing can work in California.

“We have the benefit of learning from the successes of other countries and learning from our mistakes,” he said. “In this country housing programs have been riddled with racist and anti-poor sentiment. That’s a legacy that’s left a reckoning on this country in a lot of ways. This bill is an avenue to being a housing producer and to fill the gaps so more people have access to a greater number of affordable homes.”

17 Comments

  1. Mr. Lee’s piece nicely complements Gil Rodan’s opinion piece of 2 December 2020 (https://staging.sanjoseinside.com/opinion/op-ed-land-trusts-social-housing-are-key-to-making-san-jose-affordable-for-all/) The shortage of housing and, for that matter, all human necessities, is mainly a function of the institution of private property. The only urban places in the world where human housing needs have been adequately addressed are where public authorities have taken ownership or control of land and/or where worker and renter movements have successfully organized popular will to force strict renter protections.

    Rodan provided a link to the case of Vienna, also referenced by Alex Lee, among the most beautiful cities in the world, that houses its residents comfortably and affordably in generally high quality housing (https://www.governing.com/topics/health-human-services/gov-affordable-luxurious-housing-in-vienna.html). To this can be added Helsinki, the Finnish capital and the European city with the lowest incidence of homelessness (https://getpocket.com/explore/item/it-s-a-miracle-helsinki-s-radical-solution-to-homelessness).

    Like San Jose, the Helsinki municipality has a monopoly on zoning but unlike San Jose, the Helsinki municipality owns 70% of the land within the city limits. It also owns 60,000 housing units in a metropolitan area of 1.3 million people (somewhat bigger than San Jose’s 1 million or so). One in seven Helsinki residents live in city-owned housing. In addition, the city owns and operates its own construction company and has a current target of 7,000 new housing units every year (including units sold to private owners). In other words, the publicly-owned construction company competes with private builders to keep housing costs low (which keeps real estate developer profits low). The city builds and provides housing more or less at cost since the city owns the land underneath the housing and continues to own it in perpetuity.

    In newly developed districts, the city requires city-owned housing to be 25% of all units; subsidized-purchase housing to be 30% of all units and private housing to be 45% of all units. Thus, the rich, the poor and the middle classes all live in the same district and with all those groups able to apply for city-owned or city-subsidized ownership units, i.e. in true universal fashion, even the wealthy can qualify for city-owned property or city-subsidized ownership units. This is consistent with Alex Lee is proposing.

    In 2019, it was estimated that in a country of 5.5 million people, there were about 5,500 officially “homeless” people in Finland, more than 70% of whom were living with family or friends on a temporary basis while they wait for publicly-provided or subsidized housing. That is, one-tenth of one percent of the population were regarded as homeless, even though more than 70% of these were actually living with roofs over their heads. By inference, this means there were about 1,700 people living on the streets in Finland, 3/100 of 1 percent of the population.

    By contrast, with upwards of 10,000 people living on the streets, about 1 full percentage point of San Jose’s population had no roof over its head in 2019, with an unknown number of people sharing living quarters with family and friends but who are effectively homeless. In relative terms, San Jose’s homeless incidence was 300 times greater than Finland’s.

    Let’s dispense with the free market fairly tales pushed by the libertarian caucus who waste time and space in San Jose Inside commentaries obfuscating the issues. Markets, free or otherwise, are not the solution to the housing crisis; private property and markets are the problem itself.

    If we want to break the power of big landowners and landlords–and the municipal, county and state governments that they own–we have to decisively and politically organize popular will to confront and challenge that power. The Austrian and Finnish working classes–and other working classes–have done and are doing just that. Let’s learn from them and put progressive taxation of wealth and public resources to work building the homes and lives we need and deserve. It will take such a movement from below to insure the success of the type of path-breaking legislation being proposed by Alex Lee.

    (Full disclosure: Econoclast was an early supporter and contributor to the successful electoral campaign of Alex Lee in 2020).

  2. Geez Louise! It scares me whenever Government gets into business. Look at the High Speed Rail system. It’s estimated that when built out, it will cost 80 billion dollars! Or what about Santa Clara County Light Rail… for each dollar of expense, riders pay less than 15 cents and the rest is paid by that sunken hole, the taxpayers. Can you imagine our Government running a public housing system with any kind of efficiency?!

  3. A boondoggle for consultants, CEQA lawyers, developers and landlords…

    Thanks Assemblyman Lee!

    I think you should put a huge ad out in all major newspapers across North and South America saying California is now going to house you for free! Rent will double in 5 years after you’re still half way to “shovel ready.”

    The state can’t even give away free money competently, what are you going to do when you actually have to do something?

  4. This was discussed in the companion piece already published in the Spotlight.

    https://sanjosespotlight.com/san-jose-lawmaker-proposes-revolutionary-social-housing-policy/

    The typically shallow and greatly ignorant, starry-eyed fans of this stuff, imagining “Vienna by the Bay” and in the other crowded areas of the state, instead of cheaper places, at least haven’t thought loudly of having the state engage in eminent domain if “necessary” [sic] to acquire housing sites.

    We also don’t see even a brief mention of example locations for this housing. Wouldn’t it be most appropriate to use existing government property, and replace transit agencies engaging in land development and speculation with the new big housing blocks, with city or county government public housing, where this could be attempted?

    Who gets to live there? Who will become favored by the government, middle-class, included, like government workers, to get homes there? (Maybe at reduced or zero rents as a perk for government workers?) Will favored clientele get exclusive portions or sites for their housing, nicer housing facilities, too?

    What happens when even more hordes flock to the Bay Area and the big Southern California cities if this is attempted? (That’s where it will be attempted, primarily.) How much in rent would the homeless or the unemployed pay, as well as those on Social Security or SSI alone? Illegal immigrants or “asylees”?

    How would this be paid for, by the way, something very important? That’s not just for building it, but for utilities, maintaining it, policing it later.

    Will there be enough parking at these places? No parking at these places?

    Our so-called “government” or “leaders” continue to decline, and pander to a declining electorate, or declining portions of it. Ugh.

  5. See the high-speed rail project, a classic liberal as well as state government concept and related boondoggle, and the flagship or crown jewel currently.

    Now down to a single track (and last year, Diesels to go only 79 mph on it)

    https://hsr.ca.gov/docs/about/business_plans/2020_Business_Plan.pdf

    Imagine them “doing” housing, with developers replacing the likes of Tutor Perini.

    (Would they then advocate such projects in other Blue cities and states?)

    Never mind the rail system we could have if done right, even public housing.

  6. How is this for a question.

    If the developers say, “it isn’t feasible for the Private Option to build affordable housing, BUT at the same time they say the Public Option should be banned?”

    What the Private Option is trying to do is prevent the Public Option from proving that affordable housing is not only possible, but the Private Option could have built more housing but chose to manipulate the market by intentionally misleading the public it couldn’t.

    Why not let it happen? I think given the “efficiency” of the modern age of high accuracy production, you will get a “decent” unit, with “parking” and the rest, and it will be MUCH less than what the Private Option critics claim. It won’t be a “micro-dwelling” or worse a “pod”

    Realize if you aren’t IN THE MARKET as a competitor, you cannot claim it is an unfair market.

  7. Government enterprises offer excellent services at lower costs and with greater equity than private ones. In addition to being accountable to the public and/or to elected leaders, publicly-financed entities provide scales of service that make them cost efficient, not least because profits are removed from the equation.

    Example 1: The City of Santa Clara’s publicly-owned electric utility–Silicon Valley Power–not only provides the lowest electric rates in California, but also low-cost fiber optic connectivity for businesses and a free city-wide outdoor wifi service for everyone. These services earn high levels of user satisfaction (https://en.wikipedia.org/wiki/Silicon_Valley_Power; https://www.siliconvalleypower.com/home; https://www.svpfiber.com/fiber-connect/fiber-connect/services-offered; http://santaclarafreewifi.com/). Silicon Valley Power’s chief executive officer is the mayor. The enterprise employs about 150 city employees, providing them with solid incomes (https://www.governmentjobs.com/careers/cityofsantaclaraca), while generating surplus revenues that are spent in part to improve Santa Clara’s other infrastructure and city services.

    Example 2: The socialized segment of the U.S. health care system consists of the a) Military Health System (TRICARE) that serves 9.5 million active duty and career retirees and their family members worldwide (https://fas.org/sgp/crs/natsec/IF10530.pdf). They also provide free care to U.S. presidents, Supreme Court judges, and congress members when they are in the DC area (https://www.snopes.com/fact-check/members-congress-health-care/); b) the Veterans Administration system that serves about 9 million non-career veterans nationwide (https://www.va.gov/health/aboutvha.asp); c) the Indian Health Service that serves about 2.6 million American Indians and Alaska Natives (https://www.ihs.gov/aboutihs/); d) numerous state, county and municipal hospitals, clinics and health centers as well as those in or on public universities, college and school campuses all over the country. The Military Health System and the Veterans Administration earn the highest levels of user satisfaction, above private health insurance plans, even a bit above Medicare (https://news.gallup.com/poll/186527/americans-government-health-plans-satisfied.aspx; https://investor.quinstreet.com/static-files/c5669293-68e5-4a0c-a7a0-33ef734307e2).

    Socialized means the physical facilities are owned by government entities and all employees are directly or indirectly employed by government entities. (No one employed in or by these facilities goes home with a dividend, just a salary.)

    Example 3: Speaking of Medicare, its administrative costs are barely 2% of total expenditures (no profits here) as compared to about 9% for private insurance plans (including profits). Furthermore, with no need to worry about profits, Medicare keeps costs down through its buying power on behalf of 61 million plus recipients (whose numbers increase by about 1.5 million each year). What it pays for services for its beneficiaries is significantly below what private insurance plans pay for theirs (https://www.kff.org/medicare/issue-brief/comparing-private-payer-and-medicare-payment-rates-for-select-inpatient-hospital-services/; https://www.ncpssm.org/our-issues/medicare/medicare-fast-facts/) while maintaining user satisfaction above that of private plans (see above).

    Example 4: Graduates of socialized UC Berkeley, UCLA, UC San Diego, San Jose State, Cal State San Luis Obispo are just as knowledgeable about their respective fields of study, just as prepared for the job market and just as prepared to tackle life as are graduates of Stanford, USC, Pamona, Claremont McKenna and Pepperdine. Studies speak of the differences between public and private universities but almost none definitively say the graduates of one are qualitatively better (or worse) than the other. By the same token, the 5 million who attend the private K-12 schools are not, on the whole, better educated than the 50 million who attend socialized schools (https://www.publicschoolreview.com/blog/new-study-confirms-that-private-schools-are-no-better-than-public-schools).

    Example 5: Cheese. The Green Bay Packers–a publicly-owned professional football team–are not any less entertaining or endearing to their fans (https://en.wikipedia.org/wiki/Green_Bay_Packers ,_Inc.) than are the San Francisco 49ers, a team owned by a billionaire who actively engaged in a hostile takeover of the Santa Clara City Council, the entity that hosts his for-profit business in their public facility (https://sanjosespotlight.com/santa-clara-council-candidates-49ers-police-union-point-fingers-over-campaign-donations/).

    Did I mention the vast public infrastructure of roads, bridges, airports and seaports or NASA, the USPS, the National Institutes of Health, or public libraries? With such a solid record, an expanded and well-run public housing system–such as proposed by Alex Lee–is easily and completely within the realm of the possible.

  8. Don’t forget the temptation will be there to reach beyond Sacramento to Washington, DC. HUD and other federal housing and other direct city aid have always been questionable at its very best, and is far below that in practice and in its reputation. But of course as with bailouts, so it will go for new undertakings.

    “Downtown West” will likely see more housing than currently planned, so they have the chance for city or county public housing to be built there, with some middle-class types snuck in, as the advocates’ first opportunity and attempt.

  9. BETTER BEFORE you wrote:

    “See the high-speed rail project, a classic liberal as well as state government concept and related boondoggle, and the flagship or crown jewel currently.

    Now down to a single track (and last year, Diesels to go only 79 mph on it)”

    Diesels can only reach at most 148 mph via a British Rail system but normally operate at 125 mph, much SMALLER than the CA plan. Electrics can safely operate at 150, but it is designed to operate at 198 mph. The reason, diesels operate on internal combustion, the higher the speed, the more vibration and pressure is created in the drive train. Electrics are lighter, less dangerous, and create much less vibration. In fact the AMTRAKK Accela in the North East of the U.S. operates like this.

    The real problem for CA is that the North East sees VERY little problems with EARTHQUAKES. However they also have had one really bad problem that CA doesn’t, lack of LAND to put track on, in fact they had to RETROFIT the EXISTING tracks. Maybe that should be what we should have done, it should have started in the 1970s, even if it took more than 20 years, the tracks would now be HSR compatible, all we would have needed was the trains.

    The retrofits would be done in a caterpillar fashion, laying the new track on one side, redirecting the trains to use one track for a segment, and then creep down the line. This way the “older trains” would be able to also operate on the newer tracks. Especially if the high speed “passenger” cars are already built and used on those tracks. Those cars would be functional on any “Puller”

    Bad comparison.

  10. It might just work IF we also adopted Singapore’s criminal justice system to deal with all the lowlifes that we’d attract, with no juries, just hardass judges doling out caning and hanging sentences to all the vandals, drug users, and unemployment cheats.

  11. John,

    Are you discussing the housing market, or just wanting to start more distractions? As I remember from the movie Billy Madison:

    “The principal clearly didn’t like Billy’s answer since he says, “Mr. Madison, what you’ve just said is one of the most insanely idiotic things I have ever heard. At no point in your rambling, incoherent response were you even close to anything that could be considered a rational thought. Everyone in this room is now dumber for having listened to it. I award you no points, and may God have mercy on your soul.” Sandler then finishes the punchline by saying, “Okay, a simple ‘wrong’ would’ve done just fine.”

    But that is just a movie quote.

  12. What we really need here is not a Singapore-style system of justice, but a Singaporean system of public hygiene to clean up after the Trumpist libertarians (e.g. Galt, Kulak, Bubble, Better Before, HOAPRES, Phu Tan Elli, WORK90, HB, Vacancy Vaquero, etc.) who regularly litter the comments section with their trash. Remember, maintaining public hygiene helps limit infestations of lies, the viral transmission of disinformation and, of course, the spread of diseases like sociopathology.

    I recommend we store the trolls in these very nice pods provided by the Singapore authorities (https://www.publichygienecouncil.sg/cleanpod). It would certainly make the comments section a brighter, tidier and more inviting place to hang out.

  13. FACENDO GUAIO,

    Believe me I do not like what these people write, and I do think the SJ Inside is not moderating the content well. But I also am forced to say that they are allowed to write what they want. But it doesn’t mean that the readers here agree with them.

    What does make me upset is they do it under false names, because they KNOW that the backlash on their “business” would likely shut them down. No one would knowingly do business with them.

    I reminds me of my education on Business Ethics.

  14. It’s hard for me to summon the least bit of sympathy for those who are so afraid to hear ideas that are contrary to their socially sanctioned dogma. The ideas expressed here by me and other libertarians have zero direct effect on the lives of these spoiled, self insulating whiners. It’s these people, naively and obediently buying into the words of Hollywood celebrities, social activists, the mainstream press, and career politicians that set the agenda for our government.
    Believe me, watching our tax dollars perpetually flushed down the toilet in a futile effort to “solve” an endless stream of left proclaimed “crises” is infinitely more aggravating than poor Facendo Guaio having his serenity disturbed because there’s still a few non believers left among the million San Joseans.

  15. Steve,
    You wrote that what bothers you most is that some of us use an alias because we know that it would hurt our businesses if we used our real names..
    You are correct. But I don’t understand why you hold that against us. Isn’t that more of an indictment of our community than of us? We have 3 options:
    1) Speak our minds using our real names and get our property vandalized and our businesses boycotted.
    2) Shut up.
    3) Express our opinions while protecting our identity.
    I’ve chosen option #3.
    I happen to believe, and I think you do too, that we should take to heart the 1st Amendment at a personal level and not just think of freedom of speech as only a legal protection but in the true spirit of respect for other people and a real eagerness to know what they believe.
    That’s why I read and contribute to this liberal website.

  16. Mr Trouble,

    History is littered with rhetoric such as you have written here, and that history is not good, like body bags as far as the eye can see not good. Call me a libertarian all you want, which I hardly qualify as one, liberterians have a well founded distrust of utopian dreams that are implemented by a government bureaucracy and populated by saints and vulcanesque technocrats. That distrust is a solid defense against body bags by government order.

    Even this Austrian perfect world of all possible worlds could exist, which it can’t, it wouldnt be long before a Stalin or Hitler would twist your utopia toward a bloodly dystopia. The best chance you have is to construct and then obey an all knowing singularity AI that has eliminated human nature. Assuming human nature will allow such a thing to be constructed. I would not put my money on Google, Huawei, or Amazon knowingly designing out human nature.

    Look around, America is not capable of such an Austrian Utopia and it shouldnt. If it did it would have to be fascist to manage the budget. Instead it is essentially open borders all the way with little safety net, to the good of latinos, asians, and europeans alike.

    But keep dreaming in your rhetorical florish, full of sound and fury signifying nothing.

  17. JOHN GALT you wrote:

    “It’s hard for me to summon the least bit of sympathy for those who are so afraid to hear ideas that are contrary to their socially sanctioned dogma. The ideas expressed here by me and other libertarians have zero direct effect on the lives of these spoiled, self insulating whiners. It’s these people, naively and obediently buying into the words of Hollywood celebrities, social activists, the mainstream press, and career politicians that set the agenda for our government.”

    Again do I need to break out Billy Madison, your not talking about the topic at all, and just name calling. You wrote:

    “You are correct. But I don’t understand why you hold that against us. Isn’t that more of an indictment of our community than of us? We have 3 options:

    1) Speak our minds using our real names and get our property vandalized and our businesses boycotted.”

    No your property WILL NOT BE vandalized, and I would never support it. But YES given your disrespect for your community and your customers it would be appropriate to have a business pay a price for its owners disdain for them. If you REALLY are sure that your argument is a correct one, than STAND UP. You wrote:

    “2) Shut up.”

    That is your choice, but again, if you can actually prove your points with evidence and logic, you are encouraged to speak up. But your constant NAME-CALLING AND ATTEMPTS TO DISCREDIT ANY OTHER VOICE WITH NO EVIDENCE MAKES IT VERY HARD FOR YOU. I understand. You wrote:

    “3) Express our opinions while protecting our identity.

    I’ve chosen option #3.

    I happen to believe, and I think you do too, that we should take to heart the 1st Amendment at a personal level and not just think of freedom of speech as only a legal protection BUT IN THE TRUE SPIRIT OF RESPECT FOR OTHER PEOPLE AND A REAL EAGERNESS TO KNOW WHAT THEY BELIEVE.”

    This statement seems very disingenuous given that every time you try to argue a point in opposition, you use primarily personal insults. The 1st amendment was not designed to allow those that like to bait people into hostility, and so far you cannot claim I do. But the content of your writing says it all. Remember you wrote:

    “The ideas expressed here by me and other libertarians have zero direct effect on the lives of these SPOILED, SELF INSULATING WHINERS. IT’S THESE PEOPLE, NAIVELY AND OBEDIENTLY BUYING INTO THE WORDS OF HOLLYWOOD CELEBRITIES, SOCIAL ACTIVISTS, THE MAINSTREAM PRESS, AND CAREER POLITICIANS THAT SET THE AGENDA FOR OUR GOVERNMENT”

    This is like saying to the police after one is arrested for Domestic Violence, that the offender was justified to take these actions because the VICTIM deserves it. I hate to say this but LIBERTARIANISM does not accept ACCOUNTABILITY of one’s actions except if those action a BENEFICIAL to the person taking them. Does this sound vaguely familiar? Like Donald Trump justifying the assault on the capitol because the election was “stolen”.

    I hope he gets arrested for the stunt he tried regarding Georgia, and gets prosecuted under Federal Voting Law Violations.

Leave a Reply

Your email address will not be published. Required fields are marked *