Billions for housing
More than $2 billion is being made available to local communities to “expedite the development of new supporting housing with simplified permitting and approval processes,” reports the office of Gov. Gavin Newsom. The Homekey+ funds were the housing component of the Proposition 1 bond passed by voters in March 2024; additional funds are available as part of the proposition’s health services features.
The Homekey+ funding will help communities acquire and rehabilitate existing buildings and other types of projects for quick conversion into permanent supportive housing. Funding is also available for new construction projects “that incorporate cost-containment strategies,” according to a release from the governor.
“The state has fulfilled its promise to help provide California communities with the tools and funding to build new housing with urgency and with an eye to our state’s veterans,” the governor said. “It is now time for locals to do their part — we must act quickly to build more housing for people struggling with mental health or substance use disorder and homelessness so they can get a roof over their heads and support at their fingertips as quickly as possible. I encourage eligible entities to move projects forward swiftly and get your shovels ready to break ground.”
Housing market firms up
If you’re looking for signs of health in the local real estate market, some help comes from Redfin, which reported that in October, home prices in San Francisco were up 8 percent compared to the previous year, selling for a median price of $1.5 million. In October, 483 homes sold in the city, up 18.1 percent from last October, and the median days a property sits on the market is 19, down five days since last year.
Gov. Newsom and Attorney General Rob Bonta are playing bad cop/bad cop as they go after cities that fail to meet their housing goals.
Different analysts will have somewhat different numbers, but the overall picture remains the same. Zillow gives the median sale price in the city as of the end of September as $1.3 million, but it also notes that 57.6 percent of sales were over the listing price as of the end of that month, and that as of the end of Oct. 31, properties were on the market 17 days before they reached the “pending” sale stage.
Nationally, existing home sales rose 3.4 percent in the month of October to a pace of 3.96 million, reports Realtor Chief Economist Danielle Hale. She says buyers enjoyed a slight increase in available properties as well as “mortgage rates that dropped in August to hit a two-year low in September.” Looking for a trend might be difficult, as “the sharp uptick in mortgage rates since September despite the Fed’s rate cuts is likely to weigh on home sales activity early in 2025.”
California cities on notice
In a bad cop/bad cop situation as Governor Newsom and Attorney General Rob Bonta have teamed up to go after cities that fail to meet their housing element goals or that flout state housing laws.
In early November, Newsom and Bonta announced that the state of California “has entered into a stipulated judgment with the City of La Habra Heights” in Orange County for an expedited timeline for it to present a compliant housing element to the state’s Department of Housing and Community Development. The community of about 5,000 people “must create 244 housing units, including at least 164 that are affordable to low or very-low-income households.” The city is more than three years late in submitting a compliant housing element.
The governor continued to talk tough about local communities getting into compliance: “No more excuses — every community has a responsibility to create housing and to help reduce homelessness.”
La Habra Heights was the fifth city to make a deal with the state on its housing elements; the others were San Bernardino, Coronado, Malibu, and Fullerton.
Bonta said, “My office will not let up: no matter the size of the city or county, we will not rest until every local government in California plans for the future and does its part to tackle our housing crisis.”
Within days of that announcement, the state sued the Los Angeles suburb of Norwalk in an effort to get it to overturn a temporary ordinance banning new homeless shelters and other housing. It came after a long struggle between the city and the state; in October, California officials said they would decertify Norwalk’s housing element, a move that makes it ineligible for millions in state housing funds and restricts its right to deny permits for certain affordable housing projects.
It’s a further sign that the state means it when it says it’s cracking down. “In addition, Norwalk has yet to meet its housing goals as required by state law,” according to a public statement from the governor’s office. “The city has only issued permits for 175 units during this housing element cycle, a mere 3.5% of its 5,034 unit Regional Housing Needs Allocation (RHNA) — the number of units required to ensure that communities have enough housing.”
It’s all relative
If you’re unhappy about a high mortgage rate you got stuck with before rates began to fall, consider what Portland, Ore., resident Elijah Ray did to get his home. Realtor.com has a story about how Ray “worked 90-hour weeks for two years” so he could buy a three-bedroom house for $333,000. Now to pay for his mortgage, he has moved into a tiny home in the backyard of the house. And it’s not just any tiny home, it’s a 225-foot former food cart, which Ray purchased for $1,000 and then spent a few hundred dollars fixing up with rudimentary plumbing and furniture.
He lives in the former food cart with his cat, Cheddar.
