Analysis: Changes Council Seeks to Proposed Regional Housing Bond Could Double Number of Units Produced

With changes the Bay Area Council is seeking to make to a regional affordable housing bond measure being eyed for the November 2024 ballot, Bay Area voters could get double the number of housing units than what is currently being proposed. The Bay Area Housing Finance Authority (BAHFA) is preparing the largest bond in US history at $20 billion that would produce an estimated 37,500 new affordable homes in the Bay Area. The bond would be paid for with a tax/fee on new and existing Bay Area houses, which could, to the good, produce affordable homes, but to the bad, could further suppress the production of new market-rate houses. In general, the vast majority of all new housing is market rate, so negatively impacting the production of market-rate units can really hurt the overall market. 

The compromise the Bay Area Council is proposing is to mandate in all jurisdictions that these new bond funds can both be used in both 100% affordable projects and in mixed-use projects.  Allowing developers, who are subject to requirements to include affordable units in their projects in many places in the Bay Area, to use these bond funds for those affordable units would suddenly make many projects “pencil” or become feasible. An analysis  by the Bay Area Council Economic Institute shows that this change would unlock an additional 38,000 units, or DOUBLE the units the current proposal would produce.  With the change, the bond could help create up to 75,500 new market-rate and affordable housing units. And, this change still produces the same number of affordable units.
 
The Council is vigorously engaging with BAHFA, the Metropolitan Transportation Commission, and the Association of Bay Area Governments as they work over the coming few months to finalize the details of any bond measure. To engage in the Council’s housing policy work, please contact Vice President Louis Mirante.