[Hpn] Los Angeles, CA - Housing Bond Measure Not the Solution - Metropolitan News-Enterprise - September 20, 2002

Editor Editor <hccjr@bellsouth.net>
Fri, 20 Sep 2002 16:30:44 -0500


OPINION: Housing Bond Measure Not the Solution

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RAYMOND HAYNES - Metropolitan News-Enterprise - September 20, 2002

California is facing a lot of problems.  Our roads are too crowded,
our houses cost too much, our education system is collapsing, and
we are running out of gasoline, electricity and water.

The cause of these problems is too much government.

To solve those problems, our left-wing controlled Legislature is
proposing MORE GOVERNMENT.

For example, Proposition 46 is a $2.1 billion bond intended to
help solve California’s housing crisis.

Before I talk about the bond however, let’s set the stage by
discussing an even bigger crisis—the budget and debt crisis in
California.

Right now, our state government is facing a $26 billion hole in a
$79 billion budget. Even with all of the governor’s tax
increases, next year’s budget will start with another $10 billion
to $20 billion deficit (because he makes no cuts to spending).

Adding to this mounting budget problem, California has made a
habit of passing bonds to pay for items that politicians didn’t
want to pay for out of the general fund.

According to the Secretary of State’s office, the state currently
has $28 billion in general obligation bond debt. There is an
additional $12 billion in general obligation bonds that have been
approved by voters, but remain unsold. There is another $11.9
billion or so in unsold revenue bonds to pay for last year’s
energy debacle.

On this year’s ballot, the governor approved a $13 billion school
construction bond (with another $12 billion to appear on the
ballot in 2004) and a $3.5 billion water bond, in addition to the
housing bond.

Our current debt ratio is about 4.8 percent of our general fund
revenue. The maximum percentage considered responsible by credit
agencies is 5 percent—a number the state will exceed if the
school bond passes.

In fact, according to the Standard & Poor’s Rating Service, the
only state with a lower credit rating than California is
Louisiana, which I understand had a problem with the banks
because they couldn’t find anything of value in the state to use
as collateral.

One result of this low credit rating is the higher interest rates
the state pays because of it. The non-partisan Legislative
Analyst’s Office estimates that in addition to the $2.1 billion
principal in this bond, the taxpayers of our state will pay $2.6
billion in interest!

That’s right, we will pay more money to the bankers on Wall
Street than we will spend on housing through this bond. The LAO
projects that it will cost us $157 million per year out of the
general fund over the next 30 years to pay this bond—no small
amount in a time of budget shortfalls.

What do we get for all of this?

Over $1 billion goes straight into the sort of subsidized,
designated, government-controlled rental housing projects that
have become tremendous liabilities in many of our state’s
cities.

Another $500 million goes into housing for farmworkers and the
homeless. That means if you are not on welfare, homeless, or a
farm worker, you get nothing.

If all you are trying to do is find a house in the same time zone
as your work place, you are out of luck.

Even the few housing grants for home-ownership allowed in this
bond have so many restrictions that they are practically useless
in most California neighborhoods today, and almost impossible in
the urbanized areas of our state.

For all the talk we hear from the proponents of Proposition 46
about our state’s housing crisis, this bond does absolutely
nothing to make the structural changes in our system that are
necessary to actually fix the crisis in California housing.

It is simply throwing money down the same wormhole that most
other government money eventually disappears into.

If we are serious about trying to solve our affordable housing
crisis, here are some ideas:

•Eliminate prevailing wage on affordable housing projects. This
costly new burden was just placed on builders and developers of
low income housing last year by the legislature and can add 25
percent or more to the cost of a development.

•Reform the construction-defect litigation mess that has made
construction of townhomes, condominiums and other affordable
attached housing uninsurable in this state, and drastically
reducing their presence in the state pool of affordable
housing.

•Reform CEQA, especially when dealing with urban infill projects.
It is ridiculous to require an entire environmental impact report
for a development that is replacing existing concrete and
asphalt. When we deal with that, we can look at habitat plans and
flood control rules that are making open space for development
increasingly scarce.

•Eliminate silly density rules in cities that force large lots
and large homes to be built at a very large cost to homeowners.
Rules in some of our cities and counties require fireplaces and
front porches on houses, minimum square footage in developments
and minimum lot sizes, all of which drive up the cost of housing
and reduce the space for future development. Some cities are
refusing to approve attached housing or apartment projects at all.

Doing all of these things would go a long way towards a real
solution.

Doing any one of these items will do more to fix our state
housing problem than this bond will.

Government has created this housing crisis.

More government won’t solve it.

Sprinkling more state money over the top is not a solution—we
must strike at the root!

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The writer represents the 36th Senate District, which includes western
Riverside County and northern San Diego County. He isalso the Senate
Republican whip. Copyright 2002, Metropolitan News Company
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