Special Notice / Hearing: None
Vote Required: Majority
To: Honorable Board of Supervisors
From: Michael Callagy, County Executive
Subject: Staff Report Regarding Proposed Article 34 Ballot Measure
RECOMMENDATION:
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Receive a report from County staff about the work and consultation that the Board of Supervisors directed regarding the proposal to place on the ballot at the November 5, 2024 General Presidential Election an Article 34 ballot measure and provide direction regarding any future steps.
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BACKGROUND:
A. Article 34
Article XXXIV, Section 1, of the California Constitution (“Article 34”), adopted by California voters in 1950, imposes a voter approval requirement for certain affordable housing projects, unless an exception applies. Article 34 provides, in pertinent part, that no “low-rent housing project” shall be “developed, constructed, or acquired” by any “state public body” without first putting the project to a vote of the qualified electorate.
As defined in Article 34, a “low-rent housing project” means “any development composed of urban or rural dwellings, apartments or other living accommodations for persons of low income, financed in whole or in part” with public funds. “Persons of low income” means “persons or families who lack the amount of income which is necessary…to enable them, without financial assistance, to live in decent, safe and sanitary dwellings, without overcrowding.” Further, “state public body” means the “State or any city, city and county, county, district, authority, agency, or any other subdivision or public body of this State.”
B. Ballot Measures Authorizing Affordable Housing Unit Banks
Since the adoption of Article 34, numerous public agencies have sought and received voter approval authorizing a maximum number of low-income housing units to be developed, acquired, or constructed within their jurisdictions. These elections authorize an Article 34 “bank” of housing units that a state public body can draw from when developing affordable housing projects. For example, in 2022, voters in South San Francisco approved a measure allowing the city to develop, construct, or acquire low-rent housing units, up to 1 percent of the total number of existing housing units in the city, for eight years. In the past few years, several counties have held similar Article 34 elections, including Alameda (2016), Humboldt (2020), and Sacramento (2022).
The California Supreme Court has confirmed that such unit banking elections that do not describe particular projects are compliant with Article 34. (Davis v. City of Berkeley (1990) 51 Cal.3d 227.)
San Mateo County does not currently have a countywide Article 34 housing unit bank.
C. July 22, 2024 Special Meeting
At the July 22, 2024 special meeting of the Board of Supervisors, the County Executive presented a draft ballot measure regarding an Article 34 authorization which, if approved by voters, would authorize local public agencies within San Mateo County to annually develop, construct, or acquire low-income housing projects, in an amount up to 1% of the total number of housing units in San Mateo County, with any unused units carrying over into subsequent years. During the meeting, some Supervisors suggested revisions to the ballot question and the text of the measure.
The Board designated Supervisor Corzo and Supervisor Mueller as an ad hoc subcommittee to work with staff to attempt to develop revisions to the ballot question and full text of the measure for consideration at a future special meeting of the Board of Supervisors. The Board also directed staff to reach out to the 20 incorporated cities and towns to solicit their views on the proposed ballot measure, as well as to survey likely San Mateo County voters regarding the proposed measure. The Board also asked staff to consider certain revisions to the ballot language for the proposed ballot measure and deferred any action on until a subsequent meeting of the Board.
This memorandum summarizes staff’s work on this matter and staff will be available at the special Board meeting on August 7, 2024 to address any Board members’ questions and to receive any further direction.
DISCUSSION:
A. Staff Work With the Subcommittee and Subcommittee Input
As noted, the Board tasked an ad hoc subcommittee to work with staff to attempt to develop Article 34 ballot measure text for consideration by the entire Board. Staff convened a meeting with the Supervisors on the subcommittee but, after meeting with staff, the subcommittee did not agree on revisions to the ballot question and full text of the ballot measure.
Supervisor Corzo notes that the County Executive brought the proposed Article 34 authorization measure forward because of the dire affordable housing deficit in San Mateo County. She states that with a waitlist for housing vouchers totaling 11,000 families and median home values reaching over $2.4 million, the need to make housing more affordable has never been stronger and that an Article 34 authorization measure for our county would help meet the need for affordable housing in line with the Board’s stated priorities.
Supervisor Corzo also states that during the July 22nd Board of Supervisors meeting, it was unclear whether it would be possible to do polling of the County’s proposed ballot measure. However, the subcommittee was thereafter informed that a survey could be done and agreed to survey two separate versions of the measure.
Supervisor Corzo is disappointed that, despite the survey results showing positive support for the proposed ballot measure, the subcommittee was not able arrive at a shared recommendation for the Board of Supervisors.
Supervisor Corzo states that Article 34 was established in the 1950s to reinforce racial segregation, and it directly impacts local agencies’ ability to address housing unaffordability and homelessness to this day. Article 34 creates barriers to meeting the urgent need for affordable housing for teachers, firefighters, victims of domestic violence, veterans, families, and seniors. On April 24th, the Board of Directors of HEART, which is comprised of local elected and community leaders from across the County, unanimously passed a resolution calling for Article 34 to be repealed statewide.
Supervisor Corzo believes that polling shows strong support for the proposed measure, as well as some concerns, such as the measure’s impact on local land use control. She is confident that these concerns can be addressed with more time and collaboration with stakeholders. Substantively, says Corzo, the measure never proposed changes to local land use authority or raising taxes and she believes that this issue is not about eroding local control. Her perspective is that it is about collaborating to address our county’s affordable housing crisis and to make housing affordable so essential workers, families, seniors, and the entire community’s residents can afford to live in our county with dignity.
Supervisor Corzo says this ballot measure discussion is not over. It has just begun. She believes that while this is a missed opportunity to address the County’s urgent affordable housing shortage now, she is confident that with more time to partner with cities, the County and cities can collaborate to place a measure on the ballot in a future cycle to give voters the opportunity to decide. Supervisor Corzo believes that reaffirming our shared commitment to making housing more affordable and dispelling misinformation will be key to arriving at a successful ballot measure and she notes that other communities have come together around similar ballot measures, and that we can too.
Supervisor Corzo praises County Executive Callagy for championing affordable housing and bringing this ballot measure to the Board of Supervisors and thanks Supervisor Mueller, her colleagues on the Board, and the numerous local officials and residents who have provided their input for this thoughtful discussion.
Supervisor Mueller states that, as a result of his work on the subcommittee and in consideration of written and oral feedback from City Councilmembers and cities in District 3 and throughout the County, he recommends that the County not place the proposed measure on the ballot at this time. He asserts that much more work is necessary in collaboration with cities in San Mateo County to develop the details of any potential future ballot measure.
Future consideration, Supervisor Mueller believes, should include that the State of California, through the Department of Housing and Community Development (“HCD”), has implemented and mandated strict rules that local jurisdictions must follow governing the development of affordable housing in local housing elements, including the designation and rezoning of land. He states that such HCD rules are strictly enforced to create affordable housing and that cities are held accountable to create the affordable housing set forth in their housing elements.
Supervisor Mueller suggests that to help cities reach their affordable housing goals, the County might consider exploring, in collaboration with cities in the County, a potential future ballot measure that both respects local control, and also would satisfy compliance with Article 34. Such a measure could be beneficial to cities and could be crafted to apply to the specific circumstance wherein a local public agency seeks to fund the creation of affordable housing that comports with local zoning, in locations approved by the city council and designated for affordable housing in a jurisdiction’s HCD-approved housing element.
Supervisor Mueller believes collaboration with the cities and approval by the cities in development of the details of such a ballot measure would be critical to ensure its success, and that any such measure should not attempt to raise local taxes.
In the meantime, while the details of a potential future ballot measure are worked on with the cities, to combat the housing crisis, Supervisor Mueller suggests that the County should redouble its efforts and current practice of providing significant financial grants to nonprofit developers who are working with cities on affordable housing projects throughout San Mateo County.
Supervisor Mueller is grateful to Supervisor Corzo, County Executive Callagy, Assistant County Executive Rodriguez, and the County Executive and County Attorney Teams for their commitment to gaining feedback from the cities and community on this issue, and for their work to bring more resources to the creation of affordable housing.
B. Outreach to and Input from Cities and Towns
At the direction of the Board at the July 22, 2024 special Board meeting, the County Executive’s Office sent a letter to the city managers of the 20 cities and towns within San Mateo County that described the proposed ballot measures, explained how voter approval of an Article 34 ballot measure would facilitate development of much-needed affordable housing throughout the County, and solicited feedback from their respective cities and towns.
As of August 5, 2024, the County has received correspondence providing feedback from South San Francisco, Belmont, Redwood City, and Millbrae. These cities have offered observations and concerns for the County’s consideration, including the following:
Lack of Control Over Affordable Housing Developed by Non-City Agencies: Each of these cities expressed concern that the measure would allow an agency outside of a city (e.g., the County, HEART, or another city) to use the Article 34 affordable housing bank authorized by the measure to acquire or build housing within a city without the securing consent from the impacted city or its voters. This could result in a city being disproportionately impacted by the development of affordable housing that the city and its voters had not voted in favor of authorizing. Each city manager also specifically noted that the measure, as presently drafted, does not propose to distribute authorized affordable units across the County, creating risk that some cities may be disproportionately impacted by the measure and resulting affordable housing. They suggest that a system is needed to track and manage the distribution of affordable units built pursuant to the measure over time to prevent over-concentration.
Constitutional Concerns/Limitations and Potential Conflicts Between Countywide and City Voting Results: The Belmont City Manager noted the possibility that the ballot measure might pass on a countywide basis but fail to achieve a majority vote in a particular city and the question was raised whether, as a legal matter, a public agency could use the authority under the measure to acquire or build affordable housing within a city where the measure failed to achieve a majority vote.
Explanation of Scope and Interfacing of Authority Under Ballot Measure with Other Authorities: Multiple jurisdictions stated that the County should make clear in any ballot measure how the authority under the measure interfaces with other existing authority to acquire and build affordable housing. For example, the South San Francisco City Manager stated that the County should make clear that the proposed measure would not displace or supersede any locally adopted Article 34 clearance and that authority under the County measure would be in addition to any local authority. Likewise, the Belmont City Manager asked for confirmation in any ballot measure that units built by nonprofit developers that are not directly constructed or acquired by public agencies-and therefore outside the scope of Article 34-would not be counted toward the annual affordable unit cap authorized under the measure.
Allocation of Units Authorized by the Measure: Each city manager requested clarity in any ballot measure on how the affordable units authorized under the measure would be allocated among the jurisdictions in the County. One city manager asked whether the units would be allocated based on the proportion of each city’s share of the total number of housing units in the County, or if some other methodology would be used. Another asked whether the units would be allocated on a first-come, first-served basis. The South San Francisco City Manager suggested that a proportional allocation method would be preferable. A question was also raised about how disputes regarding allocation would be addressed.
The City of Millbrae asserts in its correspondence that the measure is “premature” and “hastily constructed,” and that further vetting and public outreach is needed. The City of Millbrae states that it does not support the proposed measure and requests that it not be placed on the November 2024 ballot.
Also, on July 31, 2024, the Half Moon Bay City Council voted to oppose the ballot measure. The City of Millbrae is also considering adopting its own ballot measure that mirrors the County’s but that is specific to Millbrae voters.
Any additional feedback received will be presented to the Board at the special meeting.
C. Polling Data
Also following the July 22, 2024, special Board meeting, the County Executive’s Office engaged Godbe Research, a research firm, to survey likely San Mateo County voters about the proposed ballot measure. The surveys asked respondents for their views on affordable housing production generally, the likelihood that they would vote for either version of the proposed ballot measure, and their reactions to various arguments for and against the ballot measure. The polling results will be presented to the Board at the special meeting.
In light of all of the foregoing, staff has significant concerns regarding whether there is sufficient public support at this time for passage of a ballot measure in the form that has been presented to the Board. Staff therefore seeks input and direction from the Board regarding any future steps for this matter.
FISCAL IMPACT:
If the ballot measure were to move forward, the County would be required to cover the associated costs of the election, which the Elections Division estimates will total between $820,000 and $984,000.