PolitiFact California: John Chiang’s Claim On California’s Affordable Housing Doesn’t Add Up

Sep 13, 2017

PolitiFact California looks at claims made by elected officials, candidates and groups and rates them as: True, Mostly True, Half True, Mostly False, False and Pants On Fire.

State Treasurer John Chiang has made boosting California’s supply of affordable housing a key talking point during his run for governor.

Chiang, one of several Democratic candidates in the 2018 race, claimed at a recent campaign event in Santa Monica that he’s helped greatly expand that supply.

"Since I’ve been the state treasurer, we’ve increased the building, construction of affordable housing by 80 percent," Chiang said in a Facebook live video on August 13, 2017, joined by Congressman Ted Lieu.

 

 

Chiang made a similar assertion in a Facebook post one month later.

California’s struggle to build enough affordable housing is well documented: Estimates place the state's affordable housing shortage at 1.5 million residences.

We wanted to know, however, whether Chiang was right about the pace of this construction upswing and whether he left anything out.

We set out on a fact check.

Our research

Chiang took office as treasurer in January 2015.

We asked his office for information supporting his statement about the 80 percent growth in construction since that time.

It provided data showing the number of low-income housing units constructed -- or rehabilitated -- by developers receiving one of two types of federal tax credits.

That combined number jumped from nearly 14,000 units in 2014 to about 25,500 in 2016 -- an increase of about 83 percent, which tracks with Chiang’s statement.

These tax credits are awarded by the California Tax Credit Allocation Committee, headed by Chiang, and are a catalyst for building affordable housing.

Matt Schwartz, president of the nonprofit California Housing Partnership, told us these credits are the driving force for as much as 95 percent of the state’s affordable housing construction each year. One type can cover more than half the cost of developing a unit while the other can cover a quarter of the cost, Schwartz said.

Schwartz clarified that these tax credits are only used on affordable rental properties.

The treasurer’s data seems like a fair starting point for tracking affordable housing construction.

But given that some of the construction was for rehabilitation -- something Chiang did not make clear in his statement -- we wanted a deeper look at the data.

How many rehabs? 

We found rehab projects accounted for more than half of the construction in 2014 and more than 60 percent of construction in 2016.

"Most of the rehabilitations are of existing affordable housing units. That’s different than actually adding brand new units to the housing stock. That quote (from Chiang) is not spliced in a way that that’s obvious," said Carol Galante, a professor of affordable housing at UC Berkeley.

A treasurer’s office fact sheet promotes the same 80 percent increase in affordable housing units, but clarifies that those are "built or rehabilitated."

 

SOURCE: California Treasurer's Office

Not just a coat of paint

Representatives for the treasurer told us they’ve always interpreted the term "building, construction" as including both new and rehabilitated units.

Mark Stivers, who heads the state tax credit allocation committee, said rehabs involve far more than "just slapping paint" on an old apartment. The use of the federal tax credit for rehabilitation, he said, locks in that unit at an affordable rate for 55 years through a deed restriction.

Schwartz, of the nonprofit housing partnership, added that rehabilitation is a key part of preserving California’s limited affordable housing stock.

He added that Chiang has shown strong leadership in expanding affordable housing in the state.

Our ruling

California State Treasurer John Chiang recently claimed he’s helped boost "the building, construction of affordable housing by 80 percent" since he took office in 2015.

Data from the treasurer’s office show an 83 percent increase in the construction -- and rehabilitation -- of affordable housing units from 2014 through 2016.

But Chiang’s claim omits the fact that less than half were new units added to the housing supply. The majority were rehabilitation projects on existing homes. Experts told us such improvements help preserve affordable housing, but don’t necessarily expand it.

A fact sheet on the treasurer’s website gets the details right.

But Chiang's statement in a campaign video and later in a Facebook post leave out this important context. 

For this reason, we rate Chiang’s claim Half True.

HALF TRUE – The statement is partially accurate but leaves out important details or takes things out of context.

Click here for more on the six PolitiFact ratings and how we select facts to check.

For more fact-checks, go to PolitiFactCalifornia.com.