California needs to recommit to an All of the Above housing strategy
February 8, 2020 by Micah Weinberg
(Photo: Eric Beteille/Flickr)
There is general agreement that California remains in a housing affordability crisis that is hitting the state’s working families extremely hard, forcing long polluting commutes and causing spiraling rates of homelessness. But opinions differ markedly on the appropriate response to the increasingly dire situation. The only proposal that was remotely scaled to the size of the challenge SB 50 (Wiener) suffered another legislative setback. Though objections to the bill were various, its opponents offered few alternatives that provided credible paths to producing the additional homes needed to provide relief to suffering Californians, reduce pollution, and bring our unhoused brothers and sisters back inside.
As we think about the next step in addressing California’s housing crisis, we need to recommit ourselves to the “All of the Above” strategy rather than fiddling with housing politics, while the money in Californians’ pockets burns. This would bring a range of strategies to bear — from redressing historically discriminatory downzoning to providing tools for localities to finance needed infrastructure to ensuring that we are using all appropriate land for development.
To meet this challenge, the 2020 California Economic Summit Roadmap to Shared Prosperity includes a set of policy choices that can contribute to housing supply with a focus on assuring adequate land supply for housing for all income levels at affordable prices and located in places close to employment. This is particularly critical to the need for middle-income earners who rely on a market of “starter homes’ to move up the economic ladder. Without that existing market near employment centers, upward mobility is stymied.
Leading up to the 2019 California Economic Summit, California Forward commissioned an analysis of how to meet the state’s housing supply challenge through land that is currently available for housing. The report confirmed that there is limited housing land supply within the state’s urban areas and that existing regulatory, entitlement, and financial barriers inhibit growing that supply and thereby prevent sufficient numbers of homes from being built. It also underscored that there is simply not enough land around traditionally defined transit-oriented development (TOD) sites to accommodate the state’s housing needs and that converting underused, vacant parcels within the urban-suburban footprint can substantially increase land supply and thus ought to be added to the policy debate when considering how to increase housing supply.
To move the debate forward all parties in the discussion should focus on three aspects of the housing supply problem:
1. Expand the land available for housing beyond transit: First, change the focus of the legislative debate from development around transit to increasing the overall supply of housing. The debate should not be characterized as a simple choice between on housing close to transit or sprawl. It should be about better utilization of existing land within the current urban foot print including land in close proximity to transit.
An additional policy choice centers on expanding the “infill” policy discussion to include under-utilized and skipped-over urban land, whether or not such land has close proximity to transit. There may also be circumstances where an existing regional urban footprint could be expanded as a means to have sufficient supply of land to accommodate enough housing for each region’s employment and population growth so that families can live and work in the same community.
To increase land available for housing, a top priority should be designating housing as the best use of existing vacant land in urban areas where land use decisions have been made through General Plan decisions. This will mean limiting community discretion: Residential developments that are surrounded by built-up urban development or are within municipal boundaries and meet state and community housing standards (such as density or affordability levels) could receive their approval “by right,” without additional discretionary review processes.
2. Reducing the High Cost of Housing Development: The cost of build housing in our urban and suburban centers has complicated the ability of middle-income families to be homeowners. In most regions, many Californians are struggling to earn enough to pay the high cost of housing, which is increased by local fees and process timelines placed on construction.
While the legislative debate is all about the process of establishing fees, limitations on residential development fees and exactions need to be part of the housing supply discussion. One approach is to cap fees at a percentage of the total project cost and prioritize development types. To further reduce costs, legislation will be needed to limit the timeline for approving housing developments and reduce the litigation opportunities through the California Environmental Quality Act. Innovation in building technology such as manufactured housing should be incentivized to provide another method to reduce costs.
3. New governance and funding model for housing related infrastructure: A new intergovernmental model, which includes cities, counties, schools and the state and captures a portion of the growth in local and regional economies to fund the infrastructure needed for housing, is essential to include in the mix of solutions. The objective of this proposal is to facilitate state and local investment partnership in housing and community infrastructure that will spur economic development and provide a growing property tax base, including property taxes that go to support school facilities along with the other public agencies.
One aspect of the debate has become crystal clear: no one set of polices nor a single piece of legislation will meet the housing needs of each region. The policy debate must focus on how state requirements and local actions can assist in meeting the housing supply needs for each region.
Micah Weinberg is CEO of CA Fwd.