Looking at California’s Flawed Housing Policy

THERE WAS A REAL PROBLEM. THIS IS A TERRIBLE SOLUTION
The state took a sledgehammer to local land use policy and stripped cities of the right to even question development. The legislated for-profit method: remove all perceived impediments to development:

• zoning
• public process
• transparency
• environmental protections 

In exchange for adding  a minimal number of lower cost or rent restricted units to projects, developers  have free rein to do as they like.  State law forces cities to give streamlined approvals and hefty bonuses  to such developments, regardless of any local concerns.
To avoid subsidizing needed housing, the state gives for-profit developers are huge incentives  to create expensive multi-family housing if they include a small percentage  of affordable units.  Cities must allow:

• Streamlined approvals based on objective standards only
• greatly increased density, height, lot coverage
• decreased or eliminated setbacks, step backs,  parking, and tree cover 

The results of this process do not match the types of housing cities are  mandated to produce.  The mandates (called RHNA — Regional Housing Needs Assessmenot) require roughly 40% at the lower end, 20% in the middle, and 40% at market rate. 

The system, however, creates 80%  to 90% market rate housing  with 10%  to 20% lower income units.

Is your town short of expensive housing? No?  It’s going to get a lot more, anyway.  And when the accounting is done in 2, 4, and 8 year reviews,  cities will be punished if developers have not actually built the mandated amount of housing in the correct percentages.

YES, CITIES ARE PUNISHED FOR THE DECISIONS OF DEVELOPERS. 

 YOUR COMMUNITY NO LONGER MATTERS 

Local  governments — our link to democracy — have been sidelined under extreme pressure. New laws are crushingly  punitive for cities out of compliance.  Padding of market rate housing into the for profit model clutters the amount of space small cities still have. It doesn’t leave room for meaningful low income housing. Long term city planning is no longer the way our communities will grow. Massive projects with a small percentage of affordability will be granted swift approval. 

2.5 MILLION UNITS?
WHY DOES CALIFORNIA NEED A MILLION NEW MARKET RATE HOMES? 

These numbers do not represent reality. The actual population projections through 2031 (all the way to 2060) are basically flat. But the state is not backing down. H  Governor Newsom refers to the 2.5 , reduced from 3.5 million, as “aspirational “— an acknowledgement they are not based in reality — but there are still severe consequences for towns that don’t make these numbers.

THE SHORTAGE IS AT THE LOWER INCOME  ENDS.  

This policy clogs everything up with expensive housing. 

Cities are acutely aware, and are shuffling funds for low income housing towards homeless programs, 

BUT THE STATE WILL NOT COUNT THESE EFFORTS TOWARDS RHNA.

The rise of corporate and institutional investors like Blackstone and its subsidiaries have exacerbated the lack of low income housing stock. Not just in California — this is a worldwide endeavor that consolidates  ownership to the detriment of renters. They purchase apartment buildings in “undervalued” neighborhoods,, and gentrify them. Working class residents lose their homes to large purchases of apartment buildings and whole neighborhoods, and the housing is upgraded out of their price range. 

When Governor Newsom declared a housing emergency, these larger factors were ignored.. He places  blame for slow production — especially in low to moderate categories —  squarely on cities. On NIMBYs. New laws remove perceived impediments to development: permits, public input, environmental review.  

WE ARE SET UP FOR FAILURE

Even if cities approve projects, they aren’t counted until permits are pulled  they are built.

The chart at the bottom shows the Regional Housing Allocation Numbers ( RHNA) that Marin cities are required to add. This cycle (6) runs from 2023-2031. The 5th cycle numbers are at the far right if the chart; the increases are enormous. 

2.5 MILLION UNITS  STATEWIDE  DOES NOT REFLECT THESE REALITIES: 

• FLAT GROWTH PREDICTED THROUGH 2060
• NO MAJOR INSURERS FOR NEW CONSTRUCTION
• climate change related natural disasters
• drought (with lack of water storage, even in wet years)
• fire hazards
• limited evacuation routes
• FEMA Flood zones
• Areas subject to  sea level rise
• sensitive environmental areas
• huge population outflow and Covid deaths
• Covid related changes in the way we work 
• huge tech sector job losses (over 30,000 in the Bay Area as of 3/23)
• unstable power grid
• high cost of labor, materials, and interest
• low availability of labor and materials
• supply chain issues
• impact on cities 
• PGEs inability to connect all current and planned development 

The statistics used to create the RHNA failed a state audit.  California is not, and should not, be growing at 15%. The state knows that growth is predicted to be practically flat. 

Since state redevelopment agencies closed in 2012, there has been a growing disparity in expensive to lower priced housing.  Why? The free market prefers profitable development. The success of the tech market increased demand for high end housing; small houses were snatched up and flipped at high prices, often as larger remodels. Neighborhoods started changing.

Salaries for teachers and other essential workers did not increase, and they had to compete for scarcer housing  — considered affordable if rent was 30% of their income.

Those at the lower end were left in desperate straits with the rising costs of living and were displaced by what used to be the middle class.  Gentrification continues to displace those at the lower ends. 

Even when cities try to assist low-income housing projects, money does not go far: costs are now $850,000 to $1 million per unit.

Instead of creating policy to help those in need, state policy and laws have come together under the lobbying influence of YIMBY to create a for-profit solution — a vehicle to allow dense, unfettered, high-end development. 

This started in 2017, ramped up in 2019, and then the pace of legislation really took off during Covid.   There over 100 laws now, and they all do the same thing: strip away the ability of localities to plan for growth and give all the power to the developers who have been salivating over suburban, semi-rural, and coastal land that has been kept at low, livable densities. 

State overreach in law and policy has created dangerous precedents that undermine democracy without focus on providing affordable housing. 

This has all been aided by the lobbying strength of YIMBY — Yes in My Backyard — a "nonprofit " megalith that has driven housing policy in California since its initial heavy funding by the tech industry. 

There was no city-state discussion to adjust zoning and land use policy to encourage development where it could be safely and reasonably accommodated. Policy switched from a lackadaisical state response to a severe, overarching punishment-based system of compliance.