Year after year, more and more of California’s working families struggle with the rising cost of living. Major rent increases force moves that are farther and farther from places of employment, resulting in disrupted family life, health consequences and an increase in environmental pollution as vehicle commute times increase.
Economists Chang-Tai Hsieh of the University of Chicago and Enrico Moretti of UC Berkeley warn that the lack of affordable housing in cities like San Francisco and San Jose costs the U.S. economy about $1.6 trillion a year in lost wages and productivity.
These staggering losses underscore an increasingly urgent need for well-situated homes at affordable rents and sale prices in places near jobs and opportunity. Failing to act has significant negative repercussions for the economy, equity and climate change.
In the short time since I left the Obama administration as assistant secretary for housing and federal housing commissioner at the U.S. Department of Housing and Urban Development, and since launching the new Terner Center for Housing Innovation at UC Berkeley, I have repeatedly been asked to weigh in on the issue of how best to address the local, state and national housing affordability crisis.
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While there are multiple contributing factors, I keep coming back to one simple premise: Supply matters, and we need to expand housing supply in equitable and environmentally sustainable ways.
Gov. Jerry Brown’s proposal empowering build-by-right development does exactly, and importantly, that.
The state’s entitlement process has become unnecessarily complicated and cumbersome. The permitting process for new development in California coastal communities takes over 30 percent longer than in the average American city.
Not surprisingly, this greatly increases the costs of development: in the Bay Area, each additional layer of independent review is associated with a 4 percent increase in a jurisdiction’s home prices.
Other states, like Massachusetts, have tackled the problem in a similar fashion to Brown’s, showing that it doesn’t need to be this way. California’s “by right” proposal would allow new attached housing – consistent with existing general plans and zoning rules, in urban infill locations with at least a portion dedicated for families at the lower end of the income scale – to be deemed good to go. This proposal would put an end to lengthy process hearings and stall tactics often employed by special interests or “NIMBY” opponents.
This straightforward, common-sense solution should have wide, bipartisan support. Without any additional financing, it will lower the cost of housing production and begin housing families in new homes years sooner than might otherwise be the case.
But timing is critical.
The governor has proposed this as part of his May revision to the state’s budget, so negotiations must conclude by June 15. Now is the moment to make sure your elected representatives know you want them to make room for the next generation by voting to approve that the governor’s housing plan as part of the budget update. The clock is ticking.
Carol Galante is the I. Donald Terner Distinguished Professor in Affordable Housing and Urban Policy and the faculty director of the Terner Center for Housing Innovation at UC Berkeley.