California is auditing a key housing program — but NIMBYs could use it to undo progress

California doesn’t have a clear-eyed plan to address the housing crisis. Its financing system is so messy that it squandered billions in bond money. Cities and counties operate with such little oversight that the state had to create a housing cop to enforce the law.

In November 2020, then-State Auditor Elaine Howle detailed these core findings in a blistering report that captured the ills of California’s housing ecosystem. For housing reform stalwarts, it was an almost cathartic read if it wasn’t so upsetting.

“The absence of a comprehensive and coordinated (statewide) plan allowed the Debt Limit Committee to mismanage and ultimately to lose $2.7 billion in bond resources with little scrutiny,” Howle wrote, “a loss that the committee failed to publicly disclose and struggled to explain … (and) could have helped support the construction of more affordable housing.”

California responded last year with laws to end single-family zoning and make it easier to build more densely. These were among the first bills Gov. Gavin Newsom signed after defeating the recall. As part of a $22 billion budget package for housing, Newsom launched the Housing Accountability Unit, which has real teeth to enforce housing laws and could ultimately refer resistant cities to the Attorney General.

Another major housing audit is underway that could inspire additional changes, or it could be weaponized by cynical policymakers and NIMBYs throughout California. The state watchdog agency is auditing California’s beleaguered “regional housing needs allocation” program, better known as RHNA (pronounced ree-nuh). It’s one of the most important housing acronyms in the infinite universe of government shorthands, and in California’s communities, it’s one of the most loathed, misused and outright ignored state initiatives.

The California Department of Housing and Community Development program essentially determines the fair share of housing cities and counties need to build over an eight-year period. The state is undergoing its sixth RHNA cycle right now with every jurisdiction finalizing its “housing element,” a key planning document first established in 1969.

Aaron Eckhouse, regional policy director for pro-housing group California YIMBY, said it’s ironic that this push for an audit came immediately after major housing reforms became law. It’s a backlash to try and preserve local control, and the Legislature is eagerly supporting it, he said.

More than half of the legislative committee that authorizes audits last year either abstained or voted against Senate Bill 9, the law that ended single-family zoning in California. Most of them are Democrats, too. And many of the local officials cheering for the audit camouflage their NIMBYism with tropes about the environment, developers or Sacramento’s terrifying agenda to build high-density housing.

“When the (RHNA) shortcomings were in their favor, they were happy with the process,” Eckhouse said. “Now that the state is trying to improve it and make it work better for all Californians, there’s friction from local governments because they’re being asked to do more than they were in the past — because what they were doing in the past was not enough.”

Aiming high isn’t the problem

In many cities, RHNA is a burden. In others, a goal to strive for. No matter how it’s viewed, it’s been managed under a good-faith system that’s been wildly ineffective. In the last cycle, a UCLA study of 99 Bay Area cities found that a typical city was on track to develop just 8% of the sites in its housing element. The average residential parcel in Los Angeles has a roughly 2% chance of being developed over an eight-year period, according to a UC Berkeley analysis.

Dozens of cities and counties threw a fit when they were given dramatically higher RHNA targets for the new eight-year cycle. At least 76 local governments in the Bay Area and Southern California filed appeals, providing fodder for local control proponents to push for a state review.

“These appeals highlight the confusion, frustration, and mistrust local governments have in implementing the state’s housing goals,” state Sen. Steve Glazer, D-Orinda, wrote in an October letter that helped frame the emergency audit.

The new RHNA goals are lofty, with 2.5 million housing units needed by 2029. The city of Sacramento, for example, has to plan for 45,580 new units, which is almost double the amount in the previous cycle. The entire six-county region is on the hook for 153,512 units, a 32% jump. Unlike the Bay Area and southern state, none of the Sacramento region’s governments filed an appeal.

Aiming high is not the problem, as researchers at UC Davis, UCLA and UC Irvine outlined in a new report. Cities and counties don’t get punished if they don’t meet their targets. But if targets are set too low, it could have disastrous effects on California’s overall sustainability.

There are certainly aspects of RHNA that should be addressed, like how it fails to account for migration patterns, or the disconnect between what’s likely to be built versus what could be built. But letting local control evangelists kneecap RHNA’s methodology gives cover to do-nothing local governments that hide behind concepts like encouragement, incentives and infamous carrot stick analogies that simply aren’t cutting it.

Most people would agree that California is experiencing a housing crisis, but far fewer are willing to accept the necessary steps to address it. Many are actively trying to sabotage progress altogether.

In 523 of California’s 539 local jurisdictions, at least 20% of renters spend half or more of their earnings on housing. By June 2019, those same jurisdictions had reportedly issued building permits for 11% of the affordable housing units prescribed in their housing plans, according to the 2020 housing finance audit.

Consider how that looks for Sacramento County’s most vulnerable residents. There are more than 54,000 people in a backlog for Section 8 vouchers, and about 1,250 families who have them told local officials that they can’t find housing in the area.

Households like these are an afterthought for housing resistant local governments and the legislators who echo their agenda. They decry housing reforms from the Capitol and pretend it’s about ideology. Really it’s regressive liberals asserting their privilege and influence to avoid accountability, no matter the cost to lower-income households and future generations.

When the audit findings are released this spring, don’t be surprised if a wave of anti-housing resistance comes with it.