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How California can ease housing crunch

Paul Anderson, a first-time homebuyer, looks around a Sacramento house for sale in August. Prices are rising in the Sacramento area and other areas of California, worsening the affordable housing shortage.
Paul Anderson, a first-time homebuyer, looks around a Sacramento house for sale in August. Prices are rising in the Sacramento area and other areas of California, worsening the affordable housing shortage. lsterling@sacbee.com

Affordable housing is a pressing issue for many California families. Although low incomes and insufficient federal subsidies are somewhat to blame, so is the inadequate level of new housing construction.

This partly results from local opposition to new construction, especially when it increases density. State government could address the problem by enhancing and enforcing current laws, increasing participation in the planning process and shifting some planning decisions to regional or state levels.

The current planning environment is stacked in favor of better-off individuals and single-family neighborhoods at the expense of renters and multifamily housing. When interests with time and money block or downsize projects in wealthy neighborhoods, it pushes new development into dense parts of cities and increases rents throughout the area.

Confusion about the effect of new construction on rents also hinders public debate. New construction tends to be more expensive but can slow rent increases. Moreover, research confirms that not adding housing during periods of robust job growth unnecessarily increases the cost of existing housing and can displace those who cannot afford higher rents.

To complicate matters further, new housing projects in dense, low-income neighborhoods raise issues of gentrification. Lost in these debates is that affluent, low-density neighborhoods have blocked new development for decades.

To remedy this situation, state government must challenge local resistance to new housing.

First, California’s current Housing Element framework should be strengthened. It gives cities goals for new affordable housing but is now an almost symbolic exercise. Cities that fail to meet their targets should face fines or legal action, while cities that meet or exceed targets should be rewarded through infrastructure funding or other means. In addition, the state should reform the way it determines regional housing needs. The current system relies on population estimates, which underestimate the need in high-cost areas flush with jobs, amenities and public services. Vacancy rates or an affordability index would be more accurate and have a greater impact on affordability.

Second, the state must encourage a more diverse group of residents to take part in the planning process. Planners must actively seek meaningful input from families, low-income renters, young people and those unable to attend public meetings. If outreach is too cumbersome, cities should consider cutting off input that unduly benefits small groups. For example, neighborhood councils could be eliminated, as was recently done in Seattle.

Third, some planning decisions should be moved from the local to metropolitan or state levels since housing and labor markets operate beyond city limits. Where neighborhood opposition is a persistent roadblock, developers could be granted “by right” approval for projects that meet existing rules, exempting them from some reviews and public input. California’s density bonus law – which grants developers additional density in exchange for a share of affordable units – is an important example of this kind of approval. The state might expand the types of projects that are eligible.

Although controversial, these changes that limit the influence of special interests would increase housing availability and affordability. Although more should be done, they are necessary steps.

Paavo Monkkonen is associate professor of urban planning at the UCLA Luskin School of Public Affairs. He can be contacted at paavo@luskin.ucla.edu.

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