What should California’s housing and transportation priorities be in 2020? Here are a few ideas
Note to readers: Each week through November 2019, a selection of our 101 California Influencers answers a question that is critical to California’s future. Topics include education, healthcare, environment, housing and economic growth.
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California Influencers this week answered the following question: What should the most important priority in the area of housing and transportation policy be for Governor Newsom and the State Legislature in 2020? Below are the Influencers’ answers in their entirety.
“Get local leaders on board”
Anthony Rendon – Speaker of the California State Assembly
The most important priority for state leaders is, paradoxically, local. We have already set the table for housing in a lot of ways - with flexibility like accessory dwelling units, and funding like the recordation fee that locals control. Now we have to keep pushing our localities to do the planning to meet production goals in the new Regional Housing Needs Assessment. We have allotted billions of dollars to make housing development easier. Cities with the jobs need to do more to balance that with housing for workers.
That brings me to transportation. We need to reduce dependence on polluting single-passenger vehicles, including for commutes. Putting housing near jobs is part of that. Another part is improved rail. Again, the table is set. Assemblymembers have developed a plan to use existing high-speed rail funding to improve rail options in places dense with potential passengers; places we will ultimately link to high-speed rail. Their plan still brings jobs and higher-speed rail to the Central Valley where HSR is underway and promises a one-seat ride from Bakersfield to the Bay Area. The priority then, is for state leaders to get local leaders on board with a plan like the Assembly concept.
Make better land-use decisions
Tia Boatman Patterson - Senior Housing Adviser in the Newsom Administration
Lawmakers and advocates may disagree about the exact numbers, but what is clear is that California is woefully short on housing supply at the low- and moderate-income levels. To address this shortage, we must build, but to build effectively, we must make better land-use decisions and build in areas that provide access to jobs and transportation.
Between the Legislature, voters and Administration, the state has approved an unprecedented level of funding, from Senate Bill 2 to $6 billion in housing bonds and the $2.75 billion for housing and homelessness in Governor Newsom’s 2019-20 budget. This has been augmented by billions more from tech companies. However, using these resources to efficiently produce the maximum amount of housing will require breaking down all barriers to production at the state and local levels. SB 2 and the Governor’s budget have provided funding for jurisdictions to plan for housing. In 2020 and beyond, we must work together to implement policies and ensure better land-use decisions so that we develop the right types of housing in the right places to meet communities’ needs. This will help clear the way for actual production throughout California while reducing greenhouse gas, addressing both housing and climate change initiatives.
We’re Ready to Answer the Call
Lisa Hershey - Executive Director of Housing California
Together with the Governor and Legislature, we made significant strides towards creating housing opportunities for those struggling the most. This year alone, our state outlawed discrimination against renters using housing assistance, capped rent increases, and invested more than $2 billion to address housing affordability and homelessness. However, to get us out of a crisis decades in the making, California needs a comprehensive, long-term approach. Early on, the Governor called for a “Marshall Plan” -- bold investments and systemic changes for years to come. But our leaders have struggled to answer the call.
Housing California and our allies are ready to step up and partner with the Governor and Legislature to advance a long-term strategic vision and a blueprint to get us there. To meet the scale of the need and create a California with HOMES for ALL, we need to shift from the current piece-meal policymaking to structural change. Even as we develop a comprehensive road map, we must pass meaningful legislation, including a Flexible Housing Subsidy Pool -- to provide permanent affordable housing and supportive services, and get people into housing quickly.
The time is now. 2020 must be the year for California to renew its commitment to being a home where all can afford to live -- and thrive.
“Act boldly and audaciously to increase supply”
Rob Lapsley - President of California Business Roundtable
After the Economic Summit in Fresno, it is time to act boldly and audaciously to increase supply. Current thinking has all but abandoned the critical importance of homeownership for creating generational wealth and the ability of families to break the low-income cycle. There are clear policies standing in the way of new supply. We can maintain all of CEQA’s environmental protections while also giving builders certainty on litigation timelines if the state simply mandates a deadline for CEQA lawsuits.
We must also look at the relationship between housing and transportation policy, which is increasingly becoming a barrier to construction. Mass-transit mostly benefits higher-income workers who commute to higher wage jobs in urban cores, while lower-income residents are pushed farther out in search of housing they can afford. Mandates to reduce vehicle miles traveled will increase costs for both housing and transportation and be paid nearly exclusively by these low-income super commuters. Lastly, we must also figure out who’s going to build all the new houses. We are still at a construction worker deficit from the height of our last housing boom. We must talk about apprenticeships as well—we cannot build anything without a qualified workforce.
Eliminate barriers in the way of progress
Amanda Eaken - Director of Transportation and Climate at the Natural Resources Defense Council
A little less than a year ago, NRDC joined 50 partner organizations in publishing Lead the Way, a comprehensive transportation platform for Governor Newsom to consider. We are pleased to see that some of the recommendations in this platform have been acted upon, including adding social equity expertise to the California Transportation Commission, and Governor Newsom’s recent Executive Order to align transportation spending with California’s climate goals. As we look to 2020, an important milestone in California’s climate trajectory, and the year that kicks off what Los Angeles Mayor Eric Garcetti has called for as the decade of action on climate, there are two key areas of climate action that deserve more attention. The State needs to show progress in building more housing for more Californians. Enabling the creation of more homes near transit, through reviving and refining SB 50, should be the first priority.
Secondly, the Legislature needs to focus on eliminating existing barriers getting in the way of city leadership on sustainable transportation. Shockingly some of the most sensible actions cities want to take, such as setting safer speed limits and using smart technology to enforce those speed limits, are prevented by state rules. And congestion pricing – a tool that has proven to significantly and rapidly cut carbon pollution as well as dramatically improve health outcomes – is currently banned by state law.
By following these and other transportation, housing and equity recommendations in the Lead the Way platform, Governor Newsom and the Legislature can ensure they are moving California forward to the sustainable and equitable future we deserve. NRDC and many partners are here to help.
Make it easier for companies to build
Perry Pound - Founder & CEO of Cambridge Pacific Ventures
The Governor and the Legislature must pass laws to make it easier to build new housing quickly in order to solve the housing crisis. CEQA should be exempted for all affordable housing projects and the Legislature should support SB 50 in order to expedite high density development near transit stations. The Legislature should also consider a new state law that streamlines entitlements for projects that build at least a 25% affordable housing component. I have had many politicians tell me that it is too difficult to do all of this but companies are voting with their feet and leaving the state in large numbers. Further erosion of the job base due to increasing housing costs caused by a dysfunctional entitlement process will ultimately collapse the economy and ruin the Golden State.
Protect vulnerable tenants and homeowners
Richard Bloom - California State Assemblyman (D-Santa Monica)
Over the last 3 years the legislature has passed many housing measures that reformed existing law and that collectively will have a profound impact. These include AB 1771 – RHNA Reform, AB 1505 – Inclusionary Housing, AB 2299 – ADU reform, SB 1 – Affordable housing fund, AB 2505 – Density Bonus Reform, and AB 72 – Housing Element Enforcement. In addition toconsidering new legislation in 2020, the Legislature should concentrate on improving these laws as necessary.
In addition, the legislature should continue to prioritize protection of vulnerable tenants and homeowners. While AB 1482 will have a profound impact on the rental market, people will still face affordability issues until we have a reliable supply of affordable and market rate housing. The legislature should also focus on new construction technologies and products to build housing more efficiently and faster. The state should consider incentivizing a California based modular housing infrastructure. California factories utilizing California resources and California labor have the potential of lowering costs and bringing units online faster while enhancing sustainability goals and growing jobs.
On the transportation front, the Legislature must look at ways to address falling transit ridership while continuing to enhance funding for innovation and active transportation. Building housing strategically near jobs is the best way to cut down on vehicle miles travelled and, therefore, deserves priority consideration in both legislation and the budget.
“Start by reducing state fees and excessive regulations”
Shannon Grove - California State Senator (R-Bakersfield)
California’s housing shortage is at a critical crossroad and is one of the most important issues the California State Legislature needs to tackle in 2020. However, unraveling the manufactured crisis that Sacramento Democrats created has to be a multi-prong approach and cannot be a one size-fits-all. The Legislature should start by reducing state fees and excessive regulations that make it more expensive to build and giving homebuilders the same assurance against lawsuits by NIMBYs that are given when building stadiums and sports arenas. In 2019, the Legislature missed out on opportunities to chip away at the housing crisis. Instead, Sacramento Democrats advocated for policies such as rent control which is a bad solution to a deepening problem. Our neighbor to the north, Oregon, enacted rent control which has worsened that state’s housing shortage.
Sacramento Democrats pushed to raise the gas tax in 2017 promising to invest vital transportation dollars for high priority transportation projects like maintenance and repair of the aging highway system. California voters even approved Proposition 69 (2018) which Democrats claimed would create a lockbox for SB 1 funds, ensuring they would be used primarily for roads, street repairs, and improvements. Despite what Democrats told the voters, 25% to 40% of the new taxes are being allocated for other pet transportation programs. Promises made should be promises kept.
Engage the public in housing and transportation policy discussions
Jim Boren - Executive Director at the Institute for Media and Public Trust at Fresno State
California must have a balanced housing/transportation policy that meets the critical needs of the state using 21 st century thinking and innovation. Because transportation and housing challenges can’t be solved independently, we must always think about them as inter-related issues. We also must recognize that different regions of this complex state need different solutions to housing and transportation. Resources must be distributed on the basis of what will get results in a particular region, and not on outdated formulas. But let’s not just leave this to the housing and transportation experts. We must engage the public every step of the way.
“Rely more on free market principles”
Jon Coupal - President of Howard Jarvis Taxpayers Association
Regrettably, California’s pursuit of progressive policies has backfired in the areas of housing and transportation. For example, High Speed Rail was doomed from the beginning according to a consensus of international transportation experts. For that reason, terminating that project and using those funds for road improvements should be the highest priority. In the area of housing, the adoption of statewide rent control has had the predictable effect – rents have gone way up in anticipation of the new 5% cap. Moreover, going forward, landlords will have a further incentive to raise their rents up to the legal limit every year as a hedge against unforeseen increases in operating expenses, including higher taxes. The real losers from rent control will be tenants.
Command and control economies do not work. Our elected leadership should rely more on free market principles to achieve better outcomes for their policy objectives.
Protect workers and prioritize jobs to fight inequality
Cesar Diaz - Legislative and Political Director at State Building and Construction Trades Council of California
Prioritize quality jobs, transportation and affordable housing to fight income inequality. There is no greater crisis in this state than income inequality. The housing and transportation problems we face are daunting and they both reflect this inequality and perpetuate it. We cannot fix these deep structural problems in a vacuum; we must address ever-deepening poverty for working class Californians. Clearly, solutions for transportation and housing require the expansion of a skilled workforce. We can invest in low-income communities to create apprenticeship opportunities and good union jobs that build affordable housing, expand mass transit, and lift families out of poverty.
High speed rail depends upon a well-trained workforce and related economic activity will also serve to uplift poor and forgotten communities. Investing state dollars in affordable housing with high quality standards like prevailing wage and apprenticeships will give low-wage workers access to homes and career opportunities, maximizing the benefits of public investment. The state can and should promote housing and transportation projects to reduce congestion, meet climate goals, and improve the quality of life for all.
We must treat the workers building our homes and transportation systems as essential to reducing income inequality by ensuring their job sites are free from wage theft, unsafe conditions and misclassification so they too may benefit from the projects they create for California families.
Reduce unnecessary fees for developers
Jennifer Svec - Legislative Advocate at California Association of Realtors
The housing affordability crisis continues to suffer and will not be resolved if the trend to “kick the can down the road” persists. California’s residents desperately need radical change. Bills like SB 50 by Sen. Scott Wiener are necessary if we are going to have any chance at creating housing where it is needed most - near transit and jobs. It is also no secret that impact and pre-development fees significantly affect the overall cost of a project. These costs are often passed along to buyers in the form of higher home prices, especially in high demand markets. High impact and pre-development fees can also increase the amount of subsidy needed to build affordable housing units. It is time the state considers more concrete reductions in pre-development costs associated with the construction of affordable housing units in order to spur more development. C.A.R. will be sponsoring legislation in 2020 to increase density bonus applications by providing applicants with a new incentive to maximize the percentage of affordable units within those developments by reducing impact and pre-development fees proportional to a unit’s affordability restriction.
To Take Housing Solutions to the Next Level of the Fight, Carrots Work Better than Sticks
Catherine Lew - Co-Founder and Principal Consultant of The Lew Edwards Group
Real money and political will are finally being applied to addressing California’s housing crisis. This year’s State budget included historic investments for more affordable housing, and expanded funding to support homeless families and renters. Apple and other high tech titans recently pledged $5.5 Billion to address the housing crisis. Governor Newsom’s flagship program to develop affordable housing on surplus state-owned land, is being launched. Unfortunately, California’s housing deficit is still virtually equal to that of all other 49 states, combined! Effectively building on the momentum created this year requires state leadership to work effectively with California’s cities as the Legislature prepares to reconsider Senate Bill 50 in the next legislative session. SB 50 died without a vote this year when cities wanting to maintain local control pushed back hard on Sacramento mandates to build higher density housing near transit/jobs. Encouraging and incentivizing cities to develop their own localized plans within a specified timeframe--and broadening the discussion on other issues important to cities, such as restoring redevelopment funding --will create the partnerships necessary to take this fight to the next level. There is so much at stake—let’s work together with a renewed purpose and will to get there.
Fees and Delays Need to be Addressed to Solve our Housing Crisis
Dan Dunmoyer - President and CEO of the California Building Industry Association
Developer fees – what local governments charge homebuilders to build – contribute greatly to California’s housing affordability crisis. These fees are unpredictable and not uniform across the state, which delivers uncertainty to builders and land developers. Ultimately, these fees impede growth, increase housing costs and put many residential development projects in danger. Developer fees are also very high. A recent Terner Center study concluded that the total fees charged to the builder can be from 6 percent to 18 percent of the median price of a new home depending on location. And for every $1,000 in added construction costs for a median priced home, 10,000 households are priced out of the market.
Governor Newsom and the Legislature need to examine the broad authority that has been given to local communities and make changes that secure a lower and more equitable development fee structure. Local governments also hinder growth by enacting complex and costly barriers to the home building approval process. We saw some positive action last session with the passage of SB 330 (Skinner), but to further encourage housing production, additional state policy incentives should be enacted to address NIMBY local planning and zoning requirements.
Partner up with local governments, organizations, and residents
Carolyn Coleman - Executive Director of the League of California Cities
As the housing affordability crisis in our state continues unabated, in 2020 the most important priority in the area of housing for Governor Newsom and the State Legislature will be to spur housing production by strengthening the collaboration with all of those critical to getting roofs over the heads of Californians. Cities, counties, the state, private sector, non-profit organizations, labor, and every day Californians in neighborhoods around the state – all are essential partners with roles to play in fixing our broken housing system to ensure all of our residents can call California home.
Over the last three years, the state has enacted dozens of new laws with the goal of improving various aspects of the housing system. Some of these laws have included significant one-time resources to address the housing crisis. As the focus on solutions by all of the partners continues in the new year, we need the state to commit to more than a series of one-time investments. What we desperately need now is a long-term funding commitment that matches the scale of this crisis that has been decades in the making.