Surprise, Surprise – Locals Not Approving Housing

Timothy L. Coyle
Consultant specializing in housing issues

A report recently published by the California Department of Housing and Community Development (HCD) – the erstwhile authority on all housing in the state – shows locals aren’t approving the housing they need.  But, if so many jurisdictions are out of compliance with state goals – the report says 98% –doesn’t that signal that something’s amiss with the goals?

The report is a result of the passage last year of SB 35, which takes one more crack at punishing localities in California for failing to approve proposed new housing that the state says they need.  Existing law requires localities to include 100% of their housing need in the general plans – a paperwork exercise between the state and localities and a requirement of localities which goes largely ignored.

Indeed, the state program is ass-backwards.  First, it tries to punish localities for failing to do what local voters don’t want – develop a plan for more housing.  To make matters worse, the law gives local low-income housing activists the right to sue the locals.  The cases usually settle with private builders being required to produce more affordable housing.

Second, the state – and this new SB 35 – asks too much, trying to impose its policy will through alternative means, in this case new housing.  In order to qualify for SB 35’s “streamlining” the housing projects have to be adjacent to existing urban areas (thereby promoting higher density and transit hubs), must meet existing zoning laws (thereby furthering general plan uniformity goals), must set aside either 10% or 50% of their new homes for low-income residents (thereby advancing affordable housing) and pay union-scale wages to their specialty contractors (a sop to organized labor).  All that for a state okay.

Each year, the Legislature picks the side of the housing-construction battle it wants to be on – the side of local control or housing interests.  Last year, it chose to oppose localities, blaming them for the state’s housing crunch.  That’s where, by the way, HCD has been lined up for years – arguing with mountains of data that locals don’t approve new housing, particularly affordable housing.

In a way, HCD has a right to ask for this.  It is, after all, a creature of state law, which mandates need and numbers for localities – and the other crap – to achieve.  The law also empowers HCD as the watchdog and, loosely, its enforcer.

Furthermore, and perhaps more meaningfully, locals simply are not approving the new housing, so HCD is just in scrutinizing.  Local jurisdictions frequently give in to pressure from constituents who flock to city halls and county boards to protest new developments in their neighborhoods.  These so-called NIMBYs, or “not in my backyard” advocates, are reluctant to accept new housing in their communities, particularly affordable housing, fearing it will bring increased traffic, congestion and crime.  And, these groups are armed with a powerful legal weapon:  the California Environmental Quality Act (CEQA). CEQA can stop a multi-million-dollar project – and, through the course of the lawsuit usually does.

(State environmental regulations, affordability mandates and “impact” fees imposed on developers also have been credited for slowing homebuilding in the state, as well.  As housing watchdog, HCD should be doing something about the pervasiveness of NIMBYs, environmental regulations, the proliferation of local fees and exactions and the general hostility there is toward new housing.)

But, taking an adversarial relationship with the locals won’t work.  Localities in California are sovereigns and the state will get nowhere trampling all over their rights – trying to tell them what to do.  They have to buy them off.  That’s right.  Make worth their while to approve new housing – and that takes money, state money, and lots of it.

California can start this payoff by restoring redevelopment.  But, instead of trying to socially engineer the program, just let locals keep more of the property tax revenue they earn through revitalizing neighborhoods – without conditions.  No more help to balance the state books, no more for schools, no more for quirky program requirements.  Just let the locals pay off the debts associated with the revitalization and – if they build new housing – let them keep the rest.

If this is done, the locals – who don’t want anything to do with housing – will quickly migrate to more efficient means of delivering it:

  • With the help of private builders they can begin to capitalize regional development entities whose mission it is, and only is, the construction of new housing.
  • Eliminate all inclusionary zoning schemes – and their offspring – and simply charge market-rate developers an affordable housing fee for each new unit that’s approved.
  • Combine those revenues with the money redevelopment is capable of throwing off and the agencies will quickly act to pool their resources with the privates.

The state, then, can sit back and watch the market work; the housing most assuredly will come.

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