Any doubt newly minted Gov. Gavin Newsom is serious about ending the housing affordability crisis that has put the California dream “in peril” vanished Jan.25 when Atty. Gen. Xavier Becerra’s office filed suit against Huntington Beach, alleging the city failed to plan for and provide sufficient housing to meet the needs of its population.

“California’s housing crisis is an existential threat to our state’s future and demands an urgent and comprehensive response,” said the governor in a statement announcing the legal salvo against the seaside Orange County town.

He’s right.

Housing in the Golden State is a steep ticket. More California’s are finding their wallets dangerously stressed by the cost of having a place to live than at any time in the state’s history. Just 27 percent of California households could afford the median price single-family home ($588,530) at the end of Q3 2018, according to the California Association of Realtors. Among Southern California counties, Orange County was the least affordable with a scant 20 percent of households able to afford the region’s median price home ($830,000).

California’s more than 6 million renters are equally dogged by rents that demand a higher percentage of their take-home paycheck than financial experts suggest is healthy. The California Department of Housing and Community Development’s (CDHCD) February 2018 statewide housing assessment found that more than 50 percent of the state’s renters were “rent burdened,” paying more than 30 percent of their income for housing. Another 30 percent are “severely rent burdened,” forking over more than 50 percent of their take-home pay to their landlords.

That such a large contingent of Californians can’t afford to buy a home and are struggling to make rent explains, at least in part, why the state — with just 12 percent of the nation’s population — carries the black letter of having 22 percent of the nation’s entire homeless population.

We learn in basic economics that when demand for a commodity or asset swamps available supply, prices rise…and rise and rise. That’s California’s fix when it comes to housing. The Golden State — arguably without peer with respect to its economic mojo, natural beauty, cultural diversity and seductive climate — is a place where a lot of people want to live (“Go west, young man!”). But for all its virtues, an abundant housing supply isn’t one of them.

Indeed, the CDHDC’s 2018 housing assessment projected California needs to build 1.8 million new homes between 2015 and 2025 to keep pace with anticipated population and household growth. That translates to nearly 180,000 units a year. But over the last 10 years, California homebuilders have nailed together enough wood for just 80,000 homes a year on average. And so no wonder California real estate is increasingly beyond the means of an alarming — and growing — number of its residents.
What’s behind California’s anemia in new home construction? Principally, the drawbridge mentality of arrived Californians — the NIMBYs. To watch a land use application for a new housing development — particularly in Southern California — navigate a crucible of angry NIMBYs is like watching a Game of Thrones episode.

Then there’s Sacramento’s sin of the disengaged parent when it comes to enforcing its housing laws. California cities and counties have long been threatened with punishment for failing to provide sufficient housing for their populations, but the state has rarely reached for the switch. No wonder then, that nearly 98 percent of California cities and counties routinely miss — many quite badly — their state mandated housing obligations.

There is, too, the persistent weaponization of the California Environmental Quality Act (CEQA) as a means to endlessly delay or kill new housing projects. CEQA lawsuits are the preferred foil of special interests (labor groups, business associations) to leverage economic benefits from developers under the ruse of protecting the environment.

It’s highly unlikely Gov. Newsom has any interest in wresting local land use authority away from California cities and counties. Nevertheless, he has a fundamental interest in ensuring that California’s middle economy isn’t gutted by a housing supply constrained by the forces of rampant parochialism. That Newsom is ready to haul Huntington Beach into court is proof of that.
As one of California’s most housing deficient, least affordable regions, Orange County and its 34 cities would do well to heed the warning if they covet their local land-use authority.

Here’s how.

The upcoming state-mandated Housing Element/Regional Housing Needs Assessment (RHNA) cycle is a prime opportunity to take action. Update residential and mixed-use zoning standards to bring them in alignment with the cost of acquiring and developing land. Allow for higher floor area ratios and unit densities. Sweeten density bonus incentives as part of a mechanism to integrate affordable unit allocations. Work with the development community to identify obsolete land uses (shopping malls and mid-century strip centers, for instance) and overlay them mixed-use zones to encourage redevelopment.

In short, start saying ‘Yes’ to new housing development. Otherwise, Sacramento will do it for you.

Originally published in the Orange County Register