Is The Gas Tax a Model For Housing Reform?

Joe Mathews
Connecting California Columnist and Editor, Zócalo Public Square, Fellow at the Center for Social Cohesion at Arizona State University and co-author of California Crackup: How Reform Broke the Golden State and How We Can Fix It (UC Press, 2010)

On a recent trip to Sacramento, I got to see the big legislative debate over housing in action.

And the debate goes beyond the particulars of housing. There is an argument over strategy—whether housing reform should be done via peace between state and local entities, or by the state imposing tough new rules on the locals.

The cases for peace and war are both grounded in pragmatism. The case for war is that local governments are so cowed by their own NIMBYs that they’ll have to be forced to make changes to spur housing production. The case for peace is that the state is doomed to fail if it tries to force through housing over huge local objections, as San Francisco Scott Wiener is seeking to do with SB 50. That’s because locals can delay or otherwise gum up the works via defiance and litigation.

I heard the case for peace made persuasively by State Sen. Jim Beall of San Jose, during a gathering at the League of Cities offices. Beall is pushing SB 5, which is full of carrots for cities to encourage affordable housing. He’s also pursuing, in a package with his colleague Mark McGuire, SB 4, which pushes housing near transit and jobs with a far lighter touch than SB 50, and SB 6, which would ramp up data on housing.

Beall is a former local official in San Jose, and pointed to a host of ways that real change in California requires state-local cooperation. He also made a strong comparison of the housing predicament to the state’s problems with fixing roads and other infrastructure before the gas tax package.

Beall recounted how Gov. Jerry Brown wanted to limit the gas tax revenues to state projects. But bringing in local projects—and making peace with potential opponents among local governments—was crucial to the bill’s narrow passage, and survival at the ballot box in the November 2018 elections.

The problem with carrot-based approaches like the gas tax bill, or SB 5, is that, even the billions they produce aren’t equal to the scale of California’s problems in infrastructure and housing. They’ll meet just a fraction of the state’s needs. But if something like SB 50 is going to win passage, it’s likely going to need to be part of a larger deal that includes carrots for the locals, like the ones in SB 5.

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