Guess What? California Needs More Housing

Timothy L. Coyle
Consultant specializing in housing issues

The major findings of a recently released report came as no surprise to most of us:  California needs more housing – lots of it. This, by the way, comes on the heels of enactment of a package of bills to, presumably, solve the problem.  That’s what we were told, anyway, by state legislators after they passed the legislation – recently and two years ago.

Yet, despite these laws and new funding to boost housing construction, the report by the legislatively created “California Housing Partnership” (the Partnership) says the state still needs much more, including 1.4 million rental units affordable to lower-income households.

The purpose of the study was to examine the extent to which poor households in California are cost-burdened – spending more than half their incomes on rent.  Naturally, the study found that of the state’s more than two million very low-income renter households – roughly two-thirds – are severely cost burdened, meaning they need to spend less on housing.  But, the study reached the same conclusion that’s true for all of California: we need to increase supply. Quickly.

That, says the study, can’t be easily accomplished in this day and age – with so many local obstacles.  Although the report calls for the state to give $1 billion annually to cities and counties to fund more housing and more tax breaks to help low-income families, this state spending would almost surely be squandered.  Land costs are through the roof, zoning restrictions are pervasive, fees have gotten out of control and NIMBY groups – backed by an insidious and ever-present California Environmental Quality Act (CEQA) – can be counted on, lurking around every corner, to oppose each new project.

The housing is still desperately needed, though – something that, by now, should be understood by every state lawmaker.  Besides being smart people, a sizeable portion of legislators are – according to a recent survey – landlords themselves. The survey showed 30 of them – 25 percent of both houses – own at least one unit of rental housing.  So, supply and affordability – and leaving housing markets unfettered by frivolous rules – should be well-known to most lawmakers.

Alas, this year, again, that’s not the case.  Instead of working in a concerted, cooperative way to help free up housing markets, policy committees are becoming bogged down by dozens of housing bills that aren’t helpful at all.  Some of those bills were outlined in this space recently but the really bad ones – involving rental housing – bear repeating:

  • AB 36 (Bloom) – would change state law to allow rents to be capped on properties ten years or older.  Existing law currently prohibits government-imposed controls on properties built after February, 1995.
  • AB 1110 (Friedman) – would require prior notice (90-day to 120-day) to residents for rent increases of 10 percent or more.
  • AB 1481 (Bonta) – would prohibit a landlord from evicting a resident without cause.  Currently, non-payment of rent can end a tenancy.
  • AB 1482 (Chiu) – would create a statewide limit for rent increases – right now pegged at the Consumer Price Index (CPI).
  • AB 1697 (Grayson) – another “just cause” impediment when the resident has occupied the property for 12 months or longer.
  • SB 529 (Durazo) – would declare that residents have the right to form, join, and participate in the activities of a tenant association, and withhold rent for any purpose they deem needed.

A dozen or so of introduced bills affecting zoning and land use are just as bad.  Indeed, these are just a few of the measures making up the left-leaning California legislature’s “package” of this year’s legislation designed to ease the state’s housing crisis.  Rather than displaying their intelligence or documented “on the job” experience, with these bills state lawmakers reveal that more government strictures and controls imposed on housing markets makes for good housing policy.  They don’t.

It seems like all the experts, pundits and academicians all agree that California needs vastly more housing.  If only our state legislators could acknowledge this and act accordingly.

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