Why Can’t Adults Agree to Change a Corrupt System for Approving New Housing?

Timothy L. Coyle
Consultant specializing in housing issues

Last year, Brown proposed $400 million for housing projects in return for lawmakers loosening certain development restrictions. Talks stalled, and Brown’s budget revision this year includes no funding for the deal. “What’s changed is that we were unable to get the reforms that were the condition of spending the money.”

Asked if he thought those reforms might still materialize, Brown said, “I think it’s always difficult.”

— Carla Marinucci and David Siders, POLITICO’s California Playbook 

The commentary above points to the absurdity of why new housing in California isn’t systematically approved at the local level. The underlying decision of the Governor’s was announced during his presentation of the so-called “May Revise” – the routine changes recommended to the Administration’s budget, proposed in January. The May Revise typically reflects the point at which the official state budget process truly begins.

The story behind the story reveals that the Governor of California – faced with a seemingly intractable and economically debilitating statewide housing crisis – is powerless to bring stubborn, self-serving antagonists together to get a deal on housing. It says also not even lawmakers are willing to do anything about what is clearly a corrupt local project-approval process. They must like it that way.

Said the Governor, “People rail against red tape, but they have become very accustomed to it. In fact, they even become addicted to it.”

The current housing-approval regime is designed to be handled by local planning bureaucrats, politically appointed planning commissioners and by elected officials of a city council or county board of supervisors: planning staff lay out for housing providers – and the general public – construction standards and similar parameters to guide the development; the commissioners weigh the builder’s compliance with those standards and judge the worthiness of the new housing project for the community/region; finally, if all goes well, the electeds get their hands on the project and vote up or down on it.

That’s the idea, anyway. In truth, the state legislature regularly meddles in the development-standards process, dictating what new (no) growth policies planners are to oblige; planning commissioners are often forced to act on the whims of environmentalists, who want nothing built anywhere; and organized labor, with its list of demands, hold guns to the heads of local elected officials.

This is what the Governor is up against in Sacramento. Lawmakers have continually messed around with planning standards – making them match environmental goals, general land-use goals, transportation goals, resource-preservation goals, “smart growth” goals and more – that local planners don’t know where to begin. Planning commissioners, whipsawed by environmentalists and their visions of “urban-growth boundaries”, simply rubber-stamp the development-complicating decisions as instructed. And labor unions, hell-bent to get project-labor agreements and similar “wage” conditions attached to the proposed housing threaten CEQA lawsuits if locals don’t comply with their demands.

To his credit, last year the Governor convened a group of stakeholders to iron out a concept he put forward that would effectively lower the costs – and headaches – associated with new housing development. The Governor proposed to limit some local review over developments that included units for low-income families and later agreed to tie state-sponsored housing funding to its passage. But environmentalists and labor representatives – and their allies in the state legislature – balked at the governor’s proposal and it went nowhere.

So there it is: in California environmentalists and organized labor call the shots on housing policy – even in the middle of a bona fide crisis and when the average cost of a low-income housing unit is $332,000. (That average is not surprising when some localities charge over $100,000 in development fees alone.)

During his recent May Revise press availability, the Governor said that he would be willing to spend money on housing if legislators agreed to reforms that lower construction costs. So far, environmentalists and labor have said no.

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