Why? Why? Why? Oh, why did SB 50 get killed?
The strangling of the big housing bill in committee has occasioned an orgy of blame, aimed at specific politicians or hypocritical progressives or suburban homeowners. But the blame game isn’t helpful, or really even fair. Local governments killed this thing. And while I think they were probably wrong to do so, I find it hard to blame them.
Why? Think of the context. California local governments have very little power, because the state—and the voters via statewide ballot initiatives—have taken it away from them. Their taxing power is limited by Prop 13 and similar measures. Their best tool for doing things—redevelopment—was taken away from them.
Despite this, the state keeps adding to the demands on them. Most famously in the past decade, the state, in the name of reducing prison overcrowding, pushed many difficult to manage people to local jails, which are now a mess, as a Marshall Project report just showed. You also can see some of the results of that emptying of the prisons—and “realignment” of responsibility onto local governments—in the homelessness on our streets.
So look at things from the perspective of the cities. The state limits our power to solve problems, but keeps pushing problems onto us. And now, with SB 50, the state is going to force us to carry the load of dealing with housing problems, while taking away our discretion over approving houses in significant parts of our communities.
Why on earth would they ever support such a thing?
Even worse, under the state’s tax and budget system, housing is a big loser for municipalities. It produces costs but little in the way of revenues. Many cities—most notably, San Jose—have way too much housing under this system and are desperate for industrial, commercial and retail development that produces more tax dollars.
If the state were serious about getting cities to build new housing, it wouldn’t start with tools like SB 50, no matter how righteous the cause. It would start by remaking the tax and budget system—which would require ballot measures—to restore more taxing authority to cities and to make sure that cities have real fiscal incentives to build housing.
But that requires the kind of broad constitutional reform that the Democratic party, this governor and his predecessor have refused to tackle. So rail at the cities for the demise of SB 50 all you like. But it won’t matter until the state gets serious about reform of taxation and local government finance.