When the first new home in the Centennial housing development goes on sale in 2021 it will have been 27 years since the project was submitted for local approval. That’s over a quarter century, well more than two decades. It’s a full generation, or six college graduations. And, for many, it’s nearly half a lifetime.
With this in mind, it’s not a wonder why housing enthusiasts scoff at Governor Newsom’s expectation of constructing 3.5 million new units by 2025. Instead, this report may help explain why housing starts are severely lagging this year.
It certainly isn’t good for a supply-starved California.
We are all too familiar with the expense and difficulty of building higher-density housing in the state’s job centers. So, to meet the need of working Californians – and to do it affordably – developers are forced to prospect previously undeveloped areas. That’s where the trouble starts.
It was 25 years ago when housing sponsors proposed to build on a portion of the sprawling Tejon Ranch, in northern Los Angeles County. It was a massive, nearly 20,000-unit development to be built over 25 to 30 years. It was designed to principally serve sizeable job-growth in three counties – Los Angeles to the south, Kern to the north and Ventura to the west. Ambitious? Yes. Needed? Sorely.
The project was self-sustaining, costing existing taxpayers nothing. It proposed to provide its own water, sewage, energy and transportation infrastructure while featuring nearly 6,000 acres of open space – almost one-half the development. And, it was far away from nosy neighbors.
Given the challenges of building in existing neighborhoods one would think that Californians would prefer to build new housing on previously undeveloped land. Wrong. The proposal was met by early and fierce opposition from omnipresent environmental groups like the Center for Biological Diversity, the Sierra Club, the Natural Resources Defense Council, the California Audubon Society and the Planning and Conversation League which tied up project approval for years.
Lawsuit after lawsuit was filed – the latest over the purported fire hazards of Centennial. These occurred despite the substantial environmental and other benefits provided by the project. Almost all of these onerous complaints utilized the California Environmental Quality Act (CEQA), a dangerous law that’s become the centerpiece of all land-use approvals in California – large and small, urban and rural. Sadly, endless litigation against the Tejon-based project showed it is perhaps even more difficult to create new communities in the state.
This can’t go on if California is to do something to relieve the existing pressures on markets and new household formation – like the inexcusable delays to projects like Centennial – that contribute so immensely to its housing shortage.
It can start by reforming the myriad and costly procedures developers must follow to get a housing proposal approved. First, state and local governments can reduce or even remove onerous design and code requirements. That means elected officials need to quit looking to new housing to solve each and every (mostly contrived) environmental concern or matter of health and safety.
Second, locally elected officials need to zone to higher densities then stick to those densities, in the name of housing supply. The state doesn’t need to intervene in the exercise of this authority either. If the state wants to compensate locals who do more, it should do so.
Third, restore a full-blown redevelopment program and skew it toward housing production. Simultaneously, prohibit local policies like rent control and affordable-housing mandates like inclusionary zoning. These programs are confiscatory, expensive and discourage development.
Fourth, eliminate the fat and excess in local development fees. Surely, locals can get by for substantially less than $100,000 per house. Yet, some localities are charging more than $150,000 in impact fees for each and every new home. Locals who charge that much are due for an audit.
Finally, repeal (and possibly replace) CEQA. Or, simply prohibit CEQA lawsuits. Let the locals do one environmental review as part of the project-approval process, then that’s it. No lawsuits. Environmental extremism and no-growth politics, reflected by this frivolous litigation, don’t belong in our neighborhoods or in our courtrooms.
In the absence of reforms like these, California will continue to fall short of meeting its housing production goals.