SB 5 is a political success, but it shouldn’t become law.

SB 5 was the legislation that the local government lobby used to fight off the threat posed by SB 50, Scott Wiener’s housing bill. SB 5 proposed changes to produce new housing, without forcing local governments to do much of anything. The point of this was mostly political—it allowed cities and others to say that we really want to build housing, we just don’t want SB 50.

But SB 50 died—at least for this year. SB 5, however, continued, and passed the legislature. That’s understandable—it offers the promise of housing, which is badly needed. But SB 5 won’t really work—precisely because it’s a political tool, not practical legislation.

SB 5 would produce very little affordable housing—a fraction of the state’s needs—at a very high price. 

And its methods of doing that are another example of just how fundamentally dysfunctional California governance has become.

SB 5 is highly complicated. It starts with creating yet another fund on top of a state full of funds, and then creates yet another committee, of 9, to oversee it.

And then it proposes to govern the spending of that money by a new and highly complicated formula.

Its advocates say it’s simple—50 percent of the money goes to affordable housing. But then there is another rule governing 80 percent of the 50, and various allocation rules that reserve 12 percent for certain counties. And the numbers go on until you have a formula.

Worse still, it’s unclear how this new formula would interact with the state’s most complicated formula—Prop 98 on education funding. That’s why you’re seeing unions and the education lobby come out against the bill.

More conservative people also wonder about what the new entity might mean for property rights.

Still, the legislature passed the bill, and Newsom still could sign it. But that would be a mistake. SB 5 already performed the task for which it was created. Making it an actual law would create far more problems than it purports to solve.