On June 9, 2020 California’s Senate Appropriations Committee reviewed a flurry of problematical housing bills and placed them “in suspense” until their next hearing on Thursday, June 18, 2020. Between now and then, there will be discussions “behind the scenes” as to which of those bills should be amended or passed onto the Senate floor. The biggest question for the Senate Appropriations Committee is “what would it cost the state if these bills are passed?”

The costs to California’s 482 cities and 58 counties would be incalculable. The costs of redoing local general plans and zoning ordinances, of correcting their infrastructure and resource deficiencies to accommodate more housing, of fighting developer-initiated litigation as a result of these laws, and of providing more public services to serve growing populations are sure to be off the charts. 

But the fiscal carnage about to be wrought upon local government by these bills is of little concern to our state legislature. It is the costs to the state that are of greatest concern to the Senate Appropriations Committee. In light of the huge budget deficits now facing California, that’s as it should be. But what might those costs be?

Bureaucratic Expansion…

Expect major growth in state government and more funding needed to sustain it. With the legislature delving into local zoning, planning, and permitting in all of California’s cities and counties, the state’s price tag for enforcing its housing laws is incalculable.

Initially, bureaucratic expansion will start by growing the State Department of Housing and Community Development (HCD). Currently staffed by over 900 employees, HCD is the agency responsible for crafting and administering California’s housing policies.  HCD has historically been charged with reviewing and ensuring the consistency of local government Housing Elements and administering a variety of state public grant programs on housing.

HCD’s largest responsibility has been overseeing the Regional Housing Needs Assessments (RHNA) process to establish statewide housing goals for local jurisdictions. RHNA calculations are guided by assumptions at a time when California had been rapidly expanding in population and economic growth. Today, California’s growth is almost at a standstill. With more people and businesses migrating out of state than are coming into it, the assumptions behind RHNA are completely invalid in today’s post COVID-19 world.

 Should these new housing bills pass, local RHNA “goals” will become state-mandated “dictates”. Expect to see HCD become the state’s enforcement arm to crack down on local governments to ensure compliance with those dictates. Gavin Newsom’s 2020 May Revise budget for HCD is nearly $3 billion, a jump of 60% over his January 2020 budget. That’s despite the damage done to California’s burgeoning budget deficit resulting from the coronavirus. 

HCD will essentially become California’s “housing police”. These bills, taken in aggregate, will cost the state dearly. Expanding HCD’s responsibilities would likely involve the following actions: 

These are just the immediate actions HCD may take. Given the propensity of bureaucracies to expand their reach, look for HCD to eventually delve into enforcing the full panoply of the state’s planning, zoning, development, and permitting laws throughout California as even more future legislation is enacted by an out-of-touch legislature.  

A Day of Reckoning…

As the state Senate Appropriations Committee considers the financial implications of this rash of housing bills on June 18, it needs to thoroughly understand the short-term and long-term financial consequences to the state before acting on this legislation.

Already, staff reports presented to the Senate Appropriations Committee vastly underestimated the financial consequences of this legislation. Staff analysis of SB 1120 (Atkins) indicated the costs to California would only be $105,000 in the first year. That’s less than the per-year cost of one full-time equivalent analyst to administer and enforce SB 1120 throughout the entire state of California!

And who is analyzing how these new laws will interact with existing state law, let alone how they would interact with each other? 

That state government would take on this massive responsibility and expense associated with the expropriation of local control by local governments– and do so with its eyes closed– is the height of irresponsibility. At the end of the day, in taking on the headaches of micromanaging local governments, the state will come to regret it.

T Keith Gurnee is a member of the Board of Directors of Livable California, a nonprofit organization of over 10,000 followers dedicated to the protection of the self-determination of local governments and the production of truly affordable housing.