Veteran columnist George Skelton has an excellent analysis, pinning down key opponents of SB 50 – Senator Bob Hertzberg and Holly Mitchell in particular.
Like many, he acknowledges problems with SB 50, calling it “a bit heavy-handed, utopian and unrealistic, asking too much of Californians who love their ranch-house culture.
“There were credible arguments against the bill,” he acknowledged, citing “loss of local control to the state and the prospect of cramming apartment buildings into single-family neighborhoods.”
The problem that he notes and we agree is “the status quo is unsustainable.”
Here he writes: “We should be building at least 250,000 housing units a year and we’re producing fewer than 100,000. When demand exceeds supply, prices soar. Urban housing is increasingly unaffordable for middle-class families, let alone the working poor.
“With 40 million people already packed into California, we can’t keep shoving homes into the hinterlands, forcing two-hour, freeway-clogging, greenhouse gas-emitting drives to work.”
Mr. Skelton notes that the legislation which would have required cities and counties to allow for denser housing near transit and job centers was “complex and scary.” That was especially true for many local governments and particularly in Los Angeles. He noted that ten LA County Senators voted “no” or didn’t vote, while only one, Lena Gonzalez of Long Beach, voted yes.
Said Senator Hertzberg: “While there may be some merit to this notion in limited circumstances, this sweeping generalization both oversimplifies the problem and unnecessarily demeans people who have done nothing more than make homes for themselves, raise a family and play by the rules.”
Mr. Skelton took issue with the words and added that no one defended sprawl, which he called “a dirty word.” Instead, “They rallied behind local control, always a popular position.”
Mr. Hertzberg, for his part, blamed the tax system for local governments, “ignoring housing in land use decisions.” He did not criticize Prop. 13 by name, “but noted that the primary source of local revenue became the sales tax.
That’s why local governments “say yes to auto malls, say yes to big-bucks retail stores, but say no to housing,” the senator asserted. “That is the single biggest reason we are where we are.”
He has a point there. Look at Davis – we rely on auto malls and we can downplay housing as a revenue source because the collection of property taxes lags behind actual home values.
One big problem said Senator Steve Glazer of Orinda, who voted against the bill, the problem isn’t cities, it’s building.
“In my neck of the woods,” the senator also says, cities “are not bad apples. We’ve approved thousands of new housing [units], but it’s not being built.”
George Skelton quotes Dan Dunmoyer, president of the California Building Industry.
He argues that 550,000 housing units have been approved but not built across the state.
“The cost to build them is greater than the market,” he claims.
He puts the blame on government fees like sewers, schools, and parks, as well as labor costs.
He argues: “It’s not profitable to build right now.”
Writes George Skelton: “It’s complicated.”
I agree with that.
One of our readers thinks that Mr. Dunmoyer is wrong. He believes that the problem is that developers under Prop. 13 can simply hold vacant land at a low cost until the market prices rise sufficiently, where they can achieve their return on investment.
Personally, I think they are both right. Prop. 13 as cited not only by our readers, but also by Mr. Hertzberg, has played a role in creating a lag on property value for tax purposes, which has reduced the incentive to use housing for local revenue.
At the same time, we have seen the fiscal analysis of the downtown, for example, in pro formas from various consultants that show indeed that fees, along with construction costs and material costs, are a huge factor in the all-important return on investment.
But I think it comes back to the early point by Mr. Skelton – a point I made this week in my commentary: the status quo is not sustainable. And minor tweaks are not going to work.
So far I see no proposals that can fix this problem. It is easy to kill an imperfect solution, but it is hard to find an answer that will work.
As Senate Leader Toni Atkins put it in her statement, “I want them to tell me what it is they’ll support. Where are they willing to compromise?”
To which Mr. Skelton adds: “Yes, L.A. legislators. What exactly do you have in mind? Hopefully not more sprawl.”
—David M. Greenwald reporting