By David M. Greenwald
I have taken the position that California is likely to fall short of its housing goals – especially on the affordable housing side of the ledger.
In general, I am supportive of the state’s goals for new housing. However, affordable housing in particular is expensive and there is a lot of lot of local resistance. Without RDA or the equivalent, I wonder if we are going to be able to build the housing at the level that is needed to get out of the housing and affordability crisis.
To examine just one problem here, take for instance SB 9 – which was supposed to spur the production of duplexes, which would allow for affordability by design – as opposed to subsidized housing.
Many feared that this law would mean the end to single family neighborhoods.
But as Jason Ward, an economist with the Rand Corporation and associate director of the Rand Center on Housing and Homelessness in Los Angeles wrote in an op-ed in the LA Times last week, “the law that some were convinced would make the sky fall (has instead) barely registered.”
He notes two requirements that “reduce its scope, curbing its ability to boost housing production.”
The first is the requirement that the property be owner-occupied. In short, “the law requires property owners looking to split a lot, the most consequential part of the bill, commit to living on the property for at least three years after approval.”
Second, “one individual cannot invoke SB 9 to split two adjacent lots, even if they own both.”
As Ward explains these restrictions were added late in the process in order to assure lawmakers that SB 9 “benefits homeowners NOT institutional investors.”
But that turns out to be a huge flaw in the system.
We like to disparage developers and home builders, but as Ward notes, who is going to spur housing production? “It is builders, not homeowners (nor institutional investors, for that matter), who are in the business of producing housing.”
We are so concerned that someone might make money off this law, that we made it so that the people who have an incentive to produce large scale duplexes, have no reason to do so.
As Ward notes, “such restrictions effectively rule out any professional builder, large or small, from using SB 9 unless they want to purchase one property at a time and live on it while the lot is split and, at most, three new units of housing are created. This is an unlikely approach to making a feasible living in California.”
In short, our fear of developers and neighbors fear of the destruction of single family neighborhoods, has once again harmed our ability to produce the housing needed to get out of this crisis.
What about the builder’s remedy?
Another controversial law was the builder’s remedy, part of SB 35 passed by Senator Scott Wiener.
It has a sunset date of 2025 unless it is made permanent through the passage of SB 423.
News coverage has termed this the “controversial” state law.
Senator Wiener during a press conference trumpeted the results.
Senator Wiener explained that, according to data from UC Berkeley’s Terner Center, they found that in the first four years the bill was in effect, 18,000 units of housing have either been approved or are in the process of being approved under SB 35, and “three-quarters of those units, are below market rate.
“We are desperately in need of new homes in California. We are short millions of homes,” Senator Wiener said. He added, “SB 35 is a good government measure that will allow us to accelerate home construction. It’s very simple. If you meet all the rules, you meet the zoning and setbacks and designs and everything else, you, you get your permit without a hyper-politicized, chaotic, process that can take years, uh, and lead to litigation because anyone who has an attorney can challenge you.”
California YIMBY CEO Brian Hamlin called SB 35 “one of the most powerful pro-housing laws of modern California history.”
He said, “SB 35 has led to the development of thousands of homes affordable to low income Californians across our state, along with good paying jobs for construction workers, including some of the men and women behind me today. By streamlining the approval of affordable housing, SB 35 makes it faster, cheaper, and easier for low income housing developers to deliver the homes we need in our cities and towns while creating good jobs in our communities.”
Hamlin added, “California needs millions of new homes for people of all incomes, at all stages of life.” He said, “I am confident that when the legislature passes thius bill, and the governor signs it into law, that SB 423 will turbocharge the construction of mixed-income housing, just as SB 35 did for subsidized affordable housing.
SB 35 could be the hammer that forces local communities to pass their Housing Elements. But 18,000 units since 2018 is really not much to write home about.
Seems to me that neither law has really generated the kind of game changing housing that the state actually needs. Part of it is that the cost of housing construction is just really high, part of it is that both laws had a high barrier to entry, and part of it is that we have simply not made it more feasible to build affordable housing.