In Housing Crisis, Calif. Lawmakers Look for Ways to Increase Livability

Best Best & Krieger LLP

Best Best & Krieger LLP

Livability Discussion Part 1 by Partners Ruben Duran and Michael Maurer in PublicCEO

There’s little debate: California is facing a housing crisis. The dispute lies in finding solutions.

The current state of California’s housing shortfall is well documented.

Nine out of the nation’s 15 urban areas with the highest median home values are in California. The median price of a home in San Diego County is just under $550,000 and in the San Francisco Bay Area, it’s well over $800,000. Rent affordability issues continue to affect the State: Four California cities made Apartment List’s top 10 for rent growth over the past 5 years. Homelessness, too, is on the rise: Los Angeles County’s homeless population was up 12 percent over the year.

The State also faces home shortages. The California Legislative Analyst Office estimates that some 3.5 million new homes need to be built to adequately house the State’s population. That’s also the number of new homes Gov. Gavin Newsom has promised to build by 2025.

Which, of course, raises the question of whether California is prepared to build this many new homes.

In the first 5 months of 2019, California cities and counties issued residential building permits for an average of 111,000 units, according to data recently released by the California Department of Finance. This number of permits is down 12.2 percent from the same time frame in 2018. A recent study also found that current planning mechanisms across California only allow for an additional 2.8 million new housing units to be built. That’s a 700,000-home shortage from what the LAO estimates is actually needed. It’s also not the only challenge the State faces to fulfill its housing needs.

While it’s not entirely outside the realm of possibility for 3.5 million new units to be built in California, a discussion that focuses purely on gross numbers obscures the role that the community plays in providing homes that are “livable.” That is, from a community-building perspective, the goal is to construct new homes that are affordable to different income levels, connect to job and economic opportunities, have access to safe and reliable transportation, and put residents in close proximity to their friends and family.

In this two-part series, we look at trends in California housing legislation and how communities throughout the State (and across the nation) are considering and dealing with the complex livability discussions of affordability, density, land use and transportation on a local level.

An Approach that Values Local Control
Local leaders, being responsive to their constituents, must have hyper-local conversations regarding what their community will look and feel like to find housing solutions that best fit their community’s resources, environment and needs.

Housing has endured as a hot-topic among state lawmakers who, over the last few years, have passed and proposed legislation aimed to increase affordable housing production statewide by removing local land use controls in exchange of greater state authority and streamlined approval processes. But such measures may also risk exchanging livability for efficiency, resulting in a net negative.

The discussion on increasing housing stock has often taken aim at single-family residential zones, looking for statewide rather than community measures to increase density in such areas.

Eliminating single-family zoning may make more housing development opportunities available on paper, but it might also transform existing neighborhoods without community input. While single-family zones are one area where new housing can be developed, it is certainly not the only area.

Communities can also look at increasing their housing stock by developing their mixed-use commercial zones, repurposing commercial and industrial properties or utilizing code enforcement efforts to eliminate and remediate dilapidated and vacant housing.

Reforms eliminating single-family zoning provide a quick centralized fix because they can be implemented statewide, but lawmakers can also look to preserve existing single-family neighborhoods while creatively increasing local participation to meet housing demands.

Investing in Local Communities
Too often, the discussion around housing has avoided a key policy change: The elimination of redevelopment. Though redevelopment was not a perfect system, it did provide a mechanism for cities and other local agencies, through their redevelopment agencies, to directly fund and provide for housing.

Simply identifying alternative housing opportunities is one component of meeting needs. The biggest challenge for local agencies, however, is being able to spur investment in such areas.

Fortunately, there has been some progress in developing new funding mechanisms. For example, Senate Bill 5, or the “Affordable Housing and Community Development Investment Program,” would allocate millions in property tax revenues annually to local entities to build affordable housing and transit-oriented projects, infill developments and housing-related infrastructure. [Editor’s Note: Since publication, Gov. Gavin Newsom vetoed SB 5]

The bill is aimed at reviving some of the State’s former redevelopment programs that were ended in 2011. Instead of directly creating new redevelopment agencies, it would establish a statewide fund for local affordable housing. Cities and other public agencies could then apply for program funding. The bill has received support from a broad range of stakeholders, including numerous cities and housing advocates as well as real estate and building industry groups.

Cities and other public agencies provide an important link in the housing development chain: They can leverage community needs and demands, develop creative opportunities for livable spaces and connect developers and housing providers to these opportunities. Continuing to provide cities with the tools and funding will be critical to the development of new, livable housing.

And while the approach in Oregon, long a national leader in tight land-use controls that promote urban development, has been to eliminate single-family zoning statewide, there is no cookie cutter approach to nudge development and make a community livable.

Communities can, however, learn from one another to model their own solutions.

How can local governments take a community-centric approach to improve livability and increase housing opportunities? And, in what ways can transportation and innovation lead to more housing?

Additional Resources:

This article first appeared on on Oct. 15, 2018. Republished with permission.

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DISCLAIMER: Because of the generality of this update, the information provided herein may not be applicable in all situations and should not be acted upon without specific legal advice based on particular situations.

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