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Zoning holiday in California
State-level legislation from the 1990s gets some teeth.
A remarkable story from Darrell Owens: [Some] Bay Area Cities To Lose ALL Zoning Powers in 2 Days.
What’s already happened in Santa Monica, after California’s Housing and Community Development rejected their housing plan (“housing element”):
Santa Monica pre-2023 approved 1,600 homes, 551 of them below-market rate, over 8 years. Now Santa Monica must zone for 8,874 new homes with half of them below-market rate. Having been struck by the Builders Remedy and getting their zoning suspended, within one week developers officially filed to build 4,797 new homes with 829 of them low income.
Santa Monica met 50% of their dramatically increased 2023 - 2031 housing requirements, including a 50% increase in the amount of low income housing approved over the previous 8 years — without a cent of public subsidy — in just one week. This also consists of several high-rise buildings taller than anything allowed in Santa Monica’s zoning code or city housing.
That’s a really remarkable example of local government as a bottleneck to producing more housing: it’s clear that Santa Monica doesn’t have more housing because local government hasn’t allowed it.
Since the 1970s, California has required cities to produce housing plans (“housing elements”), and there’s legislation from the 1990s saying that if a city’s plan doesn’t meet standards set by Housing and Community Development then the city’s zoning will be suspended. But until recently, HCD didn’t dare to reject any plan. It’s only recently that the California legislature has given these requirements real teeth.
HCD would just approve any housing elements no matter how bad. Cities routinely zoned for housing in illogical and comical areas where they’d never be built, and still do, such as Orinda, CA trying to zone for its low income housing requirements beside an impractical freeway off-ramp.
That all changed with laws mainly passed by state senators Nancy Skinner (D - Berkeley) and Scott Wiener (D - San Francisco) in the 2010s to update the RHNA requirements. Cities now had to zone for a variety of equitable impacts, most importantly putting housing in affluent neighborhoods, away from toxic industry and in ways that were feasible for development. So for example, SoCal cities loved to zone for apartments on top of active, popular shopping centers that would never be torn down. This was no longer permitted.
And Wiener’s law SB 828 reformed RHNA so that the numbers had to more accurately gauge for population demand, lack of vacant housing and household formation which increased housing requirements tremendously.
California’s High Housing Costs: Causes and Consequences (March 2015). A report from the non-partisan Legislative Analyst’s Office. “Between 1970 and 1980, California home prices went from 30 percent above U.S. levels to more than 80 percent higher. This trend has continued.”
Bernard Frieden, The Environmental Protection Hustle (1979). Describes how California went from being pro-growth to anti-growth in the 1970s. Also see William Fischel’s 2016 paper The Rise of the Homevoters. Fischel quotes Karl Case: “Prior to 1970, house prices moved slowly at about the rate of inflation or slightly below, and regional differences, while they existed, were relatively modest by current standards.”
The Economic Implications of Housing Supply (Glaeser and Gyourko, 2018). Compares housing markets in Atlanta (housing starts go up and down, prices stay relatively steady) and San Francisco (housing starts are low and steady, prices go way up).