Almost every California municipality has failed to build enough housing. As for the ones that technically did, the devil’s in the details.
State Senator Scott Wiener (D – San Francisco) has positioned himself as the most outspoken critic of California’s anemic housing production. Last year’s passage of his hotly-contested streamlining legislation, Senate Bill 35, provided “by-right” permitting of qualifying housing developments in cities that fell short of their state-mandated Regional Housing Needs Allocation (RHNA) goals. A new study from Sacramento shows that virtually all of California failed to meet those goals.
According to the Department of Housing and Community Development (HCD), 97.6% of California cities did not meet their full RHNA goals. Only 13 cities (2.4%) met their goals in full, and would be exempt from SB 35 streamlining. 70% of localities did not fulfill their goals for any income level, meaning that housing development at all price points could qualify for approval under SB 35.
Paradoxically, some of California’s wealthiest municipalities with sky-high housing prices did meet their goals: Beverly Hills, in Los Angeles County, exceeded their 8-year mandate to build 3 new homes with a whopping 84 in total, with its median home price peaking at $3.5 million. “They crushed it,” Wiener tweeted sarcastically last week.
SB 827, Wiener’s bill to mandate increased density near public transit, was recently the subject of a spat on Twitter between the Senator and former Beverly Hills mayor John Mirisch. Mirisch began his tirade by calling the bill “a bizarre combination of Soviet-style master planning with raging crony capitalism…the urban planning lovechild of Vladimir Putin and the Koch Bros.”
“Not quite sure how he got to this conclusion but definitely scores high in the melodramatic response competition,” Wiener responded. “Interesting to say that my authoring a bill to allow more housing near transit makes me Putin, since I sort of got the idea from a guy named [President Barack] Obama,” he remarked wryly.
But how is it possible for tony suburbs like Beverly Hills to meet their state-mandated housing goals with just three new units, while estimates of California’s housing deficit range between 3-5 million homes?
Senator Wiener argues that the flawed methodology in calculating RHNA goals is to blame for these baffling results. Cities self-report projected population growth based on recent trends, which predictably, results in lower housing production goals for cities that have seen more displacement of lower-income communities, or have generally resisted growth amid the rapid increase in jobs throughout the state. In general, if a city reports a population plateau, current RHNA methodology assumes little to no demand for new housing.
Wiener’s recently-introduced bill,SB 828, would reform the methodology that the California Department of Housing and Community Development (HCD) uses to calculate RHNA goals, and impose stricter penalties for failing to meet them. In a press release announcing the bill, Senator Wiener described the current process as “non-standardized, insufficiently connected to actual data, and highly politicized…[which] pushes a disproportionate amount of development into lower-income communities.”
In the Bay Area, the San Mateo county suburbs of Foster City and Hillsborough were the only municipalities on track to meet their housing goals at all income levels. Last year, however, Foster City Councilmember Herb Perez lambasted the RHNA process as an “elaborate shell game” in which the city was “lying” by promising to approve the projected number of housing units, knowing that HCD would not hold the cities accountable in the next eight-year cycle.
If passed, SB 828 would change all of that.
First, each city’s RHNA housing goals would include a “rollover” mechanism in successive eight-year cycles—in other words, all the homes not built in one cycle would be added to the state’s mandate in the next one. HCD would also have to evaluate “historic underproduction” in each region before allocating state housing goals. Currently, HCD merely reports each city’s progress in meeting its housing goals, effectively wiping the slate clean in the subsequent round of RHNA goals.
Second, HCD would include statistics on residential displacement—including evictions, foreclosures, and declining school enrollment, for example—in its calculations of local housing deficits. In other words, the lack of population growth in places like Beverly Hills would not exempt them from increased housing production goals; nor would cities like San Francisco and Oakland, with decades-long losses of low-income and minority populations, be assessed solely on the influx of new residents.
Third, the income-indexed price categories in RHNA goals would be drastically readjusted if median home prices outpace median incomes. If a city gets more expensive, but its workers’ earnings fall behind, Sacramento would require more low- and middle-income housing production as a result.
Lastly: critics such as Councilman Perez have dismissed RHNA goals as asking the “bare minimum” of cities experiencing housing shortages. To address this, the bill empowers HCD to challenge local data on projected housing needs and send them back to the drawing board, so to speak. SB 828 would also require municipal governments to plan for double the allocated amount of homes in each housing category.
“California has a huge housing deficit due to years of under-production, and we need to dig out of that hole,” Senator Wiener said in a statement.
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