There is an undeniable, longtime imbalance in California between jobs and housing. In Orange County alone, 50,000 new housing units are needed to meet jobs demand, with housing shortages expected to continue for the foreseeable future. And so-called “affordable” housing for the most vulnerable populations – the poor, mentally challenged, aging, chronically ill – becomes ever-harder to achieve when housing production is constrained by growing government regulations at every level.
Solving these long-term issues requires thoughtful planning, not “one-off” solutions mandating the construction of certain types of housing – a practice called “inclusionary zoning”– as proposed by Assembly Bill1229 (by Assemblywoman Toni Atkins, D-San Diego) now before the governor for his signature. While well-intended, this bill will actually exacerbate the problem of an adequate supply of affordable housing.
AB1229 paves the way for mandates that require new home neighborhoods designate a certain percentage of dwellings specifically for low-to-moderate income folks, forcing homebuilders to pass along the costs of underwriting that “affordable housing” onto the prices of other homes – essentially subsidizing one set of buyers on the backs of other homebuyers.
This further reduces the ability of homebuilders to increase production of housing for all. For this reason inclusionary zoning has long been viewed by California’s Department of Housing and Community Development as a constraint to overall housing supply. Under the law, communities that enact inclusionary zoning as part of their housing strategy are obligated to develop even more housing to make up for the loss in homes caused by those subsidized.
In fact, there is strong evidence to suggest that communities with inclusionary zoning actually build less than communities without it – not a hit this state or county can afford to take. Anaheim, for example, effectively developed, without inclusionary zoning, public-private partnerships to cultivate innovative strategies for new infill development projects, housing overlay zones, building adequate infrastructure that addresses local needs, streamlining the regulatory process to approve new housing projects and building strong housing trusts resulting in approvals for thousands of future homes in all price points.
When Santa Clara County enacted an inclusionary housing mandate, fees skyrocketed to more than $100,000 per new home – artificially driving up housing costs in a market already too expensive. Increased prices means developers will build fewer housing units overall as building will become no longer profitable and home ownership becomes out of reach for a larger percentage of Californians. So really, inclusionary zoning often translates into exclusionary zoning for first-time home buyers and others.
Ultimately, California must develop a permanent source of funding for housing for our most vulnerable populations, rather than simply going after an ineffective AB1229 approach. Cities and counties would be better served to look at innovative solutions, such as Senate Bill 391, by Sen. Mark DeSaulnier, D-Concord – the California Homes and Jobs Act – which establishes a permanent mechanism to fund the development of affordable workforce housing. And, of course, overdue CEQA reform.
I admire Assemblywoman Atkins’ focus on California’s housing crisis, but this state’s housing future depends on strategic, well-planned policies that will address the specific needs of individual counties and municipalities – not a blanket approach with detrimental, unintended consequences for all of California and in the end, further skew current jobs-housing imbalance.
Governor, veto AB1229.