BOTTOM LINE, UP FRONT: The State of California's new quota system gives the State leverage to force city governments allow more housing, and the State is starting to push. This is good, and it is long overdue.
As you all know, we're in a housing crisis. The root of the problem is that the most desirable places in greater Los Angeles and the Bay Area haven't grown in decades. Places like Beverly Hills and Piedmont make it incredibly hard or flat-out illegal to build more homes. This process is pretty straightforward - educated professionals get priced out of places like Beverly Hills and Piedmont, so they move to places like Echo Park or North Oakland - and poor people and minorities are out of luck. It's gotten so bad that even outright wealthy types like lawyers and doctors are priced out. These days, the average house sells for and $3.1 million in Beverly Hills and $3.2 million in Piedmont. Housing should be no more than 1/3 of your income, so to afford a $3 million house, you ought to pull down $432,000 a year. That's about 3 1/2 times what the average lawyer makes, and about twice as much as the average doctor.
One of the State's major reforms to tackle this is to establish a binding quota system. Each region of California gets a new homes quota for the next 8 years, and the cities divide the quota amongst themselves. In greater LA, the regional quota is 1.3 million, and in the Bay Area it's about 440,000. Each city is legally required to produce a realistic, binding plan to meet their share of the quota. And if the city's plan isn't realistic, the State can veto the city's plan, with real consequences. (More on the consequences later.)
SO WHAT ARE THE CITIES DOING TO MEET THEIR QUOTA?
There are a few cities which are doing things in good faith, like Berkeley, Culver City, and Sacramento. But most of these cities' plans to meet their new housing quotas are bullshit. To illustrate:
- Beverly Hills: "We'll tear down a bunch of 10-story office buildings to build 5-story apartment buildings."
- Davis: "We approved some housing in 2009 which hasn't been built yet. We can count those, right?"
- Piedmont: "We're going to buy a piece of Oakland, and put apartments there."
- Redondo Beach: "We'll evict Northrop Grumman, which is our city's single largest employer."
- South Pasadena: "We'll bulldoze City Hall and replace it with apartment buildings."
All of this is practically begging for the State to veto city housing plans and bring the hammer down.
SO WHAT HAPPENS IF THE STATE VETOES A CITY HOUSING PLAN?
If the State vetoes the city's plan, then all city zoning laws are suspended until they get a legally valid plan together.
In plain English: anyone can build any housing, anywhere, of any size, any density, and any shape.
There's nothing city authorities can do about it as long as: (i) it meets health and safety laws, (ii) it's 100% middle-class housing or 20% rent-controlled affordable housing. If all the stupid City zoning laws disappear, suddenly it's financially viable to build basic 3-story apartment buildings for normal people like the ones we used to build. On top of it, it makes the city ineligible for a bunch of state and federal money.
This is a big deal.
Because each of the 88 petty kingdoms of Los Angeles County, the 101 petty kingdoms of the Bay Area, and the 26 petty kingdoms of Greater Sacramento has their own set of insane micromanaged laws that make it difficult or illegal to build more homes.
Beverly Hills's law allows the city Planning Commission to kill any proposed apartment building if it doesn't "promote the harmonious development of the area." ("Harmonious development" = "whatever we feel like.") Oh, and if the City's busybody architectural commission doesn't like your design, the architects can veto it, too.
Cupertino requires four parking spaces per single-family home. (Think to yourself: how many families do you know that own four cars?)
In Davis, 50% of the city is tagged as "planned development," which means that the neighborhood is frozen in place, period. You have no way of determining what is and isn't legal to build unless you schlep to City Hall and dig through obscure-ass planning documents from 1972.
But if those local laws are suspended, city governments can't use bullshit local laws to stop anything from being built. You want to build rowhouses in San Jose? 100% legal. You want to tear down an old, crummy tract home in suburban LA and put up a dingbat? Mais oui! You want to put a skyscraper up in Palo Alto or Santa Monica? ¡Sí señor!
With all these new State powers, the city councils are taking a big gamble. The city councils are wagering that the State is going to rubber-stamp whatever bullshit paperwork they send in. After all, the State has been doing wishy-washy nonsense on housing for 40 years. The city governments were doing this back when John Travolta was a sex symbol.
SO, IS THE STATE GOING TO CRACK DOWN?
Oh yes. The State isn't having any of it.
Last week, Gov. Newsom's administration vetoed the City of San Diego's housing plan. San Diego's problems were the same ones you see everywhere: putting all the new apartments in neighborhoods with minorities and poor people, not allowing any new homes in rich and white neighborhoods, and playing games with the numbers to make it look like the city was trying to follow the law.
The State didn't buy it, and gave San Diego an ultimatum: fix your plan in 30 days, or anyone can build anything anywhere they want, as long as it meets the health and safety code.
You couldn't imagine a better target: San Diego's city government has done some good stuff to encourage more housing construction, and it's the state's second-biggest municipality. But it's still nowhere near enough.
This is good, and it's long overdue that the State is finally bringing its powers to bear against shitty, shortsighted local governments. Local governments have screwed the pooch for almost half a century, and it's how we got into this crisis in the first place. It sends a message to city councils that the State isn't willing to put up with any more gamesmanship.
Because if city councils keep playing games, the State's response is clear: "fuck around and find out."