During its just-closed biennial session, the California Legislature passed — and Gov. Gavin Newsom signed — dozens of bills aimed toward relieving the state’s acute shortage of housing.
Newsom capped the trouble late last month by signing two somewhat similar bills that make it easier to construct housing on unused or underused business properties.
“California has made historic investments and brought unprecedented actions to tackle the state’s housing crisis over the past 4 years,” Newsom said. “But we recognize there’s more work to do. This package of smart, much-needed laws will help us construct latest homes while rebuilding the center class.”
The 2 bills typify the thrust of laws and the Newsom administration’s tougher enforcement of state housing quotas on local government — making more land available for housing by reducing the power of local governments, cities particularly, to thwart development through restrictive zoning, convoluted constructing standards and other practices.
Newsom’s efforts on housing over the past 4 years won him a lengthy plaudit by Recent York Times columnist Binyamin Appelbaum last week, thereby enhancing the governor’s drive to turn out to be a national political figure.
The praise is well-deserved, so far as it goes. But making more land available is only one think about the thorny housing crisis and up to now, there’s little evidence that by itself it’ll end in more construction.
The state says California needs to be constructing 180,000 units a 12 months to fulfill current demand and whittle down the backlog, but at best we’re seeing about 120,000 housing starts and when the housing lost to fireside, old age and other reasons is subtracted, the online gain is not more than half of the 180,000 figure.
The most important constraints are financial — ever-rising costs of construction and the insufficient private sector investment due, partially, to those costs.
The state’s most pressing housing need is apartments for low- and moderate-income families — projects that not only draw essentially the most local opposition but have gotten prohibitively expensive to construct.
The San Francisco Chronicle reported last month that based on documents for the development of three “inexpensive” housing projects, the per-unit cost is greater than $1 million and approaching $1.2 million for one.
San Francisco is a notoriously difficult place to construct housing, which those outrageous numbers reflect. But $1-plus million is common across the Bay Area and statewide, average costs of projects meant to deal with low- and moderate-income families are well above $500,000 a unit — enough to purchase a pleasant single-family home in lots of California communities.
Purely private developments cannot pencil out unless owners can charge market-rate rents which might be unaffordable to those in lower income brackets, so developers for that segment must depend on packages of personal funds, tax credits and money from state and federal governments.
Nevertheless, projects using even small portions of public funds are subject to state laws mandating that they use union employees, which is one in every of the massive reasons they’re so expensive.
The two bills that Newsom signed last month to make business property available for housing contain boilerplate language mandating union labor. In actual fact, there are two bills on the identical subject because two different construction union factions couldn’t agree on the precise language and to interrupt the stalemate, legislative leaders finally decided to send each to the governor.
The land that Newsom and the Legislature have opened for housing needy families will go largely unused if development costs proceed to soar.
CalMatters is a public interest journalism enterprise committed to explaining how California’s state Capitol works and why it matters. For more stories by Dan Walters, go to Commentary.
