Who’s in Charge of the California Housing Crisis? (Washington Examiner) September 23, 2019

In the past week, both President Trump and Secretary of Housing and Urban Development Ben Carson visited California to examine its housing crisis. Meanwhile, the state legislature passed a statewide rent control bill and officials in Sacramento are bullying cities to change their zoning laws. A veritable tug of war has emerged between state and local governments, with Washington eager to weigh in. Not only is there a housing crisis, but also a crisis of authority: Who is in charge here?

Though there is a debate over both the causes and solutions, there is little argument that the urban areas of California and elsewhere in the nation face a housing problem. In California, it is largely a result of economic growth because a booming job market, especially in high-tech areas, has attracted more workers than can be housed. The San Francisco Bay Area has added 676,000 jobs and only 176,000 housing units in the last eight years. Estimates suggest that the state needs to add as many as 3.5 million new homes, which Gov. Gavin Newsom promised to see built by 2025. In his first months in office, however, new housing starts have gone down and not up.

Another portrait of the crisis is painted by rampant homelessness in California cities, which is what President Trump came to see. While 12% of the nation’s population lives in California, it has 22% of the homeless population. A study released by the White House this month, “The State of Homelessness in America,” found that four of the five cities with the highest rate of unsheltered homelessness are located in California.

So yes, California, we have a problem. But who is in charge of fixing it?

Although traditionally land-use laws such as zoning and rent control are very much under the authority of local governments, Newsom wants to take charge from the top and impose solutions from Sacramento. Now cities are being ordered to construct specific numbers of new housing units or else the governor has threatened to withhold their gas tax revenues. On the “island” of Coronado, off downtown San Diego for example, the city has been targeted to build 1,001 new housing units but it sits on only 2.2 square miles of heavily built land. The mayor of Coronado rightly objects to these top-down and one-size-fits-all mandates from Sacramento.

The state has already issued warning to cities such as Encinitas, San Bruno, and Cupertino about their housing policies, and a lawsuit against the city of Huntington Beach is in the works. Of course, many California cities caught up in these new state mandates are not even in the neighborhoods of the technology job boom that has created the problem in the first place. They have to be wondering why a lack of planning by major tech firms and the cities that host and tax them has suddenly created a crisis for their land-use planning. As a Brookings Institution study reported this summer, “Many homeowners are opposed to new multifamily development in their communities,” explaining that there are not only lifestyle preferences at stake, but also economic, traffic, and other impacts.

In one sense, we have the California dream of single-family suburban living against the new California nightmare of homelessness and a housing crisis. But in another sense we have a crisis of governance: Who’s in charge here? I would say beware federal and state officials who subscribe to the Rahm Emanuel (former chief of staff for President Obama) philosophy of governance: Never let a good crisis go to waste, it’s a chance to do things you couldn’t do before.

California cities are right to be suspicious when Newsom comes to them saying, “I’m from Sacramento and I’m here to help you fix your housing crisis.” His one-size-fits-all ideas of state rent control and state mandates for higher zoning densities and unrealistic targets for new housing starts will not only fail to solve the larger problem, but create many more.

David Davenport is a contributor to the Washington Examiner’s Beltway Confidential blog. He is a research fellow at the Hoover Institution. He is the co-author, with Gordon Lloyd, of How Public Policy Became War, published May 7.

To view the column at the Washington Examiner:

https://www.washingtonexaminer.com/opinion/whos-in-charge-of-the-california-housing-crisis