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Need and Opposition: Understanding California’s Housing Paradox

California’s Housing Crisis

California, whose economy ranks as the fifth-largest in the world, is the most populous state in our nation. It is home to more people than the entirety of New York, Maine, New Hampshire, Vermont, Massachusetts, Rhode Island and Connecticut combined. Its attractiveness as a destination means newcomers pour forth from buses, planes, and trains every day. Some are looking for fame, some for fortune, and some simply for a new start. But they’re all looking for a new place to live. And therein lies the rub.

California faces two diametric and symbiotic problems: A massive shortage of rental housing and an equally massive public opposition to building that housing. A 2017 study by the US Department of Housing and Urban Development placed 25 percent of America’s homeless population within California cities; a staggering 134,278 people. Twenty-seven percent of respondents to a recent UCLA study of LA residents said that they had fears of becoming homeless. That makes it all the more unsettling that, according to The Mercury News, over 97 percent of California localities are right now afoul of a state government measure designed to spur growth in housing development, both market-rate and affordable. Of those, 70 percent are behind in both categories.

There are legislative measures being worked on, however. The idea behind Senate Bill 35 (SB35) is to expedite the permitting process and set development goals for cities tied to California’s state development guidelines, called Regional Housing Needs Allocation (RHNA). This is meant to boost the supply of housing and address the crippling affordability crisis, but that commitment is hard to square with the actions of city governments and the deep-rooted instincts in the urban enclaves that leave residents viewing housing development as a harbinger of gentrification.

In that same UCLA poll, 52 percent of respondents said that housing developments have a negative impact on their area. Sixty-eight percent said that new building should only take place in areas already zoned for multifamily housing, which crops closely the industry’s potential to grow to meet the burgeoning demand. But in the same study, 68 percent of 18- to 29-year-olds and 73 percent of 30 to 39-year-olds say they or a close friend or family member have considered moving out in the last few years because of rising housing costs.

“Gentrification” is a soupy, broadly-defined word that encompasses a process by which residents of an underserved area are economically pushed out by new development. It brings to mind heart-wrenching images of historic buildings bulldozed in favor of a new Whole Foods, and moustachio-ed hipsters displacing the elderly and the less-fortunate in America’s cities. This is often far from the truth, but perception guides the reality. Many of the same activists who decry the affordability crisis will, in the same breath, slam new development, which showcases this paradoxical problem.

Without new development, the industry can’t increase the supply of housing. Without increased supply, the industry cannot hope to address homelessness OR affordability. Despite this bleak outlook, SB35 has very few teeth. The CEO of the California Housing Partnership, when asked about the penalties of not meeting the goals set forth in the legislation replied succinctly, “not much.” Some cities may even ignore them altogether. That is disheartening, both for an industry that has a clear solution as well as the would-be residents of new development, who desperately need the help.