Tackling Housing Affordability

The Government of California is taking action to hold its cities accountable for affordable housing. In a first-of-its-kind step, the state has filed a suit against its city, Huntington Beach, for "willfully refusing to comply with state housing law, even after extensive attempts to offer partnership and support from California Department of Housing and Community Development."

Approving this action, Gov. Gavin Newsom said that the Attorney General had filed the suit against the City of Huntington Beach on Friday. "The state doesn't take this action lightly," Newsom said. "The huge housing costs and sky-high rents are eroding the quality of life for families across the state. California's housing crisis is an existential threat to our state's future and demands an urgent and comprehensive response."

The problem with the City of Huntington Beach began in 2016 when the city's residents disapproved a proposal to amend the housing plan to add more affordable housing. Since then the city has fallen short of its required quota for affordable housing by 400 units.

California cities and counties are required by law to draft and adopt a housing plan that meets the needs of the broader region and its economy. Under this law, the city’s housing plan must accommodate a fair share of the regional housing needs and provide zoning that encourages the development of housing that is affordable to the city’s residents across all income levels, including affordable housing and middle-income housing.

Though Huntington Beach had complied with this law in 2013, the Governor's office said that the city had amended their housing plan by 2015 and significantly reduced the number of new housing units being built. It had also rejected a proposal by the Department of Housing and Community Development to build additional units.

“Cities and counties are important partners in addressing this housing crisis, and many cities are making herculean efforts to meet this crisis head-on,” Newsom said. “But some cities are refusing to do their part to address this crisis and willfully stand in violation of California law. Those cities will be held to account.”

Simply Not Enough Housing?

The steps being taken by the state government may just be what California needs to tackle its affordable housing crisis.

In his first budget, after being elected in 2018, Gov. Newsom allocated $500 million for incentives for cities that allow for new housing production and $250 million to provide technical assistance for cities to responsibly ramp up zoning and permitting processes. The Governor’s budget also includes another $1 billion in other funding for housing construction.

According to a commentary in the Voice of San Diego by Brendan Dentino, co-Chair of the YIMBY Democrats of San Diego County Policy Committee and a housing policy consultant, and Maya Rosas, Founding President of the YIMBY Democrats of San Diego County and an urban planner, advocates are building more homes in more neighborhoods to combat the housing affordability crisis in the Golden State. They said that in the last few years, elected officials have also begun to take action to mitigate this crisis.  However, despite the "positive legislative and electoral developments," Dentino and Rosas said that merely to satisfy the current household growth in California, the state needed to build 1.8 million dwelling units.

A recent article in Forbes by Ingo Winzer, President, Local Market Monitor, revealed that while some markets in California had seen a more stable housing growth, certain California markets, especially those like San Francisco, Anaheim, Riverside-San Bernardino, Oakland, San Jose, and Los Angeles had seen home prices that were 25 percent or more above the income price (a calculated price closely tied to local income).  "The reason these markets are so over-priced, of course, is that the local economies have created demand for housing much faster than builders can produce new supply," Winzer wrote while cautioning investors that while they could still find opportunity in these markets, they needed to carefully check for the risks.