One Important Question About California's Housing Future
Third time's the charm? For the third year in a row, California legislators are considering a bill by Senator Scott Wiener of San Francisco which would override local zoning regulations to allow greater density and/or intensity of residential construction (Maryland, Virginia, and more surprisingly, Nebraska have also recently joined that club).
2020 will be Wiener's third attempt to pass a statewide zoning-reform bill which would require cities to allow taller and denser housing in locations served by high-quality public transit. Senate Bill 50 (SB50) is on the table again with revisions after being killed in committee last year. And the direction in which SB50 is evolving continues, in my mind, to highlight a contrast between California's approach to housing reform and the approach that was successful in Oregon last summer and is being explored elsewhere.
That contrast, boiled (and perhaps dumbed?) way down, is between a simplifying approach which fundamentally aims to remove distortions from the housing market (but isn't as targeted to address locally acute, immediate problems), and a tinkering approach which aims to treat as many of the symptoms of housing dysfunction as possible, as effectively as possible.
The important question I want to pose: Which approach is more likely to resolve our states’ and cities’ housing dysfunction in a relatively permanent and resilient way?
The Simplifying Approach
Oregon went with a broad-brush, simplifying law last year: the one passed last summer effectively allows four-unit buildings on most residential lots statewide. It doesn't apply different rules to different neighborhoods, except based on a couple broad categories of city size. It doesn't analyze where there's transit and where there isn't, or where there are disadvantaged populations and where there aren't.
It does embody a simple principle: no neighborhood gets to be immune from change. Every neighborhood must allow at least gradual, incremental change. In doing this, it doesn't solve Oregon's housing problems or address the issues faced by higher-density neighborhoods in Portland where there is colossal housing demand. But it does put a stake in the ground. And it eliminates a crucial source of distortion in Oregon's housing market, which is likely to have profound ripple effects over time.
A similar approach has been embraced by cities that have broadly legalized certain types of missing-middle housing, like duplexes, triplexes, or accessory dwelling units, in an across-the-board sort of way. The state of California has also done this with ADUs, and it is producing remarkable bottom-up change already: a twenty-fold increase in ADU permits in Los Angeles in just two years.
This approach evokes the via negativa (“path of subtraction”) of risk and fragility scholar Nassim Taleb, whom we've called the Patron Saint of Strong Towns thinking. The premise of via negativa is that when you encounter dysfunction in a complex adaptive system—like an ecological system, the economy, the human body, or of course, a city—you are better off looking to remove factors that might be causing the problem or distorting the system's functioning, rather than piling on additional interventions to treat the symptoms of that distortion. Got a headache after a night on the town? Via negativa directs you to drink water and maybe lay off the alcohol. Taleb contrasts it with naive interventionism, the approach which would have you pop two ibuprofen to treat the headache.
The new SB50 (and last year's iteration) takes a page from Oregon’s book by including a crucial simplifying, via negativa element: upzoning of nearly all residential areas to allow a four-unit building on a residential lot. This kind of blanket, broad but shallow, change removes a systemic distortion, categorically—that neighborhoods are prohibited from evolving to the next increment of development intensity—while not micromanaging and layering on new distortions.
The Tinkering Approach
In most other ways, though, California's SB50 exemplifies the tinkering approach, for reasons that are understandable but (in my estimation) have more to do with good politics than good policy. The question of which is the best path forward for California might be a moot point, after years of coalition-building behind this bill. (And let's be clear that on balance, I really hope the bill can pass this year in some form—I think it's still better for California than another trip to the drawing board.)
And yet, I have a lot of reservations about the tinkering approach to housing policy, and I hope more states don't look to California as a model for how to do this work.
The LA Times explains what’s new in SB50 this year, and the rationale behind it:
Wiener says he heard from mayors and city officials that they supported the goal of the bill — to encourage more affordable and market-rate housing near transit and jobs — but that they wanted the flexibility to decide where the density should be. The revised SB 50 allows cities two years to adopt their own plans; if they fail to, the bill’s one-size-fits-all zoning takes effect.
The local plans would have to zone for as much housing as would be allowed under the original SB 50 requirements, without increasing car travel or concentrating the new homes in low-income areas. For example, a city could allow taller apartment buildings in one neighborhood but only smaller apartment buildings in another that seemed less suited to greater density. Communities deemed to be at risk of gentrification and displacement would have five years to develop their alternative plans.
The local option is important. It’s generally preferable to have the state set housing targets and let local officials — who are closest to the people most affected by land-use decisions — figure out how to meet them.
In theory, more local flexibility to respond to local circumstances is great—if you're dealing with a situation where local officials are acting in good faith and in the broad public interest.
Housing in California is not that situation. We've talked before in The Party Analogy and The Neighbor's Dilemma about the ways in which development, particularly in automobile-oriented places, is a "bad party" where each arriving guest makes the experience worse for the guests who were already there. Layer on top of that the perverse incentives created by California tax policy, and you have a classic Prisoner’s Dilemma situation in which every local government has every incentive to push the burden of housing its workforce onto its neighbors. It takes great political courage to go the opposite direction, and while some California mayors and other elected officials have shown that courage, others decidedly have not.
Housing is a collective action problem, in which much of the painful feedback from local actions (say, San Mateo County cities approving only one new home for every nineteen new jobs over a 5-year period) is felt not by those local decision-makers, but by residents of nearby cities and by people displaced from or kept out of California altogether: i.e. people who don't get a vote.
In that circumstance, what is likely to happen when you give localities broad leeway to tweak the rules within a set of arbitrary targets? I submit that they’re likely to find increasingly devious loopholes or ways of complying with the letter but not the spirit of the law. Cities that desire to be exclusionary have decades of experience with zoning for residential density only in places or forms where the market doesn’t support it or the infrastructure won’t permit it, to ensure that little to none of that “zoned capacity” actually gets built.
The underlying collective action problem that is housing is, I suggest, likely to get easier only when the state gives localities a simple, ironclad set of “Here’s what you don’t get to do” rules that, because of their simplicity and universality, are hard to game or weasel out of.
SB50’s micromanagement problem, as well, creates brand-new distortions, each of which one can imagine resulting in perverse incentives and unintended consequences. Witness this description from the San Francisco Chronicle of some of the bill's convoluted requirements (for communities that don't opt out by writing their own plan):
Under the bill, local governments in counties with more than 600,000 people could not block residential buildings of at least four or five stories within half a mile of rail stations and ferry terminals, provided those projects meet other local design standards. In the Bay Area, San Francisco, Alameda, Contra Costa, Santa Clara and San Mateo counties meet that population threshold.
The measure would also remove density limits and reduce parking requirements within a quarter-mile of stops on bus lines with frequent service and in high-income census tracts with lots of jobs and good schools, regardless of their proximity to transit.
In smaller counties, including Marin, Sonoma, Solano and Napa, cities with more than 50,000 people would have to allow up to 15 extra feet of height for buildings within a half-mile of transit stops.
Why 600,000? Even if the counties that currently pass that threshold are all qualitatively different from those that don’t, will that be the case in 10 years? In 20? Why precisely 15 feet of height? Surely there’s no way a community which is free to apply “other local design standards” could game that requirement, right? And the question of how SB50’s passage would affect communities’ decisions where to build or not build transit has been raised from the bill’s very first incarnation as SB827.
This map from Urban Footprint last year illustrates the complicated pile of categories and qualifiers that define SB50:
Making every city's housing policy dependent on targets which, themselves, could become political footballs and/or become drastically out of step with demand or market realities is a bad move.
Another bill in the state Assembly, AB 1279, acquired some positive attention last year from tenants' rights and anti-gentrification groups who are skeptical of SB50, for its similar approach but "laser focus" on already wealthy, exclusionary communities, which it labels "high-resource areas." AB 1279 might be back in 2020.
The enthusiasm gap reflects what’s really driving the complexity of both laws, with their laundry list of exemptions and qualifiers: politics.
Wiener’s bills have been enormously controversial from the get-go, and unlike in other places where tenants’ advocates and market-inclined YIMBYs have more readily found common cause, in California there is, as a rule, deep distrust between these groups, for a lot of reasons I’m not going to go into here.
This is how you get convoluted policy: the need to build coalitions and bring the right mix of partners on board to get a law passed. Unfortunately, it often leads to policy that treats the symptoms while worsening the disease. The disease, in this case, is in large part that it’s complicated, time-consuming, and uncertain to try to build anything in California.
I agree with housing advocates that California needs some form of statewide action to cut this particular Gordian knot. I'm skeptical that the complicated tinkering of SB50 and AB1279 is the right approach. It may be the only approach available at this point, but other states should go down something that looks more like Oregon’s path.
(Cover photo via Flickr)
Daniel Herriges has been a regular contributor to Strong Towns since 2015 and is a founding member of the Strong Towns movement. He is the co-author of Escaping the Housing Trap: The Strong Towns Response to the Housing Crisis, with Charles Marohn. Daniel now works as the Policy Director at the Parking Reform Network, an organization which seeks to accelerate the reform of harmful parking policies by educating the public about these policies and serving as a connecting hub for advocates and policy makers. Daniel’s work reflects a lifelong fascination with cities and how they work. When he’s not perusing maps (for work or pleasure), he can be found exploring out-of-the-way neighborhoods on foot or bicycle. Daniel has lived in Northern California and Southwest Florida, and he now resides back in his hometown of St. Paul, Minnesota, along with his wife and two children. Daniel has a Masters in Urban and Regional Planning from the University of Minnesota.