Rejects effort.

California, mired in a housing crisis, rejects effort to fix it

Conor Dougherty

For years, a determined state senator has pushed a singular vision: a bill challenging California’s devotion to both single-family housing and motor vehicles by stripping away limits on housing density near public transit.

Now the state will have to look for other ways to relieve its relentless housing crisis. On Thursday, one day before the deadline for action on the hotly debated bill, it failed to muster majority support in a Senate vote.

In the end, in a Legislature where consensus can be elusive despite a lopsided Democratic majority, the effort drew opposition from two key constituencies: suburbanites keen on preserving their lifestyle and less affluent city dwellers seeing a Trojan horse of gentrification.

The failure marks the third time since 2018 that state Sen. Scott Wiener, D-San Francisco and one of the country’s most outspoken advocates for reforming local zoning laws, has tried and failed to push through a major bill meant to stimulate housing production.

“This is about Californians who are hurting right now, and we have an obligation to represent them,” Wiener said in a speech on the Senate floor.

The bill’s demise is the latest turn in a long and acrimonious struggle over how much of the answer to California’s most pressing issue lies in rewriting the state’s rules to encourage building.

Wiener’s measure, Senate Bill 50, would have overridden local zoning rules to allow high-density housing near transit lines, high-performing school districts and other amenity-laden areas. Supporters portrayed it as a big but necessary step toward reducing the state’s housing deficit — and helping to curb carbon emissions from long-distance driving — by fostering development in dense urban corridors. Opponents decried it as state overreach into local land-use rules.

There is broad agreement that the state’s extraordinary cost of living and escalating homeless problem is rooted in a shortage of housing in general and a dearth of lower-cost housing in particular. But many remain skeptical of remedies involving big structural changes.

“The only thing that folks agree on is that we need housing,” said state Sen. Andreas Borgeas, R-Fresno, who voted against the Wiener bill. “How we get there, everyone has a different theory.”

Gov. Gavin Newsom, who came into office a year ago with bold pronouncements about a “Marshall Plan for Housing,” said he supported Wiener’s efforts to increase density near transit, but never endorsed the bill outright.

Newsom campaigned on a promise to usher in reforms that would lead to the construction of 3.5 million housing units by 2025. That output would be more than quadruple the current rate, and the governor has started referring to it as a “stretch goal.”

California is not only well behind that pace, but the number of housing permits has actually turned downward — hovering around 100,000 units in 2019 — despite a strong economy and a median home value, $556,000, that is more than twice the national figure.

It is hard to overstate the threat posed to the state’s economy and prosperity. Housing costs are the primary reason that California’s poverty rate, 18.2%, is the highest of any state when adjusted for its cost of living, despite a thriving economy that has led to strong income growth and record-low unemployment.

The consequences are in plain sight. Cities are struggling to deliver basic services because teachers and firefighters cannot afford to live near their jobs. A surge of sidewalk tents and homeless camps has prompted city leaders to urge a state of emergency — and led lucrative business conferences to find other locations. Many Californians are moving to cheaper states, and homelessness routinely tops the polls of residents’ biggest concerns.

Liberal and conservative economists agree that the housing squeeze arises in part from an excess of process and local rules. Attempts to reform exclusionary zoning are central to the housing plans of most of the current Democratic presidential candidates, including Sens. Bernie Sanders, Elizabeth Warren and Amy Klobuchar.

The rub is in how to rectify that — and which level of government should take the lead. The answer produced by S.B. 50 was to transfer power from cities to the state. Surprisingly, perhaps, this was an answer that many city officials, frustrated with their own intransigent development processes, endorsed.

In addition to supporters like the Natural Resources Defense Council, the payments startup Stripe and unions including the United Farm Workers, the bill gained the backing of several counties and dozens of elected officials, including Mayors London Breed of San Francisco and Adrian Fine of Palo Alto — both representing cities where development is notoriously expensive and difficult.

But their opponents were also a diverse coalition. Take, for instance, Livable California, a group that was formed largely to oppose Wiener’s bill and others like it. The organization was founded by homeowners in exclusive suburbs in places like Marin County and the San Francisco Peninsula, but also counts activists from Leimert Park, a middle-class and predominantly African-American neighborhood in South Los Angeles, among its members.

“Nothing in this bill is giving us more say; it’s taking away what little say we have now,” said Isaiah Madison, a 24-year-old graduate student in Leimert Park who recently joined Livable California’s board. “I’m not against development. I am just for communities navigating that development with a developer. We have community plans in South Los Angeles that we’ve been working on for 30 years that included a lot of input from a community that has historically been underrepresented in urban planning, and I think that’s important to protect.”

The road to S.B. 50 began in the previous legislative session, when Wiener introduced a similar measure that prompted a national conversation about exclusionary land use rules that lead to segregation by income and race. It also tested the degree to which even liberal California voters were ready to embrace the higher-density neighborhoods near job centers, an approach that various policymakers and researchers say is crucial to curbing emissions that cause climate change.

That bill was killed in its first committee vote in 2018. Wiener’s office has spent the intervening years modifying it to attract support. Among other things, provisions were added to protect tenants from displacement and to delay implementation for two years to win over cities that said the bill hampered passage of their own housing plans.

Though the governor’s office says it still wants a big housing bill like S.B. 50, Newsom has also declared that zoning reform is useless if cities do not build in line with state housing plans. To that end, he has pushed an initiative to build affordable housing on public land, pressured cities to accommodate more housing and actually issue permits for what it zones, and signed legislation penalizing cities that do not meet their state housing goals.

The governor also authorized a lawsuit against Huntington Beach, a city of 200,000 in Orange County, for failing to comply with state housing laws, and warned other cities that they faced similar action.

While Wiener has been pushing his zoning bills, the legislature has passed several less sweeping but potentially significant measures that could add up over time. One prevents cities from changing their zoning laws to reduce future housing, and another that makes it legal to build three units on single-family lots across the state, regardless of local rules.