California has some of the country’s most expensive housing — the direct result of failure to build enough housing. As a new SPUR report points out, one of the major causes of this failure is the state’s decentralized and fragmented housing governance system, which currently does more to deter than incentivize housing construction. In Structured for Success: Reforming Housing Governance in California and the Bay Area, SPUR Research Director Sarah Karlinsky describes the alphabet soup of state agencies that influence the quantity and location of housing development with little to no coordination of efforts to address the state’s housing crisis. We spoke with Sarah about the report’s central insight: although zoning and planning are local actions, the only way to build the millions of housing units California desperately needs is through state-level reform.
What does governance have to do with housing production?
Governance is a huge factor impacting housing. SPUR defines housing governance as the governmental system or set of systems that regulates, incentivizes, impedes, and publicly funds the production of housing. This system includes all the local, regional, and state agencies and officials with oversight of the zoning, permit approval, and funding of housing as well as those agencies and departments whose actions can help encourage — or stall — housing production. It also includes the laws that are passed at the local and state level that govern housing planning, as well as laws that dictate which entity decides whether housing can move forward and under what conditions.
When these systems work in unison to support housing, we will see a lot more housing come online. When they work in opposition to housing, we get something more like the system we currently have.
What are the challenges with the Bay Area’s governance structure as it relates to housing?
The Bay Area is incredibly complex and decentralized. At the local level, it is largely composed of a set of highly decentralized local governments, each of which is making decisions forged by its own internal political logic. When all of these individual decisions are taken together, they create an ever-deepening housing affordability crisis.
At the same time, regional institutions are relatively weak despite the fact that the housing market is regional. The regional bodies responsible for planning for housing cannot, with very limited exception, compel local governments to issue permits to build housing or issue those permits themselves.
A key counterbalance to this decentralized local and regional system is the power and authority of California’s state government. The state has the legal and regulatory authority to set the framework for housing policy and land use planning as well as infrastructure and affordable housing funding in California. But the state hasn’t fully used this power.
This report makes many recommendations for changes at the state level. Why?
The state has enormous power to change the housing story in California. It sets the planning framework within which regional and local governments function. It has the funding power to deliver infrastructure where it is needed and to withhold infrastructure from places that should not support intensive development. The state can pass laws that supersede local zoning regulations, as it has been doing with greater frequency over the past several years. The state also has more tools to solve the large-scale problems facing California today — housing scarcity, inequality, and climate change — and the ability to ensure that regional and local planning actions contribute to the solutions.
You call for the creation of a new California housing agency and a new California planning agency? Why does California need these agencies?
The proposed housing agency is needed because state governmental institutions for housing are relatively weak and their focus on housing is diluted. The state agency responsible for housing also includes a wide variety of other unrelated departments and commissions. The departments that do work on housing may not be equipped to demonstrate how various state policies can negatively impact housing production. Lastly, the state has a highly complex and fragmented affordable housing funding system, which creates costly inefficiencies in the production of badly needed subsidized housing units. We recommend that the state create a standalone housing agency to focus solely on all aspects of housing production and policy in California.
The proposed California planning agency would subsume and replace the current Office of Planning and Research. It would place long-range planning on par with the other core functions of government. The last time a long-range land use vision for California was adopted was 1978. California needs an agency whose core focus is to engage in long-term land use planning and to align other state agencies in that effort.
What can regional governments do to help alleviate California’s housing crisis?
Quite a bit. SPUR recommends that all the regional agencies, not just those that focus on housing and land use, are organized to implement the region’s housing and land use plans, which are known as the Regional Housing Needs Allocation Process and the Sustainable Communities Strategy. Regional agencies that focus on air and water quality, among other things, can adopt regulations that impact the feasibility of different types of housing, so their actions need to align with and support regional housing and land use plans.
Is there anything local governments can do to help build more housing?
Absolutely. Even if every state and regional recommendation in our report were adopted, cities would still have some power to determine where housing developments occur within their boundaries, and they could make planning entitlements and permits more or less challenging to secure. SPUR recommends that any housing that conforms with local zoning not be required to undergo a discretionary process at a planning commission. Once a project has been approved, the permits needed to build it should be made easy and straightforward to secure. Finally, fees and requirements for new housing should not be so onerous that they make housing less financially feasible to build.
The report notes that the housing crisis is exacerbated by some powerful voices saying no to housing in their communities. How can housing governance address this problem?
SPUR recommends that the processes to get feedback on development plans should not just include the usual suspects — those with the time and resources to participate. If our public processes are going to truly reflect the public, effort needs to go into ensuring that everyone can participate, including people who have inflexible jobs, people whose primary language is not English, people who don’t track land use changes in their limited free time, people with small children, people who work in a community but don’t have an opportunity to live there yet, and people who may not want to spend hours attending a hearing so that they can speak for two or three minutes. All of these people are members of the community with critical perspectives to share.