Victory for Low Expectations! New California Housing Bill Isn't Terrible!
A positive but marginal reform to the Golden State's byzantine housing regulations
California has passed a half-decent housing bill, if you can believe it. I wouldn't call it libertarian bill, but it at least evinces an awareness that it's a problem when local officials to block housing projects they don't like.
A.B. 829—sponsored by Assemblyman David Chi (D–San Francisco) and signed into law yesterday by Gov. Jerry Brown—denies state funding and federal tax credits administered by the state to any city that requires local elected officials to sign a "letter of acknowledgement" before a subsidized housing project can move forward.
The target of the bill is Los Angeles, where city councilmembers must issue just such a letter before any new affordable housing funded by the recent Proposition HHH can go up in their districts. This veto power has unsurprisingly been used to wither keep unwanted housing out or to demand various perks and concessions from developers.
Needless to say, publicly funded housing is not the libertarian approach to sheltering low-income Californians. Nevertheless, it is the solution California is sticking to for the moment, and these arbitrary and politicized letters of acknowledgement have only made the process more sluggish and bureaucratic.
A recent Los Angeles Times investigation found examples of city council members refusing to issue these letters of acknowledgement because they felt their district had already accepted its "fair share" of affordable housing projects, or because they did not like the façade of planned apartment buildings. One councilman, Curren Price, even developed his own set of guidelines for what affordable housing developers would have to do in order to earn his letter of acknowledgement, including a requirement that projects on commercial corridors provide community benefits like pocket parks.
Essentially allowing every member of the city council to write their own rules for new development has been incredibly frustrating for L.A.-area developers.
"With no standards to govern when the letter is issued, in one district a developer could get a green light; in another, the exact same project meeting objective criteria could be killed for no stated reason," Shashi Hanuman tells the Times. Hanuman, an attorney for the nonprofit law firm Public Counsel, is helping to sue the city of Los Angeles over these letters.
Using the carrot that is state affordable housing funding to get localities to drop one small part of their byzantine rules for approving new housing is thus welcome. But it's hardly sufficient, says Faizah Malik, another attorney with Public Counsel.
"We welcome the Governor's signature on this important bill," said Malik in a statement. But A.B. 829 "hasn't removed any other processes that permit backroom vetoes, and it hasn't taken steps to remediate for the harm that this illegal policy has caused."
Indeed, even when affordable housing projects have the full-throated support of their local representative, California's voluminous regulations give neighborhood NIMBYs ample opportunity to stall, shrink, or stop unwanted development.
One need only look at the controversy surrounding a planned apartment building for formerly homeless people in East Los Angeles, where a decade-long battle has been waged between local residents and Los Angeles County's main transit agency, which is trying to get approval to build a below-market rate apartment building on a vacant lot it owns.
Despite having secured the support of Councilman Jose Huizer—whose district includes the proposed building—in early 2016, the project has gone nowhere, stalled first by appeals from angry neighbors who wanted a park on the site instead, later by a lawsuit from business owners worried about shadow and construction dust. The Los Angeles Times has called that suit "NIMBYism at its worst."
A.B. 829 does nothing to address these kinds of roadblocks. Nor do they tackle some cities' informal practices that impose a letter of acknowledgement requirement in all but name.
Take bill sponsor Chui's own city of San Francisco, where a practice known as "supervisorial prerogative" has seen individual supervisors (San Francisco's version of city council members) exercise an effective veto over new housing projects in their district.
Back in July, the Board of Supervisors bowed to this prerogative in voting to further delay approval of business owner Robert Tillman's plans to convert a laundromat into a zone-compliant apartment building in the city's Mission District after Supervisor Hillary Ronen—who represents the Mission—demanded a third shadow study be conducted on proposed building.
Tillman is now suing Ronen and the City of San Francisco over this delay.
In response in A.B. 829, Los Angeles Mayor Eric Garcetti and members of the city council have begrudgingly said that they'll repeal the "letter of acknowledgement" requirement for the approval of new housing projects.
To reiterate, publicly funded construction is hardly the ideal way end California's housing woes. But absent some sort of free market revolution, making the approval of such housing subject to fewer political roadblocks, however marginal the change may be, is a small step toward sanity. This is California we're talking about. It's a miracle when anything gets built.