California Massively Increased the Amount of Housing the Bay Area Has To Allow. YIMBY Lawsuit Says 'Eh, Could Be More.'

A new lawsuit from two YIMBY groups argues that the state failed to incorporate a jobs-housing balance when calculating the number of new homes the San Francisco Bay Area has to plan for.

In a man-bites-dog story for the ages, California activists are suing the state for planning for too little housing.

On Thursday, the pro-housing development groups YIMBY Action and YIMBY Law filed a petition in the Superior Court of California, County of Alameda, against the state's Department of Housing and Community Development (HCD), arguing that the department failed to consider the Bay Area's imbalance between jobs and housing when determining how many new homes the region has to plan for.

That failure to consider the jobs-housing balance, their petition claims, violates state laws and has resulted in HCD giving the Bay Area a planning quota that's short over 100,000 homes.

"It's not that HCD is even trying to pick a jobs-housing balance and trying to get us to something that's better than the status quo. They're just leaving it out altogether," says Sonja Trauss, YIMBY Law's executive director. "They have to at least consider it. They have to open that political pandora's box."

Understanding what's at stake in the YIMBY groups' lawsuit requires some background on the exceptionally bureaucratic, acronym-heavy Regional Housing Needs Allocation (RHNA) process by which the state government hands down housing production goals to California's metropolitan regions.

Every eight years, HCD gives the state's regional government councils—which in the Bay Area is the Association of Bay Area Governments (ABAG)—a quota for how many new housing units they're projected to need. Regional governments like ABAG then divide up that regional quota among local governments. These local governments are then required to change their zoning laws to accommodate however many units the state and regional governments are saying they need.

Government agencies determining needs, setting quotas, and handing down plans is no free marketer's dream. At the same time, this RHNA process is the main way by which California's state government can force localities to loosen zoning laws that prevent developers and property owners from building housing where the market will bear it.

That's the idea, at least.

The RHNA process has long been criticized for allowing regions to get away with housing production targets that are too low, and local governments to get away with not even meeting these minimal targets; either by not loosening their zoning codes enough or by coming up with byzantine processes that delay or stop zoning-compliant housing projects from being built.

Making these housing production goals closer to what the market is demanding, and then ensuring that local governments actually allow that housing to be built, has been a major thrust of housing reform legislation at the state level over the past several years.

The two laws most relevant to the YIMBY groups' lawsuit are S.B. 375—a climate change bill passed in 2008 that, in part, requires regions to consider the jobs-housing balance as a means of cutting commuters' carbon emissions—and the 2018-passed S.B. 828.

That second bill, notes the YIMBYs' petition, reiterated the requirement that HCD "promote an improved intraregional relationship between jobs and housing" when deciding how many homes a region had to plan for. S.B. 828 also required a number of changes in how a region's housing needs are calculated that have massively increased the number of new homes regions and cities have to plan for.

In June, HCD gave ABAG a regional housing needs determination of 441,176 new homes, up from the 187,990 it had to plan for last cycle, according to S.F. Weekly. The Southern California Association of Governments (SCAG) had its housing allocation increase from 400,000 to 1.3 million units this cycle.

In October, ABAG approved a plan that distributes those 441,176 homes among the Bay Area's counties and cities. That plan still has to be certified by HCD.

These massively increased targets, which will require local governments to permit a lot more housing, amounted to a major YIMBY victory.

Yet some YIMBY activists, as evidenced by Thursday's lawsuit, are not satisfied. Despite the big RHNA increases for the Bay Area, their petition argues that the methodology used by ABAG and HCD did not incorporate any consideration of a regional jobs-housing balance as required by state law.

Had ABAG and HCD properly accounted for that jobs-housing balance, they say, the Bay Area would be required to plan for an additional 137,000 homes on top of the 441,176 units they're already being told to accommodate.

That number is sourced from a July study from UCLA's Lewis Center for Regional Policy Studies. That study argued that the Bay Area should have to plan for roughly one unit of housing for every "supercommuter" (someone whose commute is 90 minutes or more) the region has. The theory here is that these supercommuters wouldn't have to spend so much time getting to work if only local governments allowed more housing to be built closer to job centers.

YIMBY Law and YIMBY Action's lawsuit is demanding that the court force HCD to take into account the region's population of supercommuters and increase the Bay Area's regional housing needs allocation to some 578,000 units.

In January, ABAG sent the methodology it used to distribute its RHNA requirements among local governments to HCD for review. The department is supposed to finalize RHNA allocations by December of this year. Local governments have to update their zoning codes and general plans to comply with RHNA by January 2023.

During that time, local governments can, and will, appeal their RHNA allocations.

The YIMBYs' lawsuit, if successful, will increase the overall targets that the region will have to accommodate, but that still leaves a lot of work to be done throughout the multi-year RHNA process, says Trauss.

"This lawsuit is not the only thing we're doing and if it were, it wouldn't be worth doing," she tells Reason. "We have to do this lawsuit to make sure HCD gives ABAG the right number. Then there's organizing about making that number gets distributed through the region in a way that advances access to opportunity. Once it's distributed, we have to make sure that the cities aren't cheating on their housing element."

It took a lot of years and a lot of bureaucratic plans for California to dig itself into its current hole of housing unaffordability. It'll take a long time, and a lot of effort, for it to dig itself out of its current crisis too.