By Joel Fox.
A major concern for California policymakers is the housing crunch. Business says housing cost is a big reason companies move operations elsewhere or are discouraged from coming to California; homeless advocates decry the lack of units for people who find themselves with no place to go; the cost of housing is driving away the middle class. The legislature is trying to address the problem with a number of bills. Legislators could do more by trimming back obstacles to home building.
But the action on housing means local communities buying into changes making it easier and less costly to build. Not easy when opponents of new construction feel California is already built up enough. Lean inventories and low vacancy rates have increased prices for home buyers and renters. The push to build more is stymied by local housing restrictions and demands put on builders by the California Environmental Quality Act.CEQA lawsuits are often employed as delaying tactics to discourage developers and run up the cost of projects. Local homeowner groups frequently oppose developments.
In Los Angeles, the housing crisis has brought competing solutions: an initiative filed by labor destined for the November ballot and a second measure aimed at the municipal ballot next year written to dramatically slow the pace of high rise development. Competing interests will try to defeat each other.
The housing crisis is not solved by initiative wars.
The housing problem is having an effect on California’s business and workforce. Beacon Economics co-founder Chris Thornberg said we are driving the poor and middle class out of the state with our policy choices. (He also argues with Millennials finally settling down and looking for homes, pressure to satisfy this influential demographic group will force more home building.)
Toyota officials said they moved headquarters from Torrance, south of Los Angeles to Texas mainly because of housing costs.
The push is on to find ways to build. Subsidies alone for lost-cost housing are not the fix. Governor Brown is on board with the market solution that “supply is going to bring down the cost.”
Last Friday, Governor Jerry Brown’s budget endorsed Senate President Kevin de Leon’s call for a $2 billion housing bond to help the homeless with mental illness. Because the measure draws on revenues all ready collected under the Proposition 63 tax to help those with mental illness passed by the voters in 2004, some Republicans are expected to support the effort.
Just one of many examples of legislative measures, Assemblyman Marc Steinorth’s Assembly Bill 1736, the “Homeownership Savings Account,” is moving through committees with bipartisan support. It would allow individuals to contribute up to $10,000 per year to an account and exempt the account’s funds from income tax as long as the funds are withdrawn and used for a first down payment or closing costs.
It will take many different fixes to deal with the housing crisis.
We could wait, as was suggested at the Milken Institute Global Conference, for the hyperloop system to be built so that people might live far away from cities and get downtown in but a few minutes. While it’s tempting to believe such a technological answer awaits us, more practical, close range solutions are in order.