By Mike Egan

Unless you own a lot of residential rental property, you probably concede there is a serious housing problem in California. Rarely a day goes by we don’t hear about, read about, or directly witness evidence of the problem. There’s no question it is real.

Our state has a lot going for it: weather, resources, culture, strong economy, unparalleled beauty. California has it all. But, as great as it is, our state’s massive size ensures that, when we have problems, they are often enormously difficult to resolve. Enter California’s housing crisis and how to solve it. Or, perhaps, how not to solve it.

During 30 years in local government, I have repeatedly observed the state’s top-down mandate approach to solving problems. To be fair, there is always a process to creating new law, and cities have the opportunity to engage the process and affect outcomes for the benefit of their communities. And there are many legislators committed to finding the best solutions to problems. But, often, the process results in mandates without local government buy-in that intend to fix one problem but create countless others. It’s called the law of unintended consequences.

The New Reality

As of January 1, 2020, single-family residential zoning no longer actually exists in California. This is a result of the State passing a series of laws that force cities to allow, with rare exception, every property owner in a single-family zone to add one accessory dwelling unit (ADU) and to convert their garage into an additional ADU. This has the collective effect of increasing a typical suburban single-family neighborhood housing density from 8 units/acre to 24 units/acre. There is not enough space here to outline all the potential negative impacts to a neighborhood if all this new potential development were to occur. To name just a few: parking, traffic, emergency services.

No one knows whether these new laws will actually produce substantial new housing. Each owner can decide for themselves what’s right for their property. Not everyone will rush to build an ADU or convert a garage, nor does everyone have the financial capacity to do so. It’s not likely the building industry will be able to develop an efficient mass development model using these new rules, but there will likely be a niche market of commercial house flippers that will affect change on a modest scale. No doubt there will be some owners that add new units to their property, whether for the benefit of family use, or for rental income. Consequently, incremental change and likely degradation of the character of neighborhoods across California will now be a topic of discussion for decades to come. Because this is a State mandate, complaints to local city officials will be futile.

Having already virtually tripled the housing development potential of single-family zones across the state, and effectively neutered local officials control over such matters, many advocates and State officials think it’s not enough. Senate Bill 50 (SB50), authored by Senator Scott Weiner of San Francisco, would make fourplexes developable by right in single-family zones across much of the state. The Senator deserves credit for taking on a monumental challenge. And he has modified the latest version of the bill to attempt to address local government concerns. Respectfully, a different approach is worthy of consideration.

Overriding Local Control

Top-down decrees are prevalent because they are relatively easy to implement and can be effective. Engaging all affected parties to find solutions is very hard work. Here, we are talking about truly impactful changes to the way millions of people live in California. An incentive approach that maintains the spirit and reality of local control should be thoroughly evaluated and implemented.

There is a reason communities are resistant to increased density in their neighborhoods. Call it NIMBYism or whatever you want. Most who own their own home in a single-family neighborhood worked very hard and paid a lot of money to achieve the American Dream of homeownership. Upending their standard of living will definitely cause community conflicts. Any local government manager who has seen neighborhood resources stretched due to poor planning can tell you: neighborhood conflicts can lead to very serious and long-festering problems. 

Increased density does not have to be a negative. Countless examples exist of high-density residential developments having a positive impact on a community, if planned and implemented thoughtfully. Such planning requires local input. None of it will be easy, but communities that do development right can convince their constituents it’s in their best interest.

Cities all over are converting underperforming retail centers into mixed-use developments. This should be encouraged. Retail markets and systems are changing dramatically, which should provide opportunity to think differently. The State should provide incentives to help cities along. If city leaders know they can provide services to a growing community, they are more likely to consider creative solutions. Tax increment financing should definitely be on the table. As densities increase, property values will rise and cities that add to housing stock should be rewarded with permanent financing to cover the growing cost of services. Perhaps even modification to sales tax distribution should be considered. I’m not saying we have to change brick-and-mortar point of sales. But a modification to the distribution of County pools should be considered based on new residential growth and the fact that internet home delivery is changing the relationship of customer and retailer.

“Civic Duty”?

California’s housing challenges are very serious and not to be taken lightly. Cities and their residents must be part of the solution. Ideas are very powerful. In a recent Los Angeles Times article, former director of the California Department of Housing and Community Development Director Ben Metcalf referring to the magnitude of the problem was quoted in part as saying, “Your civic duty as a Californian is: you’ve gotta convert your garage.” That is an ominous statement. As one who takes civic duty very seriously, I have to ask if that is really the message the State and its leaders intend. I can be fined or jailed in some cases for not honoring my civic duty–not paying my taxes as an example. Might the future hold that I can be fined or jailed for not making my property available to strangers? Does that not make my property the State’s property?

We can approach California’s housing challenge better by working together.


About the author: Mike Egan is an accomplished local government executive with nearly 30 years of experience capped with 20 years of City Manager responsibilities in the cities of Bellflower and Norwalk. During his tenure as City Manager, he was active in regional governance and local government-affiliated groups. He is a Past President of the Gateway City Manager’s Group and former Chairman of the Gateway Cities Council of Governments City Manager’s Committee. He also served 18 years on the California Contract Cities Association’s Liability Trust Fund Oversight Committee and Claims Boards.