By Ann Duwe
May 14, 2024 Updated May 14, 2024
On April 22, the Los Angeles Superior Court ruled that Senate Bill 9 (SB9), a 2022 state law that abolished single-family zoning in California, is unconstitutional as applied to charter cities. At issue in the case was whether state law can override charter city control of land use. Also at issue was whether elimination of single-family zoning leads to housing affordability. The five cities that prevailed in the case – Redondo Beach, Carson, Torrance, Whittier and Del Mar – are to be congratulated for their courage in fighting for local control. Whether or how the case might affect general law cities like Los Altos and Los Altos Hills remains to be tested.
What is clear is that many of the 150 state housing laws enacted since 2017, together with the Regional Housing Needs Allocation (RHNA) system administered by the Department of Housing and Community Development (HCD), will not produce a large supply of housing for Bay Area residents with annual incomes below approximately $100,000.
HCD has had more than 50 years of experience with a system that relies on the profit from market rate and luxury housing to pay for a few below market-rate units. What the system has produced is a large number of luxury and market-rate housing units and very few low-cost units. In 50 years, the supply of expensive housing has not trickled down to become affordable to wage earners.
Cities don’t build housing, but they are required by HCD and by the tsunami of housing laws to create conditions favorable to developers. Typically, developers have been required to make 20% of large projects “affordable.” Lately the percentage has dropped to only 10%. Either way, “affordable” is a slippery term and is calculated by HCD as a percentage of the area median income. Santa Clara County’s median income is $181,300, so an “affordable” unit can be anywhere from 0 to 80% of $181,300. At 80%, a unit would require an income of $145,000; at 30%, a unit would require an income of $54,000. Such income levels are beyond what many people earn. Someone earning minimum wages of $16 per hour has a total annual income of only $32,000. As long as the supply of low-income housing is attached, like a barnacle, to profitable housing developments, the RHNA system will produce very little to no housing for those who need it most.
April’s victory returns a modicum of local control over zoning to five of the state’s 120 charter cities. When the judgement becomes final, it may extend to all charter cities. It is time for general law cities to sue to strike down the RHNA system. General law cities need to join forces to get out from under the impossible mandates of the RHNA numbers and the ruinous effects of legislation that purports to create affordable housing.
The cost of housing remains high due to economic factors over which neither cities nor HCD has control – scarcity and cost of skilled labor; cost of materials; cost of money; stagnant wages and income inequality. What’s needed is a whole new system for financing low-cost housing, or at the very least, a major revision of the RHNA system.
Duwe is a Los Altos Hills resident.