October 27, 2023

Rarely has California seen so concerted and unified a campaign by its elected officials as the drive for housing density conducted by Gov. Gavin Newsom and allied state legislators over the past five years.

All along, as legislators passed law after law easing the path to development of high-rise apartments and condominiums, there have been three major goals: One is to ease a housing shortage, another is to drive down the price of housing and a third seeks somehow to ease the obdurate problem of homelessness.

In the eyes of state officials, these things are linked. By creating new housing and easing the existing shortage, real estate prices and rents were supposed to come down, thus relieving pressure on many folks having trouble paying their rent and allowing them to avoid eviction and homelessness.

But three new reports make it clear this is not working. The more homeless who arrive in housing newly provided for them in many cities and counties, the higher the number of individuals living on the streets has risen. The more folks who migrate out of California, presumably vacating their previous homes, the more homeless numbers rise. And the greater the supply of housing, it’s now becoming apparent, the more it will cost to use it.

These improbable results are not only the result of folks like Anchorage Mayor Dave Bronson, who openly advocates sending his city’s homeless to cities with warmer climates, like Los Angeles and San Francisco, before the Alaskan winter hits in earnest. Bronson is transparent about this, unlike officials in Texas and Florida who have used state money to send busload upon busload of recently arrived immigrants to California cities.

But the number of Californians who now are housed but unable to buy homes far exceeds the unhoused populace.

The latest official count showed California with about 170,000 homeless on any given night, while the state’s Department of Housing and Community Development now estimates the housing shortage at 2.5 million units. Those government estimates of housing need have varied over the last five years between 1.8 million and 3.5 million, but fewer than 10 percent of any of thosd amounts have been built in any one year.

One reason may be that folks living in single-family residences have not seized upon the 2021 laws known as SB 9 and 10 to build either high-rise housing or dense apartment units on existing lots. Around the state, officials report only tepid results from those laws, which allow high-rises to be built on or near almost all “major transportation corridors” and give virtually automatic approval to construction of as many as six homes on almost all current single-family lots.

For cities that do not get new plans for dense housing approved by bureaucrats at HCD, a 2017 law known as SB35 (or the “builder’s remedy”) denies local governments and their constituents the right to protest almost any building plan that includes significant amounts of “affordable housing” that would be made available to buyers with incomes at 80 percent or below an area’s median level.

The UC Berkeley Terner Center for Housing Innovation reports this law has so far caused construction of 18,215 units, a drop in the bucket of what HCD claims is needed to satisfy demand.

Meanwhile, median home prices did not abate their rise. In Los Angeles County, prices are now up 30 percent over the last five years, according to a Zillow survey, with the median price just shy of $1 million. Several California cities have already crossed the million-dollar median mark (half the homes sold go for above and half sell for below that level), including San Jose, Santa Maria, Santa Cruz and San Francisco. The overall California median is second highest in America, behind only Hawaii, fueled only in part by inflation.

The Zillow average home value index for California was $743,361 at the end of June, about five times the level in West Virginia, the nation’s lowest at $155,773.

All of which demonstrates the need for far more conversions of vacant office, store and parking lot space to housing. An alternative would be to build far out into deserts and other ex-urban areas, a tactic that could contribute to climate change as it would force ever longer commutes for those who still work in offices.