Controversial Solutions for California’s Housing Supply Crisis

By Brian Johnson
2021 President
Santa Barbara Association of Realtors

In 1916, Berkeley, largely considered California’s most progressive city today, enacted some of the first zoning ordinances that had the effect of segregating the wealthier populations of Berkeley away from the poorer ones. They restricted the construction of multifamily housing in residential neighborhoods. It treated apartment renters as second-class citizens. Restrictions like this spread throughout California and the rest of the country and made impacts that are still felt today. Recently, Berkeley joined Sacramento and other places outside of California like Minneapolis and Portland to end exclusionary zoning and eliminate the single-family housing designation for land.

Berkeley’s efforts aim to allow up to four units of construction on land that was previously restricted to single-family construction. Proponents of these types of measures say that it will do more to battle the housing supply crisis, reduce the cost of construction and address the disparities in housing affordability that have plagued communities for decades. Opponents say it will permanently alter the character of neighborhoods, lower property values and accelerate gentrification. Local arguments could give way to statewide and even nationwide concerns, however.

Recently, the Biden Administration released their $2 trillion infrastructure plan. Contained within the proposed legislation is a $5 billion plan that would incentivize local governments to alter their zoning laws to loosen single-family restrictions across much of their cities. The plan would allow cities to receive grants that would help pay for new schools, roads and bridges if they agreed to loosen zoning laws. Nothing in the bill would force a city to change their zoning rules. In California, an approach like this might not be enough. Critics of the legislation say that too many of California’s most exclusive enclaves have little need for Federal funds and would, therefore, have little incentive to change their exclusionary ways.

California’s State Legislature is considering new rules such as SB 9 that could achieve the same goals. The proposed State Senate bill would allow for duplexes on single-family zoned lots or even allowing lot splits without a hearing or approval from local governments. A lot of opposition for bills like this one come from local governments who are afraid of losing power. However, unless and until those same governments show they are willing to work towards more supply these bills will continue to be considered.

In the end, our State will continue to face a housing crisis unless we can truly get creative on solutions. The ideas mentioned above may not end up being the best way to achieve that goal but if we want to have more housing, especially more affordable housing, then increasing the supply of housing is the best way to proceed.

Brian Johnson is a California licensed real estate agent and the Managing Director of Radius Commercial Real Estate. Brian handles all types of commercial real estate transactions but has a special focus on multifamily investments. He can be reached at 805-879-9631 or bjohnson@radiusgroup.com

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