Too often, California and its localities adopt and maintain community development policies that deprive the state’s hard-pressed middle class of appropriate housing opportunities.  Hundreds of thousands of hard-working families and individuals cannot afford to live where they work and are facing a housing cost burden, defined as paying more than 30% or more of their income on housing. Increases in housing production costs push these hard-working individuals further from housing affordability and creates the “missing middle” housing gap.

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In its broadest sense, Inclusionary Zoning (IZ) requires housing developers to sell or rent a percentage of their units below market rate. The jury is still out as to whether inclusionary zoning policies actually work in practice.  It is extremely difficult to adequately offset the IZ financial burden with equal benefits to homebuilders. If a municipality imposes inclusionary zoning costs on housing that are not sufficiently offset, the rate of new homebuilding will ultimately decrease. Lack of new construction results in increased competition for homes, chokes off housing choices, inflates prices, and overall results in reduced affordability.

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As the building industry struggles to meet our population’s housing needs, the lack of adequate residential development sites has stymied housing production efforts and increased development process time, costs and uncertainty as developers are forced to pursue zone and plan amendment changes to accommodate housing. To meet the projected need for housing, we will need to build hundreds of thousands of units to accommodate all income levels and we need more zoning opportunities  for creative housing options.

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California is experiencing an unprecedented housing crisis. Skyrocketing costs are crushing California families, who are finding it harder and harder to find a safe, affordable place to live. Unfortunately, many people feel that rent control is the best solution to this crisis.  However, rent control is a flawed approach that would only make our current housing crisis worse. It would lead to less affordable housing being built, create incentives for current landlords to take existing rental properties off the market, and make it harder for those looking for affordable housing.

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Affordable housing developers already face mountainous challenges to ensure project delivery, including increased construction costs, a decrease in subsidized financing, decrease in tax credit pricing, a lack of available land, and community opposition. Piling on additional costly and unnecessary requirements increase the amount of government funding needed, which in turn limits the number of affordable units created with limited funding.  In addition, these added costs can kill even a well-designed and well-planned project that would be valuable to the community.

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Utilities should partner with local municipal agencies/departments and the building industry to find solutions that help overcome the issues of delay to help bring housing units online with fewer delays. It will also add certainty to the process, therefore reducing costs to provide housing, and ultimately encouraging additional investment in residential projects.

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Legislative and regulatory efforts to combat climate change are a major priority for political leadership both locally and statewide. Governor Newsom has promised to establish California as the leader in the fight against climate change.  It should be noted that even though California is the fifth largest economy in the world, the state emits less than 1% of global greenhouse gases (GHG).  In contrast, California ranks top in the United States for poverty and homelessness – both of which are largely attributable to the housing supply shortage and sky-high housing prices that are nearly 3 times above the national average. Balancing climate change efforts should not negatively impact housing needs.

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The California Environmental Quality Act (CEQA) was established under Governor Reagan in 1970 to disclose significant environmental impacts created by development projects so policy makers can make informed decisions. Unfortunately, what began as a well-intentioned law to protect the environment has been used by many, including labor unions and no-growth advocates, as a tool to delay and block construction, especially housing. This has severely hampered the entire development process by adding expense and delay, thus contributing to the housing crisis we are experiencing today.

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