RIP 50 (for now)

Unfortunately for most California residents, SB50, a bill that would have prioritized new housing development near job centers and high quality public transit–but was contingent upon providing higher levels of affordable housing–died last month in the state senate. There were two “groups” that were vocally opposed to the bill: folks who are generally against new development, but hide behind the argument of “local control”; and then there were affordable housing advocates, for who the bill did not go far enough in stopping displacement, or provide enough on site low income housing to warrant the “subsidy” of SB50.

Now for the sake of brevity, and practicality, I will largely ignore the first group. Both because the outcome is the same either way: explicit endorsement of the status quo of housing un-affordability as being ok, and because their arguments can at least be treated as rational economic self-interest, which for at least being a rational basis for political decisions, is still somewhat respectable. You got yours, why even flirt with the idea of your home going down in value if you can “locally control” the problem away?

But for the latter group, the one that supposedly cares about economic equity and whose biggest gripe about the bill was “not enough affordable housing” to justify the large subsidy given to developers by SB50, I’m a little flabbergasted. Does SB50 give a lot to get a lot? Sure, waiving parking and height requirements, and getting more units per acre than local zoning is a big giveaway. Hell it practically shifts the entire approval burden to by-right state zoning in urban areas. BUT THAT’S THE POINT. The locals aren’t getting it done, and we needed millions of new housing units 10 years ago–big changes in the substance and process of the law require big economic windfalls! People aren’t going to start new construction and development companies, raise hundreds of millions (actually most likely billions now), and go through the multi-year development process unless they are properly motivated to take those risks!!

I mean come on, we are still in the middle of the biggest California construction boom in my lifetime, a time when your hard building costs alone are going up 10 percent, per year(!), for 6 straight years(!!), and you expect to address our housing shortfall with incremental progress and marginal incentives!?! Marginal incentives don’t even cover the interest on a construction loan. If you want to reshape an entire industry around sustainable urban infill development (AWAY FROM SINGLE FAMILY HOMES) then you need big, whopping carrots of policy giveaways, otherwise there is no reason to do something different.

Here’s where your argument falls apart, because SB50 was never going to be perfect, and no housing bill in California ever will be. But housing developers, both for profit and nonprofit, are remarkably predictable economic actors. You want them to build X? Write a general plan and zoning code that get you a reasonable (and competitive) return on investment for X. Now make the process easy to plan for and navigate. Boom, in a couple years time X, whatever it actually is, will pretty much just magically appear. Except it’s not magic, it’s how everything else in the entire state was built!! So just get it together and tell us what X is!!! I thought dense housing near transit and job centers, with higher rates of affordable housing locked in, combined with anti-displacement was X, but apparently the status quo is sooooo much better. Now we get to wait for another entire legislative cycle before something else even remotely resembling SB50 comes around, and it also won’t be perfect, and will be too late, and has to overcome local control folks, and the lack of public funding for affordable housing, and so on and so forth.

But hey, at least you stuck it to those greedy developers. They still have more work than they can currently service, with the highest returns they’ve ever seen, and it’s definitely not X.