Latest News 2017 May California Legislation Could Streamline Home Development

California Legislation Could Streamline Home Development

In 1967, a California law was passed that required cities and counties to develop plans every 8 years for new housing. This was written to help create affordable housing on a regular basis. Even in 1967, one of California's most persistent problems was affordability due to lack of housing.

Unfortunately, there was one problem with the law:

Local governments aren't actually building anything.

Instead, what ended up happening was cities across the state would spend tens of thousands of dollars developing massive proposals (some of which take over a year to prepare) for housing developments few of them ever intended on building. During the period from 2006 to 2014, less than half of the new homes projected to be finished were built.

That's over 750,000 homes that California residents were promised but never got, just from one 8-year period. And that's only what was reported—many local governments don't even fulfill their reporting requirements to the state. The worst part is that lawmakers have known about the weaknesses of the housing proposal law for decades.

It doesn't help that 66% of coastal cities enact policies to limit residential development—policies that drive home prices up as much as 5% every time a policy is passed.

California Looks for a New Solution to an Old Problem

Senator Scott Wiener from San Francisco wants to change all that. He recently wrote legislation that would require cities and counties to remove obstacles that stop housing developments from being built. Essentially, it would create a smoother, easier road for contractors and real estate developers. His bill just passed the Senate and is being reviewed by the Assembly.

Economists and housing experts note that this law is not just for developers—the lack of new housing is part of what generates California's poverty rate, which is the highest in the nation. Experts estimate that the lack of housing, which directly contributes to high rent, puts a $100 billion burden on the state by keeping renters from affording anything else.

Stabilizing housing costs will require construction volume to double. That means an additional 100,000 homes a year.

Local governments believe this law takes away control over how to develop their communities. Many cities and counties have sought exemption from the law by counting student dorms and prison beds as low-income housing. Other city councils have deliberately made building homes too expensive for developers—thus limiting the number of apartments or condominiums.

While local governments and current residents may bemoan the idea of rapid development in the future, affordable housing is good for everyone—construction workers, real estate developers, homeowners, and renters. Lower housing costs mean more people can avoid homelessness, pour more dollars into the California economy, and create a more prosperous state.

Check out these articles from the Los Angeles Times for more information:

Categories: Real Estate