Props 1, 2 Will Fail to Mitigate State Housing Crisis

Housing apartmentIt’s been two and a half years since Gov. Jerry Brown jolted the debate on California’s housing crisis by saying much more private-sector construction was the only realistic way to address the crisis, not the old Democratic recipe of building a relative handful of subsidized housing units that help a small percentage of those in need. “We’ve got to bring down the cost structure of housing and not just find ways to subsidize it,” he said in January 2017 in criticizing previous state policies.

Brown sought to make it much easier for home-builders to clear regulatory hurdles. In September 2017, Senate Bill 35 by Sen. Scott Weiner, D-San Francisco – which reflected the governor’s priorities – was enacted. It holds that cities could not put up new obstacles to projects with proper zoning so long as they contained at least 20 percent of units at lower price levels.

And in the last two months, Brown has signed a series of new housing measures with similar goals – most notablyAssembly Bill 2923, which will make it much easier for the Bay Area Rapid Transit authority to follow through with its plan to build 20,000 new housing units by 2040 on 250 acres BART owns nears its transit stations.

Legislature renews emphasis on subsidized housing

But when it comes to Tuesday’s election and major housing initiatives, it’s back to the old Democratic playbook. Both the key measures meant to increase housing – placed directly on the ballot by votes of the Legislature – involve government-subsidized construction.

Proposition 1 authorizes the issuance of $4 billion in general obligation bonds. The biggest chunk – $1.8 billion – would go toward building apartment-type residences. $1 billion would go to loans to veterans. Both infrastructure and homeownership programs would receive $450 million each. And $300 million would go to build housing for farm workers.

The official state voting guide’s analysis estimates that this will create access to housing for 55,500 families.

Proposition 2 would allow the state to divert funds from 2004’s Measure 63 – which generates about $2 billion a year for mental health programs from an income tax surcharge on the very wealthy – to pay back over 30 years up to $2 billion in bonds to build housing for the homeless and those at risk of being homeless.

The official state voting guide’s analysis doesn’t estimate how many people would gain housing as a result. But based on Proposition 1’s estimate that $1.8 billion could create about 30,000 apartment units, $2 billion should be able to provide around 33,000 units.

Bonds would fund 88,500 units; 2 million needed

The combined net effects of the two measures: providing housing to about 88,500 families over the life of the two bond measures in a state that a 2016 McKinsey consulting group report said has a shortage of 2 million housing units.

The small increases in housing that Proposition 1 and 2 would create are consistent with the criticisms that have been made of California’s state housing policies since at least 2003. That’s when the Public Policy Institute of California released a report that said affordable housing programs focused much more on establishing a process for such housing than on actual results. It said it was “unrealistic” to think such an approach could have a significant effect in increasing affordable housing.

No recent polling has been done on Propositions 1 and 2, but they’re widely expected to pass easily. That’s in keeping with the record of bonds placed directly on the ballot by the Legislature.

This article was originally published by CalWatchdog.com

How to NOT Solve California’s Housing Crisis

house-constructionThere are obvious reasons the median home price in California is $544,900, whereas in the United States it is only $220,100. In California, demand exceeds supply. And supply is constrained because of unwarranted environmental laws such as SB 375 that have made it nearly impossible to build housing outside the “urban service boundary.” These laws have made the value of land inside existing urban areas artificially expensive. Very expensive. Other overreaching environmentalist laws such as CEQA have made it nearly impossible to build housing anywhere.

Then there are the government fees attendant to construction, along with the ubiquitous and lengthy permitting delays caused by myriad, indifferent bureaucracies with overlapping and often conflicting requirements. There is a separate fee and a separate permit seemingly for everything: planning, building, impact, schools, parks, transportation, capital improvement, housing, etc. Government fees per home in California often are well over $100,000; in the City of Fremont in 2017, they totaled nearly $160,000 on the $850,000 median value of a single family home.

This is a shakedown. It has caused a politically engineered housing shortage in California that enriches billionaire property developers that have the financial strength to withstand decades of delays and millions in fees, because they reap the extreme profits when they sell these homes at inflated prices. Also enriched are the public servants whose pay and pensions depend on all taxes – definitely including property taxes – and all fees being as stratospheric as humanly possible. Public employee pension funds also benefit from housing scarcity, as their real estate investment valuations soar into bubbleland.

When litigious environmentalists, insatiable public sector unions, and an elitist handful of left-wing oligarchs control a state, artificial scarcity is the consequence. Welcome to California.

REJECTED POLICY – REAL SOLUTIONS TO THE HOUSING CRISIS

To decisively solve California’s housing shortage, some of California’s more than 25,000 square miles of rangeland, currently occupied by cattle, would have to be approved for suburban development. California is only 5 percent urbanized, although if you listen to environmentalists, you might get the impression it only had 5 percent remaining open space. You could fit ten million people onto half acre lots in four person households and you would only use up 2,000 square miles – that’s only 1.1 percent of California’s land area. Why aren’t massive new housing developments spreading out along California’s 101, I-5 and 99 corridors?

Real solutions to California’s housing crisis would also require increasing the capacity of California’s water infrastructure and transportation infrastructure. In both cases, investment would be cheaper if this expansion was done on raw land. Real solutions to California’s housing crisis would mean rescinding the mandatory rooftop solar requirement on new home construction, and instead recommissioning and expanding the nuclear power complexes at Diablo Canyon and San Onofre, and embracing development of additional nuclear power and natural gas power plants. In a less confiscatory regulatory environment, the private sector could fund all of this while lowering costs to consumers.

Reforming environmental restrictions and unleashing private sector development of homes and infrastructure is the fastest, easiest way for home prices in California to return to near the national average. In turn, that would solve nearly every problem associated with a shortage of housing. California’s families would be able to afford to buy homes, or pay affordable rent. California’s employers, most definitely including government agencies, would be able to attract workers at prices that would not break their profits or their budgets, which would benefit the economy. And far fewer people would be rendered homeless.

APPROVED POLICY – COMPLETELY USELESS “SOLUTIONS” TO THE HOUSING CRISIS

As long as environmentalist litigators, public sector unions, and left-wing oligarchs run California, none of these real solutions will ever happen. What are they proposing instead?

To summarize, all politically viable housing solutions in California involve densification, i.e., cramming ten million more people into existing urban areas, and, predictably, more taxes, bonds, fees, subsidies and government programs.

Rent Control, Government Subsidized “Affordable Housing” and Government Funded Homeless Shelters

California is the epicenter of America’s “progressive” power structure. In California, in addition to controlling the public bureaucracy through their unions, progressive ideologues control the press, social media, search media, K-12 public education, academia, most corporations, the entertainment industry, and virtually all serious political campaign spending. As a result, California’s progressives can use ballot initiatives to con a brainwashed populace into approving their latest housing policy agenda. The common thread? Government control; government funding. For example, on the ballot this November are propositions to permit cities and counties to enact rent control, issue state bonds totaling $4 billion to build “affordable housing,” and use state tax revenues to build more government-run homeless shelters. It is possible all three of these measures will pass.

Already in progress is the implementation of California state laws that took effect Jan. 1 – AB 2299 and SB 1069 – which amend existing state laws governing “accessory dwelling units.” These new laws force California’s counties to streamline the process whereby homeowners can construct additional homes in their backyards. Does that sound good? Not so fast.

Doubling Suburban Population Densities ala Government Subsidized “Accessory Dwelling Units”

There’s a reason people work hard for decades to pay off their mortgages so they can own homes in spacious suburbs. It’s because they value the leafy, semi-rural atmosphere of an uncrowded suburban neighborhood. AB 2299 and SB 1069 will effectively double the housing density in these neighborhoods, violating the expectations of everyone living there who relied on the zoning rules that were in effect when they bought their homes.

If zoning laws in existing suburbs were relaxed at the same time as zoning restrictions were lifted on the urban periphery, the impact of these new rules might be mitigated. But every policy California’s elite and enlightened geniuses come up with is designed to maintain “urban containment.” And to add to the disruption these laws will inflict on quiet neighborhoods, California’s cities – starting with Los Angeles – are providing subsidies to homeowners to build these homes, then encouraging them to rent the properties to low income families wherein the government will pay the rent via Section 8 vouchers.

This is an expensive, utopian scheme that oozes with compassion but is fraught with problems. Doubling the density of suburbs is already problematic. But doubling the density of suburbs by subsidizing the settlement of people on government assistance into every backyard, invites social friction. It is forcible integration of people who, for whatever reason, require government assistance to support themselves, into communities of taxpayers, who, by and large, are working extra hard to pay the mortgages on overpriced homes in order to provide their children with safe neighborhoods.

As usual, when it comes to enlightening the public, neither the media, nor the urban planning experts in academia, ever offer much beyond pro-densification propaganda. A glowing New York Times article, entitled “A Novel Solution for the Homeless: House Them in Backyards,” raves about this entire scheme, already being tried in Los Angeles, Portland and Seattle. The article includes a quote from Vinit Mukhija, a professor of urban planning at UCLA, who says: “The value [of subsidized accessory dwelling units] goes beyond that, though, because it is finally somewhat of a departure of the purity of single-family housing in the region. It’s a good step to change what people here really consider a dogma of private housing.”

The “dogma of private housing.” That epitomizes California’s elitist hostility towards ordinary families owning detached homes with spacious yards.

The incentives created by such a project are perverse. California’s elite has made homes unaffordable. Then, to the people who sacrificed so much to buy these homes despite their punitively high prices, the government offers them subsidies and Section 8 payments, if they are willing subdivide their lots and turn over half their property to people supported by the government. Inevitably, many financially struggling homeowners will be forced to accept this cruel bargain if they want to keep their homes.

Finally, just like in 2008, there will eventually be another economic downturn, when many distressed homeowners will be forced to sell their properties. And when that happens, just like in 2008, investment banking speculators will move in and buy homes by the thousands. This next time, however, these institutional investors will be salivating at the prospect of collecting government subsidies so they can operate two rental units on a single piece of property.

Demolishing Homes to Build High Rises Near Transit Stations

Another way California’s elites – many of whom live in gated communities with homeowner covenants prohibiting nasty things like accessory dwelling units in backyards – propose to solve California’s housing crisis is to force demolition of single family dwellings in the vicinity of mass transit stations. They support this mass destruction of vintage neighborhoods in order to make room for high density apartments and condominiums up to five stories in height. While an attempt in 2018 to enact this draconian solution was beaten back, California’s coercive utopian lawmakers will bring it back in 2019. Some form of this law is likely to pass.

There’s nothing wrong with gradually increasing the population density in the core of large cities. That is a natural and organic process. But it is the job of legislators and local officials to moderate that process, protecting established neighborhoods. Instead, again, the policy consensus in California is to cram ten million new residents into existing urban areas.

Government Subsidized Homeless Shelters on some of the Most Expensive Real Estate on Earth

Perhaps the most misguided housing policies coming out of California concern the homeless. Despite years of bloviating by the compassionate elite, almost no good data is available on homeless populations, much less any good policies. Press coverage of the homeless centers on the family unit; small children, parents forced out of their home by high rents. These are gut wrenching stories. But accompanying the legitimate cases of families or individuals coping with undeserved hardship, there are the willfully indigent, along with criminals, drug dealers, sexual predators and perverts. Again, the City of Los Angeles offers a striking example of bad policy.

In Venice Beach, which is within Los Angeles city limits, along one of the most expensive, touristy stretches of coastline in the world, there are now permanent homeless encampments. To address the challenge, Los Angeles city officials are fast-tracking the permit process to build a homeless shelter on 3.2 acres of vacant city-owned property less than 500 feet from the beach. This property, nestled in the heart of Venice’s upscale residential and retail neighborhoods, if commercially developed, would be worth well over $200 million. Imagine what could be done with that much money if the goal was to truly help the homeless. And by the way, the proposed shelter will be a so-called “wet” shelter, meaning that drugs and alcohol will not be permitted inside the shelter, but intoxicated homeless individuals will be allowed inside. Go in, get a bed, go out, shoot up, come back in.

That a solution so scandalously inefficient could even be considered by the do-gooders running City Hall in Los Angeles offers additional insights into the minds of California’s progressive elite. Solving the homeless crisis isn’t their goal here. Rather the intent is to create additional government-owned properties, hire additional government bureaucrats, while preening in front of television cameras and pretending to solve a problem. Should the Venice Beach property be developed as currently proposed, well connected construction contractors will rake in government funds, so eventually “up to 100” homeless people will find shelter. Meanwhile, thousands will remain outdoors.

California’s housing is unaffordable because of restrictive laws such as CEQAAB 32SB 375, and countless others at both the state and local level. At the same time, California’s political elites are are inviting in the world’s poor en masse to come and live here. An estimated 2.6 million illegal aliens currently live in California. But the rhetorically unassailable compassion expressed by these sanctuary policies does nothing to alleviate hardship in the nations where these refugees originate, because for every thousand who arrive, millions are left behind.

The result? While California’s visionary rulers engineer a shortage of housing supplies, their welcoming sanctuary policies engineer a burgeoning housing demand. This is the deeply flawed agenda they have implemented in California and are actively exporting to the rest of America.

The biggest lie of all is the compassionate overlay that informs every housing solution California’s elite promote. Because their solutions, however viable they may be politically, will not work. They defy basic economic sense. They create additional drain on public funds while doing nothing to alleviate the high prices that are caused by scarcity. They are sustained by an impossible assumption, that urban densification, and all the destruction that densification will bring, will in itself be sufficient to restore a supply and demand equilibrium for housing. And they reject the obvious solution, suburban expansion to complement higher densities in the urban cores, based on environmentalist objections that are overwrought. In practice, the solutions being implemented to resolve California’s housing crisis are not compassionate. They are cruel.

Eventually, enough Californians are going to realize they’ve been conned. They will recognize that government subsidized densification is financially unsustainable and ruinous to their way of life. They will support politicians who are willing to stand up to environmentalist litigators, government unions, and the left-wing oligarchy that profits from scarcity. Hopefully that will happen before it’s too late.

Proposition 10 Would Only Inflame California Housing Crisis

house-constructionThis November, Californians will see several taxpayer threats on the ballot, not the least of which is Proposition 10, titled “Local Rent Control Initiative.” This measure would open the floodgates to big government bureaucracies, burdensome regulations and a loss of property rights. The word must be getting out, because a poll released last week by the Public Policy Institute of California shows Proposition 10 lagging.

Proposition 10 would repeal the 1995 Costa-Hawkins Rental Housing Act, a law that was enacted after a compromise was worked out between dozens of different interest groups. Costa-Hawkins stopped local governments in California from enacting a hodge-podge of different rent control laws, each with its own big bureaucracy. The law prohibited rent control on newly constructed buildings, single-family homes and condominium units. It also guaranteed the owners of existing rent-controlled buildings the right to raise the rent on a unit to market value for new tenants when the former tenants moved out.

Proposition 10 would allow cities to enact any type of new rent-control law. New bureaucracies could impose new rules, fees and price controls on old buildings, new buildings, small buildings, garage apartments, granny flats and even single-family homes and condos. Proposition 10 would make California’s well-documented housing crisis even worse by discouraging investment in rental housing and incentivizing conversions or even demolition of existing rental property.

The nonpartisan Legislative Analyst’s Office warns this measure could hurt California taxpayers, predicting a loss of hundreds of millions of dollars in state tax revenue. That would mean less money for schools, roads and emergency services. …

To read the entire column, please click here.

UC Berkeley professor blames rent control for California’s housing crisis

UC BerkeleyKenneth Rosen, a UC Berkeley economist and real estate consultant, published a paper Wednesday titled The Case For Preserving Costa Hawkins, in hopes of swaying voters against Proposition 10.

Proposition 10, which will go before voters in November, would repeal the 1995 Costa-Hawkins Act, a state law that severely curtails rent control in California cities. For example, under Costa-Hawkins, only San Francisco apartments built before 1979 may be subject to rent control.

Passing Proposition 10 would not in and of itself create any new rent control housing, but it would allow cities to expand rent control stock for the first time in decades if they so choose.

Rosen, however, argues that turning the clock back to 1994 will stifle new housing and drain apartment stock. …

Click here to read the full article from SF Curbed

Tech Oligarchs and the California Housing Crisis

Silicon ValleyLet them pay.

Silicon Valley tech oligarchs are concerned about housing in California.

Let them pay.

Housing prices in the areas of their shiny new tech campuses are skyrocketing to unaffordability for many of the longer term residents and are raising the price of housing for their employees.  As the pro-developer LA Times had to admit, “The housing crunch, particularly acute in Bay Area cities such as San Francisco and San Jose, is a problem that the tech industry helped create by attracting well-paid new workers who can outbid longtime residents.”

So let them pay.

The tech oligarchs are not interested in rent control or rent stabilization ordinances to protect the longtime residents.  They’re not funding efforts to repeal the Costa Hawkins and Ellis Acts, which restrict the ability of cities to rent-stabilize apartments.  They want the housing crisis to be solved by taking zoning control away from cities and by allowing developers to run riot without any municipal controls, under the misguided notion that by building enough luxury housing, affordability will “trickle-down” to the peons.

And so the tech oligarchs are funding “Yimby” (“Yes in my back yard”) pro-developer groups which support Sacramento-mandated levels of density, engineered to maximize profits, overriding the individually crafted General Plans of distinctive communities throughout the state.  Those who see through the true nature of these AstroTurf groups have perceptively tweaked “Yimby” to “Wimby” (“Wall St. in my back yard”).  Not surprisingly, these tech oligarchs and their Wimby/Yimby puppets are the loudest voices in support of Sen. Scott Wiener’s SB827, which would allow indiscriminate densification throughout the state, using “mass transit” as an alibi.  (“Mass transit” as defined by Wiener is a bus four times an hour during rush hour.)

One of the tech CEO’s who is a major donor to one of Yimby groups recently said, “Technology companies have such insane margins that they’re one of the few sectors that can continue to be viable in this environment.”

Of course, tech employees outbidding existing residents, who are priced out of the market, is a major cause of displacement.  Despite some cosmetic changes to the bill as an afterthought to blunt criticism, SB827 cannot avoid all the impacts of gentrification and displacement in its mission to address the needs and desires of the tech oligarchs.

Let them pay.

While one might expect Ayn Rand toting, latte quaffing tech masters-of-the-universe to thumb their noses at concepts like “Community” and “Livability,” especially if they stand in the way of their G-d given rights to profiteer, this position is not as easy to reconcile with the self-styled persona of Sen. Scott Wiener, representing some of the most liberal parts of San Francisco.  It’s downright odd that someone who by rights should be thumbing his nose at the 1% (or in this case, the 1% of the 1%) is freely regurgitating Reaganomic trickle-down talking points; but Wiener, whose largest donor base comes from developers and the real estate lobby, seems to be going the extra mile in making a fair bid to be known as Sacramento’s patron saint of crony capitalism.

Wiener and his cabal of self-styled progressives act as if the “law of supply and demand” is not a variable and disputable economic or sociological principle – or as if induced demand doesn’t exist in a flexible market – but is some kind of immutable natural law, which would put Newton and Kepler to shame.  To have those closer to Marx suddenly embracing Mundell and Laffer is the kind of cognitive dissonance which ordinarily causes heads to explode, and, quite frankly, I’m not sure that hasn’t been the case here.

And yet, considering the tech corporations’ “insane margins” and considering Sen. Wiener’s proven lack of squeamishness when it comes to taxing ordinary Californians (gas tax, anyone?), he should have no problem looking to corporations for major funding to solve the housing crisis which they, in no small part, helped to create.

But then again, the key phrase about Sen. Wiener’s lack of squeamishness when it comes to imposing taxes seems to be “ordinary Californians.”  He has demonstrated he doesn’t have a problem with that, but taxing the “insane margins” of the tech corporations is probably not regressive enough for him.  Ordinary Californians simply can’t spread money around Sacramento the way the oligarchs can.  So when Wiener says, “It’s about damn time that the tech sector started to engage in housing policy,” it sounds perforce like he’s looking towards future campaign donations rather than actual housing solutions.

It also looks like Wiener is less concerned with the implications of increasing income inequality, which plays a major role in the housing crisis.  Rather than try to deal with the problem of income inequality which the tech oligarchs are creating, Wiener and his Yimby cronies attempt to deal with a symptom of income inequality instead of its actual cause.  Let’s tackle housing, not the income inequality creating the housing crisis; and let’s put a target on single-family housing, which can generate untold profits if we upzone it, by labelling it as “racist.”

One would hope that Wiener, whatever wing of whatever party he belongs to, would be interested in dealing with the issue of income inequality, but this is the same guy who said: “I could care less how much money developers make.”  Of course not.  Should we really be surprised that the by-right upzoning of his bill represents one of the single largest wealth transfers from the public to the private sector in California history?  Should we be shocked that Wiener and his self-righteous cronies are doing nothing to address the growing income disparity of ordinary Californians with the tech oligarchs and their “insane margins”?  Is it really surprising that he won’t even begin to think about how all that money he is gifting to developers could be used to help build subsidized affordable housing, for example?

Let the developers pay, too.

One of the many built in fallacies and policy errors within SB827 is its attempt to use mass transit as an alibi to densify.  Public transportation should serve the needs of urban planning, not the other way around.  If Wiener wants to look for causes of the housing crisis to fix, then he should – as the LA Times did – draw the nexus between massive job creation and increased housing demands.  And policy should be determined accordingly.

Consequently, in addition to doing a better job taxing the “insane margins” of tech companies, no massive projects should be approved under CEQA until and unless a concurrent solution for the accompanying housing impacts are dealt with.  This would mean eliminating statements of “overriding considerations” which allow agencies to effectively not have to deal with housing impacts.  It would also mean that the tech corporations would be asked to step up and take responsibility for the problems they are creating, as they create them.

Let them pay.

If, as a result, tech companies threaten to move to Merced or Modesto or Fresno or Victorville – or out of state, for that matter – let them. Economic justice demands not caving to all the demands of the corporate oligarchs.  Economic development needs to be spread throughout the state and throughout the country and encouraging economic development in struggling areas is a good thing.  If the jobs magnet is creating the housing crisis, then part of the solution should lie in job creation in areas in which housing is abundant and affordable.  Instead of trying to cram everyone into a few megalopolises, while the tech oligarchs live in their dachas on massive landed estates, we should literally be working to spread the wealth and share in the “insane margins.”  As much as I love California, I’d also love to see new life breathed into Detroit and other rust belt cities, for example.

At some point we’re also going to have to consider the ultimate implications of the spirals of growth that Wiener and the oligarchs are assuming should be the natural state of things.  Now is as good a time as ever.  The notion of never-ending growth is the very definition of unsustainability.

My guess is that not bending over backwards to kiss the collective tochuses of the oligarchs would be bad for the collective treasuries of the reelection campaigns of a good number of Sacramento politicians, but standing up to the tech corporations and demanding a fair share of their “insane margins” is good policy which would actually make a difference in providing real solutions to our state’s housing crisis.  This is just another reason why we need to embrace the principles of subsidiarity and devolve power from the special interest puppets in Sacramento.

Additional measures to solve the housing crisis include:

  • Repealing the Costa-Hawkins and Ellis Acts, thereby untying cities’ hands and allowing them to implement more effective rent stabilization measures.
  • Bringing back redevelopment agencies, which Sacramento abolished in a massive money-grab, in order to focus on creating affordable housing.
  • Giving cities more leverage in negotiating with corporations for fair-share public benefits, including housing.
  • Empowering cities and local agencies through subsidies to create more subsidized affordable housing; solving the pension crisis (as well as wasteful Sacramento spending) and devoting the resources created in the process to housing.
  • Acknowledging that top-down, one-size-fits-all mandates are not suitable for a state as diverse and wide-ranging as California, instead encouraging regional cooperation and individualized solutions which respect the unique DNAs of California’s diverse communities.

The tech oligarchs’ dystopian vision has been brilliantly exposed by urban scholar Joel Kotkin, who has discussed the implications of densified urban living for workers and plebeians, who are regarded by the tech corporations and the politicians who serve them at best as modern-day serfs.  In attempting to deny the importance of quality-of-life issues (except for themselves) or any concept of living in a community with real community character (because they are believers in profit über alles), the oligarchs and their politicians are dehumanizing the very people they are supposed to serve and who have made them rich.  To them we are only widgets, stats or marks.

Let them pay.

Even if they’re not so good at logic or policy, Yimby groups seem to be talented at chanting.

So here’s a new one for them.  In the spirit of the classic scene in “The Bad News Bears in Breaking Training,” the Yimbys who are truly interested in real housing solutions might want to consider a new chant, directed at the developers, the tech corporations and their “insane margins”: “Let them pay!  Let them pay!  Let them pay!”

ice-mayor of Beverly Hills

Who’s Really to Blame for Orange County’s Housing Affordability Crisis?

house-constructionThis past week, three separate media outlets sought my comment on Orange County’s housing affordability crisis and high-cost of living. The inquiries came on the heels of a host of news stories chronicling sky-high rents, the dismantling of homeless encampments in Anaheim, and the adequacy of wages paid by the county’s largest employers.

These were the questions news folks wanted answered: What is business doing to get more homes built? What is business doing to eliminate poverty? What is business doing to end homelessness?

Let’s get real.

Do we face a growing housing affordability and cost-of-living crisis here in Orange County and throughout California? You bet. Hardworking residents are struggling to make ends meet, and housing costs stand at the center of their paycheck-to-paycheck existence. Orange County Business Council has been arguing this for years and objective data backs it up.

A recent USC Gasden Family Forecast shows the average rent for a two-bedroom apartment in Orange County at a whopping $1,813 a month. For the typical renter, that’s a number that swipes more than half of their monthly take-home pay.

But the problem isn’t a lack of quality jobs or even skimpy paychecks. The problem is a lot of workers in a strong economy chasing too few available homes or apartments. That drives up housing costs and takes more of their paycheck.

Indeed, OCBC’s own Housing Scorecard reports that Orange County needs 65,000 more homes today to meet the housing needs of the people who already live and work here. But get this: Orange County has added only one new home for every 5.26 residents since 2010. And it’s not just Orange County that’s falling down on the job. Anaheim reportedly approved only 8 percent of its low-income housing needs, for example.

The crisis statewide is even more pronounced. A recent report found that more than 500 counties and cities failed to meet their mandated housing goals. So it’s no wonder that California has a housing shortage exceeding 3.5 million homes. That’s what you get when your population has increased every year since 1950, but you’ve failed every year since 1989 to build enough homes to meet the need.

So who’s to blame?

Homebuilders — in an industry that has fueled California’s economy for more than half a century — are as eager as ever to build the American Dream in the Golden State. But here’s the problem: lawmakers, regulators, local governments and anti-development activists — who already own their own home — won’t let them.

Overly restrictive land-use regulations, abuses of California’s environmental laws, local ballot box initiatives that neuter good planning, and city councils that won’t say “yes” are fueling the bottleneck in new-home delivery. Sure, some recent, minor actions were taken by the state legislature to streamline approvals, but ultimately local political leadership controls land use and housing decisions.

The systemic flaws that eat away at the paychecks of Orange County residents and threaten California’s economic prosperity are not caused by business but by the folks you elect to serve you in public office. The role of business is to offer goods and services, and thus create jobs, not to act as a substitute for local government or its elected officials who benefit from the significant tax revenue generated by business.

So here are the questions that need to be asked: What are your elected leaders doing to see that a good supply of affordable housing is built? What are your elected leaders doing to assure the end of homelessness in your community? What are your elected leaders doing to help grow good middle class jobs?

If you don’t like the answers, vote them out.

resident and CEO of the Orange County Business Council

Originally published in the Orange County Register.

Housing crisis causes legislative avalanche: 130 bills proposed in Sacramento

As reported by the San Jose Mercury News:

Home prices keep rising to shocking levels around the Bay Area, while rents remain out of sight. Now, state lawmakers in Sacramento are responding with a torrent of proposals.

Legislators have introduced about 130 bills to address what has become a statewide housing crisis. The sheer quantity “is unprecedented,” said Jason Rhine, legislative representative for the League of California Cities.

“I don’t think anyone can recall a time when we’ve had this many bills on housing — or on any one thing, period,” he said.

The legislative avalanche — bills to mitigate affordability concerns, boost housing production and protect tenants — demonstrates that the “crisis has reached its head,” said Assemblyman David Chiu (D-San Francisco). …

Click here to read the full article