California lawmakers block transit-oriented housing density bill

By Deborah Goonan, Independent American Communities

California’s controversial Senate Bill 50 has been tabled until 2020. The bill was killed when Sen. Anthony Portantino (D), chairman of the Senate Appropriations Committee, announced that it would not be discussed in committee this legislative session session.

Portantino reportedly opposed SB 50, because its policies would override local government zoning rules. Many neighborhoods in California zone entire neighborhoods for single family homes only.

For analysis of the pros and cons of SB 50, see earlier IAC post:

Could state law override single-family zoning in California?

 

Political trend against high density housing

The death of SB 50 presents more evidence that Californians (and other Americans) don’t believe that cramming new residential construction into crowded cities makes housing more affordable.

There’s plenty of evidence to suggest that increasing housing density often creates the exact opposite effect: higher land value, higher construction costs, and, in the end, higher rents.

It’s one thing to allow property owners to divide spacious single family homes into 2 to 4 rental housing units. It’s quite another to redevelop entire city blocks as four or five story apartment buildings.

And voters in highly desirable, economically stable single family neighborhoods don’t want their block transformed into a short-term rental resort.

 

Few benefit from high density

Real estate builders and investors benefit from new construction of apartments and condos for commercial profit. But most newer multifamily housing doesn’t meet the needs of lower and middle income housing consumers.

For many, the rent in a new apartment is too darn high, and the space uncomfortably small. Rapidly rising condo fees quickly outpace annual income growth, forcing owners to sell or raise rents to cover operating costs.

Proponents of high-density residential construction want consumers to believe that housing is scarce. But, in fact, most cities and counties collect property taxes on thousands of luxury condos, apartments, and homes that aren’t serving as a primary residence to anyone.

 

Lots of real estate, not enough housing

Many are vacation homes or Pied-à-terres. Many investor-owned dwellings host guests through AirBnb, VRBO, or Home Away, reducing the supply of long-term rental homes and apartments in or near coastal, lake, or mountain resorts.

Speculative and foreign investors eat up another sizable chunk of potential living space.

Developers of planned communities, especially large-scale subdivisions, purchase large swaths of land and often hold onto vacant parcels for 20 or 30 years before build-out is complete.

During the course of several decades, the developer’s land is unavailable to individual housing consumers. Buyers miss out on opportunities to purchase a small parcel of land and build a custom home — without having to answer to a developer or pay perpetual fees to an HOA.

 

Too many restrictions

Local zoning isn’t the only obstacle to diverse housing options.

Developers of HOA-governed common interest communities almost always restrict the sizes and types of homes that can be built in their self-made fiefdoms.

A buyer’s choice is limited by price range, and separated by subdivision or construction phase in a large scale community.

Typical cookie cutter dwellings include Estate homes, “Patio” or Zero-lot line homes, townhomes, or condominiums.

That’s why it’s so hard for young buyers to build a small cottage or bungalow on a small lot, at a price they can afford, with options to expand or finish a second floor or lower level in the future.

It’s why it’s nearly impossible for a retired couple or a single adult to build a new aging-in-place one-story home or a duplex for in-home caregivers or additional rental income.

Never mind local zoning restrictions. HOA covenants, restrictions, and architectural design rules simply won’t allow any of these options.

 

Too little land

At the same time, local governments keep following the status quo: issuing new land use and construction permits for planned communities with developer-created and controlled homeowners associations.

After all, in the short-term, government benefits from additional property tax revenue, which far outweighs their lower level of public services to HOA members.

But that all-too-common zoning policy reduces the supply of buildable land that is not subject to HOA restrictions and fees.

If a buyer can find that needle in a haystack — a parcel of land outside HOA-ville — the purchase price and cost of building permits are usually way out of reach.

All these obstacles to affordable homeownership lead the would-be buyer to rent an apartment or home from a bulk institutional investor and corporate landlord.

Who then charge high rent, because they can.

Leading us back to the problem at hand — a lack of housing that most Americans can actually afford. ♦

News Source:

California bill to add housing in single-family home neighborhoods blocked by lawmakers By LIAM DILLON, LA Times
MAY 16, 2019 | 5:15 PM