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Our State Favors Housing for the Rich:
Lots of High-Cost Housing, Very Little for the Poor

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California has a critical shortage of housing; there is far too little for low-income and unhoused people. Streets are lined with the tents of people who must camp on the street or live in their cars because they cannot pay the high cost of housing. Traffic congestion during freeway rush hours includes the many people traveling long distances from home to work.

 

Because of the shortage, legislators voted to authorize more housing in cities across the state. The most recent statewide Regional Housing Needs Allocation (RHNA) requires the building of 312,500 units a year for eight years. However, this allocation is based on 2017 outdated information: in 2017, the California Department of Finance projected a huge population increase by 2060.​

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In 2023, its projection changed. Finance now predicts a decline in population to 2060. It projects only a 2.3% population growth to 2040, declining to 1.3% by 2060. Only half a million more people will live in California in 2060, not the 12 million projected in 2017.

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So how much more housing is needed? In 2018, Housing and Community Development (HCD), because of the 12 million people expected in 2060, found the state was short 2.5 million housing units. As a result, RHNA issued must-build housing quotas to California cities and counties. The quotas continue to this day even though they are no longer correct.​

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According to the U. S. Census, California now has more than 14 million housing units. State RHNA quotas mandate 312,500 more units annually for eight years, that is, 2.5 million more by 2030, adding 18% more housing units for California’s half million more people. The RHNA quotas are wrong.

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What will happen when RHNA based excess market supply meets existing demand? By then, housing builders take the money and run leaving locals to deal with the consequences. Vacancies? Abandonment? Who knows? We now see San Jose and San Francisco landlords defaulting on loans, facing foreclosures. Who manages foreclosed properties?

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Legislators, to speed up housing construction, took away the ability of local elected officials to regulate local housing. Many city council members are angry that the state forces cities to approve developments and ignore local conditions. Cities have flood zones, fire hazard areas, fire and tsunami evacuation routes, rising seas, eroding shores, steep slopes, landslides, abandoned oil wells, and narrow streets that limit housing options. More housing creates a need for more city infrastructure: more streets, sewers, water lines, parks, schools for more children, and hospitals. There is no state funding readily available to adjust for the impact of RHNA housing.

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RHNA quotas are a gift to developers. If a city misses its housing quota, builders can bypass local control, appeal to the state and erect housing units wherever they can purchase land.  If quotas aren't met, cities can be fined and sued.

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San Francisco’s approved housing is in compliance with RHNA quotas, but it is mainly market rate. The city’s median rent is $3,595 a month. One must earn $143,800 a year to afford the median rent. In Oakland, median rent is $2,446 and in Berkeley, $2,850, for those with incomes of $97,000 and $113.000 a year. Where is housing for those who earn less?

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Recent laws seem appealing as they aim to create more "affordable" housing. Here in California "affordable" is based on a county's median household income. Alameda County's median household income is $104,000; Contra Costa's $115,000, and Los Angeles, $70,372. Affordable to whom?

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Sixty nine percent of Californians earn $75,000 a year or less; 53% earn $50,000 a year or less. For them, median rent must be less than $2000 or $1400 a month if rent is 30 percent of their income. These are the incomes of working people that provide the services we rely on. What housing is planned for them?

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Californians do organize. Livable California, Our Neighborhood Voices, California Cities for Local Control, United Neighbors and Catalyst for Local Control oppose these wild west economics. They seek candidates to run for the legislature, they lobby, and they fund legal action against RHNA. Signatures will soon be gathered to put a voter initiative on the 2024 ballot.  

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Clearly, better state policies and more public funds are needed to ensure that increased housing is built for California's working people, people who need good housing on transit corridors near their workplaces. And more housing for those who are low income, aged, disabled or in need.

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We must fix Prop 13 so that corporations like Chevron and Disney increase their 1978 Prop 13 property taxes to their 2023 values while keeping low taxes on private residences like mine. Repeal Costa-Hawkins that prevents cities from legalizing rent control in California. Make Redevelopment Zones legal again. Tax the rich who make more than $250,000 a year. We could also promote social housing and cooperatives. All we need is political will.

 

Margot Smith, Dr.P.H.