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California’s ongoing housing affordability crisis could be solved with less red tape and more construction, according to Nolan Gray, a policy expert with pro-housing group California YIMBY (Yes In My Backyard), and Jim Righeimer, former Costa Mesa mayor and developer.
Righeimer said the main solution to California’s housing affordability crisis is increased construction.
“The question is, how do you do that?” he said, noting that requiring developers to subsidize new construction tends to be more difficult in locations with less housing demand and lower cost of living, because the profit margin is much lower. In contrast, on the coast, there is a lot of demand for new construction, and developers can easily afford the extra cost. Those areas, however, generally don’t end up being affordable for low-income residents.
“We do get to a point of saying, ‘Just because you want to be here, doesn’t mean we should find some way to subsidize [housing] to have you here,’” said Righeimer, suggesting plenty of people, especially families, sacrifice prime locations in favor of moving inland to find an affordable home.
Certain parts of Southern California and the Bay Area are the “one percent of the one percent of the one percent,” Righeimer said. He mentioned the Inland Empire as an example of a more affordable area.
“The problem is the local politics often don’t line up around that, and we’re in a bit of a ‘prisoner’s dilemma,’” he said.
For example, if Costa Mesa were to allow construction of a considerable amount of housing, but other jurisdictions in Orange County do not permit more housing, the overall affordability would be negatively impacted, he said.
“One thing that the state can come in and do that’s a little bit positive is to say, ‘Everybody needs to come up with a plan to allow at least a little bit more housing,’” Gray said.
However, when local government officials do step in with a plan, he said, such as rezoning an area to allow more housing construction, they often face resistance from constituents.
“If it takes two years to get entitlements and permits to actually start building, you’re not going to have a lot of projects,” he said, noting this is especially true when it comes to smaller construction firms which lack the staff attorneys needed to navigate state laws.
“And then we have to get the cost down,” said Gray. “California is one of the most expensive states to build in.”
According to Gray, one of the most successful interventions in the past ten years has been the statewide legalization of Accessory Dwelling Units (ADUs).
“This was an intervention that didn’t cost the government any money,” Gray said.
“And those are precisely the types of housing that are illegal to build, in the case of L.A., in about 75 percent of the city, [and] in your typical suburb, probably about 100 percent of residential areas,” Gray said.
“All of my peers—all their kids, feel like losers,” said Righeimer. “They got college degrees and everything else. They can’t buy a house.”