The right hous­ing in­cen­tive

Los Angeles Times - - OP-ED - Nicholas J. Marantz is an as­sis­tant pro­fes­sor of ur­ban plan­ning and pub­lic pol­icy at UC Irvine. By Nicholas J. Marantz

As Gov. Jerry Brown and Cal­i­for­nia’s leg­isla­tive lead­ers left for their sum­mer break, they said the top pri­or­ity when they re­turned would be ad­dress­ing Cal­i­for­nia’s hous­ing af­ford­abil­ity cri­sis. They’ll con­sider a bevy of bills, with an em­pha­sis on pro­vid­ing funds for hous­ing devel­op­ment. More fund­ing will help, but it can’t solve the cri­sis. To ef­fec­tively al­le­vi­ate the hous­ing short­age, the state must also en­sure that lo­cal gov­ern­ments re­spon­si­bly use their power to reg­u­late land use.

Through­out the U.S., mu­nic­i­pal­i­ties adopt zon­ing or­di­nances to gov­ern devel­op­ment and land use. In Cal­i­for­nia, lo­cal zon­ing must — in prin­ci­ple — ac­com­mo­date hous­ing af­ford­able to low­er­in­come house­holds. Build­ing apart­ments, rather than sin­gle­fam­ily homes, is the most ef­fi­cient way to ac­com­plish this goal. But even when lo­cal zon­ing al­lows for high-den­sity devel­op­ment, lengthy lo­cal re­view pro­cesses and po­lit­i­cal op­po­si­tion fre­quently stymie such projects in Cal­i­for­nia.

Mas­sachusetts, fac­ing a sim­i­lar sit­u­a­tion, passed a law that pro­vides a promis­ing model for Cal­i­for­nia. It shifts some power over land use away from lo­cal gov­ern­ments that aren’t meet­ing state af­ford­able hous­ing goals. Al­though the law is con­tro­ver­sial, it has proved po­lit­i­cally re­silient, and Mas­sachusetts vot­ers soundly re­jected a 2010 bal­lot mea­sure to abol­ish it.

Two com­po­nents dis­tin­guish the Mas­sachusetts law. First, qual­i­fy­ing projects — in gen­eral, those re­serv­ing at least 25% of the units for house­holds earn­ing 80% or less than the area’s me­dian in­come — are el­i­gi­ble for a “com­pre­hen­sive per­mit.” The com­pre­hen­sive per­mit ex­pe­dites the lo­cal re­view process, and it en­ables de­vel­op­ers to pro­pose projects at higher den­si­ties than oth­er­wise per­mit­ted. The re­sult­ing projects can thus pro­vide mar­ket-rate units as well as those that are af­ford­able to low-in­come house­holds. (Cal­i­for­nia needs more of both.)

The sec­ond com­po­nent is an ap­peals process. If a com­pre­hen­sive per­mit is de­nied or is sub­ject to con­di­tions that are un­ac­cept­able to the de­vel­oper, the state can re­quire the mu­nic­i­pal­ity to demon­strate “a spe­cific health or safety con­cern of suf­fi­cient grav­ity to out­weigh the re­gional hous­ing need.”

In ef­fect, the ap­peals process pro­vides for an over­ride of lo­cal de­ci­sion-mak­ing. Mu­nic­i­pal­i­ties are ex­empt from the ap­peals pro­ce­dure only if they have ac­com­mo­dated their fair share of af­ford­able hous­ing, as de­fined by state law, or if they have a state-ap­proved hous­ing pro­duc­tion plan and can show mea­sur­able, con­sis­tent progress to­ward meet­ing the state’s stan­dard.

I an­a­lyzed the ef­fect of the Mas­sachusetts law with real es­tate econ­o­mist Lynn Fisher. Ac­cord­ing to our re­search, de­vel­op­ers of rental projects pro­posed be­tween 1999 and 2005 in the suburbs of Boston gen­er­ally used the law to build in places where more hous­ing could do a lot of good — mu­nic­i­pal­i­ties that were rel­a­tively ac­ces­si­ble to jobs but that had pre­vi­ously placed strin­gent re­stric­tions on apart­ment projects.

There are good rea­sons that Cal­i­for­nia and other states give lo­cal gov­ern­ments pri­mary au­thor­ity over land-use reg­u­la­tion, and equally good rea­sons to en­sure that this au­thor­ity is ex­er­cised re­spon­si­bly. Lo­cal of­fi­cials are best po­si­tioned to un­der­stand the ef­fects of devel­op­ment on a given site and are best equipped to rec­og­nize the in­ter­ests of cur­rent res­i­dents. But lo­cal of­fi­cials’ at­ten­tion to those very in­ter­ests can scut­tle ap­pro­pri­ate devel­op­ment pro­pos­als.

In Cal­i­for­nia, a bill to pro­vide for a com­pre­hen­sive per­mit sys­tem is pend­ing in the Leg­is­la­ture, but it doesn’t cur­rently in­clude a ro­bust ap­peals process. Leg­is­la­tors should add one and, at the same time, au­tho­rize fund­ing and tech­ni­cal as­sis­tance to help mu­nic­i­pal­i­ties plan for new devel­op­ment and pro­vide ad­e­quate in­fra­struc­ture.

As any­one who has re­cently searched for hous­ing in the Boston area knows, the Mas­sachusetts ap­proach is not a panacea for hous­ing af­ford­abil­ity. No sin­gle pol­icy will solve hous­ing short­ages that have been mount­ing for decades. But the Mas­sachusetts model shows how Cal­i­for­nia could ef­fec­tively en­cour­age lo­cal gov­ern­ments to help ad­dress the state’s hous­ing af­ford­abil­ity cri­sis.

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