Housing legislation comes with unaccounted infrastructure costs

There appears to be no limit to the tidal wave of legislation emanating from California’s Legislature designed to boost construction of multiunit housing while restricting local governments’ authority to regulate the resulting new developments.

Typical is Senate Bill 9 introduced by Sen. Scott Wiener (D-San Francisco). It allows for duplexes and lot splits in single-family residential zones to be allowed by right. While there are merits to efforts facilitating more accessory dwelling units, the question remains: Who pays for its impacts?

It is undeniable that residential construction needs proper infrastructure to exist.

The North Bay faces an imminent drought complicated by Sonoma’s and especially Marin’s limited water supply. Someone will have to pay for new dams and reservoirs and get them past environmental review.

More residents imply their mobility needs must be addressed to forestall even worse congestion. Increased capacity on Highway 101 and on Marin’s already jammed east-west collector roads are essential as is better public transit for intercounty travel.

Additional classroom capacity is another inevitable consequence. Parts of Marin have surplus facilities due to declining enrollment but the expense of additional teaching staff must be anticipated.

The infrastructure all new housing demands is traditionally funded by property taxes generated by the units. For an everincreasing population, those revenues are often inadequate to cover the full tariff for additional firefighters, police, sheriff’s deputies, parks, libraries, public health services, street maintenance and disaster preparedness.

Few developers can pile on the cost of adding these to the price of new homes. Coastal California already endures sky-high costs of labor, land, materials and regulatory compliance. Add in an infrastructure surcharge and residential construction becomes unaffordable for all except the top percentage of potential buyers.

That leaves only two alternatives. Either the state of California pays or the legislators and Gov. Gavin Newsom leave it to existing taxpayers, including homeowners, to pick up the tab.

Logically, the state should fund these costs. After all, legislators of both parties backed by their allies and campaign funders in real estate development, technology and the building trade unions are the source of demands that the housing crisis be abated.

California’s Constitution actually requires the state to reimburse local agencies and school districts for these hefty expenses. Section 6(a) of Article XIIIB reads, “Whenever the Legislature or any state agency mandates a new program or higher level of service on any local government, the State shall provide a subvention of funds to reimburse that local government for the costs of the program or increased level of service.”

Due to a poorly worded ballot measure, subsequent court interpretations made this section of the Constitution meaningless. Almost all legislation creating unfunded mandates come with boilerplate exempting the Legislature from its coverage. Typical is Section 5 of Wiener’s SB 9: “No reimbursement is required by this act pursuant to Section 6 of Article XIII B of the California Constitution because a local agency or school district has the authority to levy service charges, fees, or assessments sufficient to pay for the program or level of service mandated by this act, within the meaning of Section 17556 of the Government Code.”

In essence, our state government doesn’t have to pay to play since localities can raise taxes (with voter approval) to pay for new housing’s essential infrastructure. Legislators can delight housing activists by “doing something” when they pass laws forcing other agencies to pay their legislation’s realworld impact.

There’s only one alternative, however unlikely, to reverse this legislative power grab.

Local governments’ advocates and organized homeowners need to collect signatures and place on the California ballot a proposition — complete with bullet proof language — that once-and-for-all prohibits state government from imposing unfunded mandates on any city, county, school or special purpose district.