New­som’s hous­ing deal just a baby step

Lodi News-Sentinel - - OPINION - CALmatters is a pub­lic in­ter­est jour­nal­ism ven­ture com­mit­ted to ex­plain­ing how Cal­i­for­nia’s state Capi­tol works and why it mat­ters. For more sto­ries by Dan Walters, go to­men­tary

Ev­ery Cal­i­for­nian should be aware by now that the state’s hous­ing short­age not only causes per­sonal angst for mil­lions of the state’s res­i­dents, but is a key fac­tor in its eco­nomic fu­ture.

The lat­ter was un­der­scored last month in an anal­y­sis of the state’s em­ploy­ment pic­ture by Christo­pher Thorn­berg, founder of Bea­con Eco­nomics and di­rec­tor of the UC River­side Cen­ter for Eco­nomic Fore­cast­ing.

Al­though Cal­i­for­nia is still adding jobs, Thorn­berg said, the rate of growth “rep­re­sents a sub­stan­tial slow­ing from the pace the state ex­pe­ri­enced a few years ago. The prob­lem isn’t la­bor de­mand, the econ­omy is still very strong. The slow­ing is be­ing driven by la­bor sup­ply short­ages that stem from Cal­i­for­nia’s hous­ing sup­ply cri­sis.”

Em­ploy­ers will not add jobs if they can’t find work­ers and work­ers ei­ther won’t come to Cal­i­for­nia, or mi­grate else­where, if they can’t find af­ford­able hous­ing.

That sim­ple, but pow­er­ful, eco­nomic equa­tion makes do­ing some­thing about hous­ing one of the state’s most im­por­tant, but also most com­plex, po­lit­i­cal puz­zles.

As Gavin New­som be­came gov­er­nor in Jan­uary, he sig­naled a get­tough at­ti­tude to­ward cities that make con­struc­tion too dif­fi­cult.

The state sued Hunt­ing­ton Beach, an af­flu­ent coastal city in Orange County, for fail­ing to meet its quota of land zoned for new hous­ing. New­som also vowed to

with­hold trans­porta­tion funds from the state’s re­cently in­creased gas tax if a city con­tin­ues to drag its feet on hous­ing.

Last week, New­som and leg­isla­tive lead­ers an­nounced a deal on hous­ing.

The leg­is­la­tion divvies up al­ready ap­pro­pri­ated funds for bat­tling streetleve­l home­less­ness, cre­ates a new $1 bil­lion fund to re­ward cities that proac­tively pro­mote con­struc­tion and im­poses fines, up to $600,000 a month, on com­mu­ni­ties that con­tinue to lag be­hind.

“If cities aren’t in­ter­ested in do­ing their part, if they’re go­ing to thumb their nose at the state and not ful­fill their obli­ga­tions un­der the law, they need to be held ac­count­able,” New­som said a cou­ple of days be­fore the fi­nal hous­ing deal was an­nounced.

The no­tion of with­hold­ing trans­porta­tion funds was a non-starter in the Leg­is­la­ture. Law­mak­ers were con­cerned that pe­nal­iz­ing lo­cal gov­ern­ments would un­der­cut the coali­tion that pushed for the gas tax in­crease.

So will this hous­ing deal have any real-world im­pact on Cal­i­for­nia’s chronic hous­ing short­age?

Spend­ing more on hous­ing Cal­i­for­nia’s es­ti­mated 130,000 home­less res­i­dents will have some im­pact. But the broader car­rot-and-stick ap­proach will not gen­er­ate any uptick in new hous­ing starts in the near fu­ture, and per­haps lit­tle or noth­ing in the longer run.

Zon­ing more land for hous­ing is just one fac­tor in in­creas­ing pro­duc­tion to the 200,000 units a year the state says are needed.

Even if land is made avail­able via zon­ing, projects still must clear of­ten fierce lo­cal op­po­si­tion, par­tic­u­larly to high-den­sity de­vel­op­ment.

En­vi­ron­men­tal im­pact re­ports, law­suits and re­fusal to sup­ply wa­ter are among the tools of­ten used to block projects.

Even if lo­cal gov­ern­ments over­come that op­po­si­tion and ap­prove their spe­cific plans, de­vel­op­ers must be will­ing to spend many bil­lions of dol­lars to ac­quire the land and build. Re­cur­ring ef­forts to im­pose rent con­trol make them re­luc­tant to make big fi­nan­cial com­mit­ments that might not pay off.

Even if those hur­dles are cleared, there’s one more very thorny fac­tor — a grow­ing lack of con­struc­tion work­ers to do the ac­tual work.

And one rea­son for that lack is the re­luc­tance of work­ers to come to Cal­i­for­nia be­cause they, too, can­not find af­ford­able hous­ing.

What New­som and leg­isla­tive lead­ers are do­ing this year is only a baby step.

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