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Why Scott Wiener’s Revised Senate Bill 50 Would be a Nothing Burger

PLANNING WATCH-If you rely on the corporate media, like the Los Angeles Times, for your take on the housing crisis, you have repeatedly heard that the cure is to “build more housing” through across-the-board zone changes.

To achieve this, these armchair experts offer a simple fix: increase the size, height, and density of residential zoning laws. This up-zoning legislation promises you a double chili king egg burger, but when you open the wrapper, expect a nothing burger. If you actually believe a revised Senate Bill 50 will reduce the price of housing and eliminate homelessness, then get ready to sink your choppers into a meatless hamburger bun. 

Some of these up-zoning proposals target specific cities, like LA’s TOC Guidelines, while State Senator Scott Wiener’s revised Senate Bill 50 imposes wide scale residential up-zoning on the entire state of California. 

An initial review of the “new and improved” SB 50 reveals that it carries over eight problematic features from its 2019 version:

  1. It would permit multifamily housing on nearly every private parcel in California. No single-family, duplex, or triplex zoning would be allowed, other than in the coastal zone of Oregon-adjacent Del Norte County.
  2. Its development bonuses would apply to neighborhoods that Sacramento considers to be "jobs or transit-rich.” Since this holdover section applies to most urbanized areas in California, and it would, therefore, foster unplanned residential development in coastal cities of more than 50,000 inhabitants. These provisions would apply to San Diego, Los Angeles, and San Francisco, plus smaller cities like Culver City, Oceanside, Costa Mesa, Newport Beach, Huntington Beach, Long Beach, Santa Monica, San Luis Obispo, Santa Barbara, Santa Clara, Palo Alto, and Santa Cruz.
  3. It provides more "streamlining" of the project approval processes by eliminating conditional use permit requirements, density restrictions, and parking, environmental, habitat, evacuation, earthquake, public safety, and other zoning provisions.
  4. It overrides legally adopted local zoning laws to permit construction of tall luxury condos and townhouses up to 20 units without any inclusionary low-income housing and up to 10 units without any affordable housing contribution.
  5. It eliminates protection in historic districts, including Historical Preservation Overlay Zones (HPOZs) in Los Angeles that were adopted after 2010.
  6. It would subject cities and counties to private lawsuits from developers. 
  7. It does not fund or build any affordable housing.
  8. It contains insignificant tenant protections.

Wiener’s up-zoning approach will fail for at least four reasons: 

Nothing burger ingredient #1. California’s private sector is not capable of building the state out of its housing crisis. According to Jerry Nickelsburg, lead author of the UCLA Anderson School’s annual financial analysis of the California economy: 

“ . . . to obtain a modest 10% reduction in price requires a little over 20% more housing. In Los Angeles County there are currently 3.5 million housing units. This means rolling back to 2014 price levels requires 1.28 million new units. Some of that will support people doubling up who will now move to newly available units and some to support new residents. The City and State affordable housing initiatives will contribute only a small percent of that. 

Achieving anything close to this by the end of 2019, our forecast horizon, is pie-in-the-sky. Indeed, even in a 10-year building program at 130,000 additional homes would be a challenge. Moreover, the new households will require utilities, water, transportation, and city services, and if the experience of the 1960s to the 1980s, the era of large migrations to California provide any guidance, that infrastructure will need to be funded, at least in the near term, with more taxes." 

Nothing burger ingredient #2. Bogus analysis of existing zoning capacity. The second rationale for SB 50 and its local counterparts, like LA’s TOC Guidelines, is that California, as well as cities like Los Angeles, do not have sufficient zoning to build enough new housing to push down prices. These hucksters then claim that the secret sauce to make this happen is massive up-zoning. But, according to the EIR for LA’s General Plan Framework, the city’s zoning build out figure in the mid-1990s was 7 million people, nearly double LA’s 2010 population. Since then, SB 1818 and TOC Guidelines density bonus ordinances have lifted LA’s zoning build-out figure to 9,000,000 people. If up-zoning, the planning approach driving SB 50, lifts that build out figure to 10,000,000 people, it could still not convince developers to invest in housing.  If the investors already made long-term choices to ignore LA’s vast, untapped zoning capacity, why would they suddenly switch gears when the city’s unused zoning capacity inflates further? 

Nothing burger ingredient #3. The population growth forecasts trotted out to justify the up-zoning laws are a hoax. In fact, there is no empirical basis for them beyond the wishful thinking of developers and their proxies.  

The Southern California Association of Governments (SCAG) 2016 population estimate for the City of Los Angeles was 3,933,000 people. The earlier 2010 Census count for Los Angeles was 3,796,000 people. That's a 3.5% increase over a six-year period. However, in a related U.S. Census estimate, LA County grew by only 2.9% between 2010 and 2018. Are we to believe there was a massive migration to Los Angeles from surrounding areas during that period? Census estimates for the Los Angeles Combined Statistical Area (Los Angeles, San Bernardino, Riverside, Orange, and Ventura Counties) reveal a population decline from 2012 onward.  Between 2017 and 2018, the region’s overall population declined by .24 percent. During that period, San Bernardino and Riverside Counties accounted for all the population growth in the Los Angeles Combined Statistical Area. 

Did those who swarmed into Los Angeles from 2010 to 2016 suddenly depart for San Bernardino and Riverside Counties? The most logical explanation is that the Los Angeles Metropolitan Area (Los Angeles and Orange Counties) is losing population, not gaining it, as already reported by Atlantic Magazine in “Why are America’s Three Biggest Metros Shrinking?” California has not fared any better, one reason why its stagnant population will lead to the loss of a Congressional seat.

Other population forecasts for Los Angeles are even more spurious. The State Department of Finance estimated LA’s 2010 population to be 4.1 million people, 300,000 above the actual 2010 Census count of 3,796,000 people. To their credit the Finance Department was more accurate than the Southern California Association of Governments. SCAG’s 2010 forecast for Los Angeles was 4.3 million people, a whopping 500,000 people higher than the Census count.  

Nothing burger ingredient #4: Irrelevant Regional Housing Needs Allocations (RHNA). In Los Angeles most new dwelling units are in the Above Moderate-income category. In response to SCAG-assigned Dwelling Units numbers, the City of Los Angeles is challenging SCAG’s 6th Cycle Regional Housing Needs Allocation (RHNA) of 450,745 units. This RHNA allocation for Los Angeles breaks down as follows: 

115,989 new units must be Very Low Income 

  68,257 new units must be Low Income 

  74,067 new units must be Moderate Income 

192,432 new units must be Above Moderate Income 

450,745 Total housing allocation 

Looking back at the City's performance for SCAG’s current (5th Cycle) Regional Housing Needs Allocation (RHNA) period of 2014-2021, LA’s housing allocation was 82,002 units. So far 80,670 units have been constructed. But, because developers’ business models are based on high profits, not bankruptcy, 73,387 of these new units are in the Above Moderate-income category. This is twice LA’s allotment for Above Moderate housing. The RHNA allocations by category, along with the number of units built so far, are disturbing. They also reveal why expanded RHNA numbers and SB 50 would both be colossal failures.

 

  RHNA Allocation  Total Units to date Percentage of allocation
Very Low Income 20,427 4,265 21%
Low Income 12,435 2,588 21%
Moderate 13,728 430 3%
Above Moderate 35,412 73,387 209%
TOTALS 82,002 80,627 98%

 

 

These current housing figures reflect SB1818 density bonuses, which require the inclusion of affordable units. The production percentage of the Low-Income and Very Low-Income units matches the maximum density bonus that developers can obtain (20%) through SB 1818. The city will probably claim that their (legally contested) TOC ordinance has not existed long enough to increase the number of affordable units. But, the lack of density bonus enforcement suggests there is no reason for these percentages to change in the 2022-29 sixth RHNA Cycle period, even with head winds from SB 50. 

The implications of these four miscalculations are obvious

-  Los Angeles is losing population, and yet we don't have enough affordable housing for those who live here. While there is plenty of new, expensive housing with a glut of empty units, this surplus does not meet the housing needs of most Angelenos. LA’s available Above Moderate housing is far beyond their means, and SB 50 would only make this bad situation worse. 

-  LA’s current density bonus programs, SB 1818 and TOC Guidelines, are not producing the affordable housing most Angelenos need, and SB 50 would not make a difference. 

-  There is no legislative or regulatory ploy, especially up-zoning, that can force bankrupt-averse private investors and contractors to build money-losing affordable housing. 

-  The only option that might work is the one that Senator Wiener and his boosters abhor, the restoration of Federal and Redevelopment Agency housing programs, whether based on subsidies, vouchers, or the direct production and management of public housing. 

While we don’t yet know the legislative fate of Senator Wiener’s revised Senate Bill 50, unless you are a real estate developer, get ready for a hefty serving of nothing burgers if it passes.

 

(Dick Platkin is a former Los Angeles city planner who reports on local planning issues for CityWatch.  He serves on the board of United Neighborhoods of Los Angeles (UN4LA) and welcomes comments and corrections at rhplatkin@gmail.com.  Selected previous columns are available at the CityWatchLA.com archives and the Plan-it Los Angeles blog.) Prepped for CityWatch by Linda Abrams.

 

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