15 Things to Know About the California Housing Crisis
Will Gov. Gavin Newsom usher in a new YIMBY era?
SAN DIEGO IS HOME TO MANY TALL RESIDENTIAL TOWERS, INCLUDING THE BROADWAY BLOCK. COURTESY JWDA.
By Irvine City News staff
California Gov. Gavin Newsom took office and immediately set out to solve the state’s housing crisis with a goal of 3.5 million new units of housing built by 2025, some 500,000 units per year. Gov. Newsom also proposed a state investment of $1.75 billion for new housing initiatives.
The plan is ambitious, so ambitious as to be unachievable, many experts have said. Even if they are not all reached, the new policy goals could change the landscape for affordable and market-rate housing. Here are some facts, thoughts, notes and quotes about the housing crisis, and possible civic and business responses to it.
1. Less than 80,000 homes have been built in California annually over the past 10 years. Since 1954, developers have constructed more than 300,000 units in a year only two times. To reach 3.5 million units by 2025, California would have to build housing at a rate not seen even in the best years.
—California Housing Assessment
2. Fifty-three percent of Gov. Newsom’s housing goals are assigned to developing homes around transit hubs; eighteen percent for adding units to multifamily homes in areas zoned for denser development, and only 4 percent on vacant land zoned for multifamily homes.
3. Just 27 percent of California households could afford the median-price single-family home ($588,530) at the end of Q3 2018, according to the California Association of Realtors. Among Southern California counties, Orange County was the least affordable, with a scant 20 percent of households able to afford the region’s median-price home ($830,000).
4. “Orange County is experiencing a substantial shortage of housing, which is creating a significant negative impact on household budgets and the quality of life of its residents, as well as diminishing our county’s workforce. Orange County’s housing shortage threatens our ability to attract and retain a talented workforce, undermining Orange County’s long-term economic competitiveness. As civic leaders we vow to work collaboratively with public, private, nonprofit, and faith-based partners to meet our regional housing needs.”
--Orange County’s Declaration on Housing, a resolution of the OC Board of Supervisors
5. Orange County has the largest share of people who cannot afford to buy homes among the six Southern California counties, according the California Association of Realtors data. And local residents paid 44 percent of their income toward housing, which is more than any other large county in California. In O.C., 79 percent of households cannot purchase a median-priced home, according to the data, which is higher than Los Angeles County’s 75 percent.
6. “In 2018, 237 more affordable housing units opened in Irvine. We will be at 5,500 permanent affordable units – about five and half percent of our total housing stock! – by the end of 2021. The Irvine Community Land Trust, which was started in 2006 by the city for the purpose of providing permanent affordable housing, continues its forward progress.
Last year, the Irvine Community Land Trust opened the 80-unit Parc Derian, which has a number of units reserved for veterans and the disabled. This year the Land Trust is developing Salerno. The 80-unit Salerno begins construction this summer for completion in June 2020. In all, the Land Trust is receiving $29 million from the City over several years for the purpose of permanent affordable housing. Elsewhere in the city in 2018, the 157-unit seniors affordable housing complex, Luxaira, opened.”
--Mayor Don Wagner, State of the City speech 2019
7. “The lack of adequate housing is regularly raised as the top concern of O.C. employers. It causes workers to over-pay, over-commute by driving long distances between affordable housing and work, and over-crowd by doubling up in existing homes, impacting city services, local traffic, family health and educational attainment. Orange County is, indeed, a great place to do business. We’re on track to build nearly 150,000 new homes by 2040, but really the county needs to grow that to 250,000 to keep up with a projected 13 percent population increase and 24 percent jobs increase. And that does not include the 65,000 homes the County is currently short.”
--Lucy Dunn, president and CEO, Orange County Business Council
8. In his January State of the City address, San Diego Mayor Kevin Faulconer, a Republican, proposed some of the most aggressive strategies of any California city to promote apartment and condominium construction, including changing height restrictions and doing away with requirements that developers include parking with projects in areas near transit, rules that drive up costs by as much as $90,000 per spot. The mayor also wants to relax limits on the number of homes that can be built on sites near transportation hubs.
Other California cities are making similar changes. Los Angeles voters passed a plan three years ago that allows developers to build taller and more densely and receive permits more quickly for projects near Metro stations that set aside some units for low-income residents. In December, San Francisco eliminated the requirement that developers install parking spots alongside new homes in the city. Sacramento is phasing out car-centric developments like drive-throughs in its downtown and near transit stops as part of a plan to make it easier to build apartments and condominiums.
9. Jamboree Housing, a nonprofit housing development company based in Irvine, supports the focus on building housing near transit stations. “A focus on land use that combines housing with public transportation can reduce residents’ commute time and overall reliance on personal vehicles, mitigating a generation of vehicle-related carbon dioxide, a leading ingredient in greenhouse gas. It also reduces transportation expenses, making limited income more available for healthcare, education and food.
Transit access is also key in connecting low-income seniors who no longer drive with public transportation to reach necessary medical services, and qualified workers with available jobs in the community where they live.”
10. “The Sierra Club Orange County Conservation Committee urges each municipality exercising land-use authority within the county to approve appropriate new housing developments, including housing within proximity to transit stops, schools, child care centers, parks and commercial areas; multi-family housing in walkable communities; and housing in mixed-use developments.”
--Sierra Club OC
11. To encourage new housing, Gov. Newsom says the state will increase the availability and amount of tax credits for affordable housing developments. He’s also following through on his promise to hold cities accountable when they fail to meet housing goals, suing Huntington Beach for allegedly failing to meet its Regional Housing Needs Assessment (RHNA) allocation. Newsom’s administration says it will offer incentives to cities that reach housing goals; cities that don’t meet those goals could lose out on state dollars for transportation projects.
12. For the planning period of October 15, 2013 through June 30, 2021, Orange County was allocated an overall RHNA of 37,966 units, with the city of Irvine being allocated a RHNA of 12,149 units. In the previous planning period, Irvine sued the Southern California Association of Governments, alleging that its allocation of 35,000 housing units was unfair, as it was 43 percent of Orange County’s entire allocation. Irvine lost the lawsuit, with the appellate court stating that a municipality’s RHNA allocation is “immune from judicial intervention.”
13. “What’s behind California’s anemia in new home construction? Principally, the drawbridge mentality of arrived Californians — the NIMBYs. To watch a land use application for a new housing development — particularly in Southern California — navigate a crucible of angry NIMBYs is like watching a ‘Game of Thrones’ episode.”
--Byron de Arakal, chairman of the Costa Mesa Planning Commission, in an OC Register opinion piece
14. Possible solutions: “Update residential and mixed-use zoning standards to bring them in alignment with the cost of acquiring and developing land. Allow for higher floor area ratios and unit densities. Sweeten density bonus incentives as part of a mechanism to integrate affordable unit allocations. Work with the development community to identify obsolete land uses (shopping malls and mid-century strip centers, for instance) and overlay the mixed-use zones to encourage redevelopment.”
--Byron de Arakal
15. “One of the most important issues for me is, how do I keep young people from leaving Orange County? We have unbelievably talented people coming out of our university systems who cannot afford to live here. We know that the county is aging, and as long as we’re investing in these young people’s education, we want to take that talent and keep it in Orange County.”
--Lucy Dunn, president and CEO, Orange County Business Council
The plan is ambitious, so ambitious as to be unachievable, many experts have said. Even if they are not all reached, the new policy goals could change the landscape for affordable and market-rate housing. Here are some facts, thoughts, notes and quotes about the housing crisis, and possible civic and business responses to it.
1. Less than 80,000 homes have been built in California annually over the past 10 years. Since 1954, developers have constructed more than 300,000 units in a year only two times. To reach 3.5 million units by 2025, California would have to build housing at a rate not seen even in the best years.
—California Housing Assessment
2. Fifty-three percent of Gov. Newsom’s housing goals are assigned to developing homes around transit hubs; eighteen percent for adding units to multifamily homes in areas zoned for denser development, and only 4 percent on vacant land zoned for multifamily homes.
3. Just 27 percent of California households could afford the median-price single-family home ($588,530) at the end of Q3 2018, according to the California Association of Realtors. Among Southern California counties, Orange County was the least affordable, with a scant 20 percent of households able to afford the region’s median-price home ($830,000).
4. “Orange County is experiencing a substantial shortage of housing, which is creating a significant negative impact on household budgets and the quality of life of its residents, as well as diminishing our county’s workforce. Orange County’s housing shortage threatens our ability to attract and retain a talented workforce, undermining Orange County’s long-term economic competitiveness. As civic leaders we vow to work collaboratively with public, private, nonprofit, and faith-based partners to meet our regional housing needs.”
--Orange County’s Declaration on Housing, a resolution of the OC Board of Supervisors
5. Orange County has the largest share of people who cannot afford to buy homes among the six Southern California counties, according the California Association of Realtors data. And local residents paid 44 percent of their income toward housing, which is more than any other large county in California. In O.C., 79 percent of households cannot purchase a median-priced home, according to the data, which is higher than Los Angeles County’s 75 percent.
6. “In 2018, 237 more affordable housing units opened in Irvine. We will be at 5,500 permanent affordable units – about five and half percent of our total housing stock! – by the end of 2021. The Irvine Community Land Trust, which was started in 2006 by the city for the purpose of providing permanent affordable housing, continues its forward progress.
Last year, the Irvine Community Land Trust opened the 80-unit Parc Derian, which has a number of units reserved for veterans and the disabled. This year the Land Trust is developing Salerno. The 80-unit Salerno begins construction this summer for completion in June 2020. In all, the Land Trust is receiving $29 million from the City over several years for the purpose of permanent affordable housing. Elsewhere in the city in 2018, the 157-unit seniors affordable housing complex, Luxaira, opened.”
--Mayor Don Wagner, State of the City speech 2019
7. “The lack of adequate housing is regularly raised as the top concern of O.C. employers. It causes workers to over-pay, over-commute by driving long distances between affordable housing and work, and over-crowd by doubling up in existing homes, impacting city services, local traffic, family health and educational attainment. Orange County is, indeed, a great place to do business. We’re on track to build nearly 150,000 new homes by 2040, but really the county needs to grow that to 250,000 to keep up with a projected 13 percent population increase and 24 percent jobs increase. And that does not include the 65,000 homes the County is currently short.”
--Lucy Dunn, president and CEO, Orange County Business Council
8. In his January State of the City address, San Diego Mayor Kevin Faulconer, a Republican, proposed some of the most aggressive strategies of any California city to promote apartment and condominium construction, including changing height restrictions and doing away with requirements that developers include parking with projects in areas near transit, rules that drive up costs by as much as $90,000 per spot. The mayor also wants to relax limits on the number of homes that can be built on sites near transportation hubs.
Other California cities are making similar changes. Los Angeles voters passed a plan three years ago that allows developers to build taller and more densely and receive permits more quickly for projects near Metro stations that set aside some units for low-income residents. In December, San Francisco eliminated the requirement that developers install parking spots alongside new homes in the city. Sacramento is phasing out car-centric developments like drive-throughs in its downtown and near transit stops as part of a plan to make it easier to build apartments and condominiums.
9. Jamboree Housing, a nonprofit housing development company based in Irvine, supports the focus on building housing near transit stations. “A focus on land use that combines housing with public transportation can reduce residents’ commute time and overall reliance on personal vehicles, mitigating a generation of vehicle-related carbon dioxide, a leading ingredient in greenhouse gas. It also reduces transportation expenses, making limited income more available for healthcare, education and food.
Transit access is also key in connecting low-income seniors who no longer drive with public transportation to reach necessary medical services, and qualified workers with available jobs in the community where they live.”
10. “The Sierra Club Orange County Conservation Committee urges each municipality exercising land-use authority within the county to approve appropriate new housing developments, including housing within proximity to transit stops, schools, child care centers, parks and commercial areas; multi-family housing in walkable communities; and housing in mixed-use developments.”
--Sierra Club OC
11. To encourage new housing, Gov. Newsom says the state will increase the availability and amount of tax credits for affordable housing developments. He’s also following through on his promise to hold cities accountable when they fail to meet housing goals, suing Huntington Beach for allegedly failing to meet its Regional Housing Needs Assessment (RHNA) allocation. Newsom’s administration says it will offer incentives to cities that reach housing goals; cities that don’t meet those goals could lose out on state dollars for transportation projects.
12. For the planning period of October 15, 2013 through June 30, 2021, Orange County was allocated an overall RHNA of 37,966 units, with the city of Irvine being allocated a RHNA of 12,149 units. In the previous planning period, Irvine sued the Southern California Association of Governments, alleging that its allocation of 35,000 housing units was unfair, as it was 43 percent of Orange County’s entire allocation. Irvine lost the lawsuit, with the appellate court stating that a municipality’s RHNA allocation is “immune from judicial intervention.”
13. “What’s behind California’s anemia in new home construction? Principally, the drawbridge mentality of arrived Californians — the NIMBYs. To watch a land use application for a new housing development — particularly in Southern California — navigate a crucible of angry NIMBYs is like watching a ‘Game of Thrones’ episode.”
--Byron de Arakal, chairman of the Costa Mesa Planning Commission, in an OC Register opinion piece
14. Possible solutions: “Update residential and mixed-use zoning standards to bring them in alignment with the cost of acquiring and developing land. Allow for higher floor area ratios and unit densities. Sweeten density bonus incentives as part of a mechanism to integrate affordable unit allocations. Work with the development community to identify obsolete land uses (shopping malls and mid-century strip centers, for instance) and overlay the mixed-use zones to encourage redevelopment.”
--Byron de Arakal
15. “One of the most important issues for me is, how do I keep young people from leaving Orange County? We have unbelievably talented people coming out of our university systems who cannot afford to live here. We know that the county is aging, and as long as we’re investing in these young people’s education, we want to take that talent and keep it in Orange County.”
--Lucy Dunn, president and CEO, Orange County Business Council