The United States has a housing shortage. That’s why home prices are rising faster than what many people can afford. But in California, the housing shortage is a crisis. Many people want to live and work in the state, but developers have little incentive to build housing the average person can afford, especially in the hot areas like San Francisco and Silicon Valley. And government hasn’t found the will to be the solution. As former San Jose Mayor Chuck Reed says, “California cares about housing—just not enough to do anything significant about it.”
Reed, who was term-limited in 2014 so couldn’t run again after eight years as mayor and almost 30 years in local government, is an attorney who specializes in land use issues. He was one of the featured speakers at a housing conference NAR hosted earlier this summer in Berkeley, Calif., and his remarks to REALTORS® make it clear he has no shortage of ideas to help get affordable housing built. Of course, his ideas focus mainly on California but they also provide a roadmap the rest of the country can follow.
Take the battle to the Supreme Court
For starters, we should take aim at all the hoops local governments put developers through to get building plans approved—occupancy limits, profit limits, eviction rules—by litigating these restrictions all the way up to the U.S. Supreme Court. As he puts to, “That is the only court where the 5th Amendment seems to be taken seriously.”
Next, change states’ fiscal restrictions to favor housing. He’s speaking about California, but there are lessons here for all states when he talks about modifying property tax allocations so that housing permits generate enough money for cities to pay for increased service demand. He also says states should share sales taxes based on where people live rather than where they buy things. And state and federal transportation money should be allocated to support high-density housing rather than the single-family house on the large lot in the suburbs.
He also wants to see environmental and other reviews streamlined so they’re not used to block developments just because people don’t want them in their backyard.
Long-term, people who care about housing, like REALTORS®, should continue to elect legislators who understand you can’t have job growth without also having places for workers to live.
Reed says California is organized to make it hard to build housing of any kind, but as the housing crisis makes clear, economic development is only half the equation. The other half is having homes for the people who take new jobs. That’s a lesson that we benefit from no matter what state we’re in, as the continued housing storage throughout the country shows. Click on the PDFs below to read Reed’s full remarks.
Other coverage from the conference.
Conference coverage in the June 12 Voice for Real Estate video: