Sacramento Report
by Debra Carlton
High prices and the continuing inability of state and local governments to come to grips with California’s housing crisis over the past eight years have forced almost one million more people to leave California than move here, according to a U.S. Census Bureau study released this summer. This is the first time California has shown a net migration to other states since the Census Bureau started keeping track in 1940. The report states that a net of 755,000 Californians moved to other states between 1995 and 2000, and that another 167,000 left between 2000 and 2002, for a total of 922,000 since 1995.
Nevertheless, state Senator Gil Cedillo (D-Los Angeles) is pursuing legislation that would expand the ability of cities and counties to impose rent control and effectively stop construction of urgently needed new housing. His bill, SB 178, is awaiting action on the Assembly Floor, and the state legislature is expected to vote after returning from its summer recess.
SB 178 was introduced in order to provide the city of Los Angeles with additional leverage in a dispute over a mixed-use housing and commercial development near downtown. This dispute between the builder and the city focused on the city’s requirement to make 15 percent of proposed housing affordable to low and very low-income families. The bill, however, would impact more than Los Angeles. If signed into law, it would go into effect statewide.
In order to avoid discouraging the construction of badly needed new housing, existing law exempts newly constructed apartments from rent control. Alternatively, a developer may voluntarily enter into an agreement with a city to provide affordable housing in exchange for density bonuses or other meaningful incentives. Currently, there are over 120 cities that provide affordable housing in this way.
SB 178 would change that. It would no longer require builders to accept incentives in exchange for expanding rent control. Instead, a city would merely be required to offer incentives. Whether or not the terms were acceptable, a city could assert its right to establish rent controls on new housing in its community.
To add insult to injury, the Assembly’s analysis points out that the city of Los Angeles and the developer recently settled their lawsuit, making the entire reason for SB 178 moot. Nevertheless, SB 178 sits on the Assembly Floor, waiting for a vote to send it back to the Senate for concurrence.
Based on figures from the California Department of Housing and Community Development, California needs to produce 220,000 houses and apartment units each year to keep pace with population growth. During most of the 1990s, fewer than 100,000 units were built each year. In the year 2000—a boom year for the economy—fewer than 150,000 housing units were built in California. Over the past 10 years, according to the same source, production of single-family homes has fallen almost 25 percent short of demand; and production of apartments and multifamily housing has fallen an astounding 68 percent short of demand. Laws such as SB 178 are not going to help at all.
The opinions expressed in this article are those of the author and do not necessarily reflect the viewpoint of the SFAA or the San Francisco Apartment Magazine. DebraCarlton is the Vice President of Policy and Research for the California Apartment Association and is CAA’s chief lobbyist. Copyright © 2003. Copyright © 2003 San Francisco Apartment Magazine