Gov. Newsom and a brick building in Pasadena.nd a brik building in Pasadena.

      A collage of Gov. Newsom and a brick building in Pasadena.

      Governor Newsom is making housing a top priority.

      By Ethan Elkind

      His proposed budget devotes significant resources to housing production and homelessness, including:

      • $500 million for local governments to address homelessness
      • $500 million (from $80 million originally) for the state’s low-income housing tax credit
      • $500 million for “moderate-income” housing production
      • $25 million for homeless Californians to access federal disability programs

      But public cash alone won’t solve the problem, given the scale of the need. Along these lines, Gov. Newsom correctly identified local restrictions on new housing as a key barrier. To address the intransigence, he proposed the revolutionary step of limiting local government access to gas tax funds if the jurisdiction is behind on its housing production.

      A bureaucratic threshold

      But how do you define a local jurisdiction “not meeting” housing production? Right now, it’s a bureaucratic threshold, set by the state for each region, which then in turn sets housing targets for each city and county in the region. Historically though, these “regional housing needs allocations” have been weak and easily gamed (though this process will become more stringent going forward, based on recent legislation like AB 686 and AB 72).

      So if Gov. Newsom relies on an opaque and uncertain state-derived metric, his policy may not be that effective in actually encouraging new housing production. And cities and counties are somewhat limited anyway in how much housing actually gets built in their jurisdictions, particularly if they’re in areas without much housing demand.

      Better metric

      A better metric would involve assessing local zoning and permitting processes near major transit stops or in “low vehicle miles traveled” areas (if a local jurisdiction doesn’t have much transit). Cities and counties can certainly control those two aspects of land use. For example, cities that have upzoned and streamlined permitting near transit would maintain their gas tax funding. Cities and counties that restrict what can be built or require multiple layers of discretionary review would then lose access to dollars.

      Sen. Scott Wiener’s proposed SB 50 would get the state far down that path already, but Gov. Newsom’s use of that kind of budget mechanism would add political heft to the approach.

      And as an added bonus, it might actually work in encouraging responsible local land use policies to boost housing production in the right places.

      Ethan Elkind directs the climate program at UC Berkeley Law, with a joint appointment at UCLA Law. His book “Railtown” was published by the University of California Press.

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      1. Sean Eric McMorris says:

        And what about cities that have met their housing numbers but have provided no affordable units, especially cities with majority low-mod income populations? Justifying the displacement of hundreds of people to make room for higher income residents while developers rake in record profits because of zoning variances and density bonuses is not the answer to homelessness either–it is the problem, in my opinion.
        Yes, throwing money at the homeless problem is not the only answer (it’s better than not throwing money at it), but neither is letting developers build unregulated and without giving back to the community with set aside affordable units in return for subsidies. In addition, granting zoning variances to build near transit stops can surely be gamed as well. Developers hire consultants to provide an EIR or MND that designates a bus stop as a major transit stop. Unless city management questions the developers designation of a major transit stop, or the public is ambitious and savvy enough to read through a 300 page EIR, interpret it correctly and galvanize the public to raise heck, then it’s just another loophole for wealthy developers and politicians who take their campaign contributions to exploit. We need compassionate leaders and developers to solve the housing crisis. We need money thrown at homelessness and its root causes. We need to build, but not without regulation and long-term vision. There is no silver bullet.

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