A possible solution to California’s housing crisis

California could cure its housing shortage by mandating that large projects and municipalities provide sufficient housing to match commercial development.

housing-evangelistCalifornia needs more housing. Everyone recognizes this fact, even the nimbys who oppose all new developments. California builders and developers fail to produce sufficient quantities of housing because they meet opposition at every turn. Nobody wants more housing because they associate housing developments with increased traffic congestion, pollution, and the destruction of the natural environment.

California suffers from an economic malady known as the Tragedy of the Commons. According to Wikipedia, “The tragedy of the commons is an economic theory of a situation within a shared-resource system where individual users acting independently according to their own self-interest behave contrary to the common good of all users by depleting that resource through their collective action.” So how does this apply to California housing?

Each individual in California wants to be the last new resident in their neighborhood. The nimbys lobby their local politicians to block new development because they believe it will improve their quality of life. And since local governments directly control development approvals in California, politicians pander to nimbys or face defeat at the polls; thus almost no new residential developments obtain approval in California, creating a shortage of housing that adversely impacts everyone.just_say_no

Most economists believe the only solutions to “tragedy of the commons” type problems is for a government entity to step in and force cooperation for the greater good because individuals acting in their best interest fail to produce a desirable result. So how could the nimby problem be addressed in California?

The State established the California Coastal Commission to address a similar problem. The actions of individual developers along the coast was ruining a valuable resource used by everyone. The Commission regulates all land use within the coastal zone and serves as another layer of regulatory approval. We need something similar in housing.

California Housing Commission

A California Housing Commission would have a simple mandate, “To ensure sufficient housing is provided to meet the needs of a growing population and economic growth.” This agency would oversee County and City general plans to ensure a balance between residential and commercial development. Further, the Commission would exercise discretionary approval power over projects of a certain size to confirm the residential and commercial balance is maintained throughout the cities, counties, and regions in California.what_your_excuse

Do we really need another agency to approve plans? Unfortunately, yes we do. Without this agency, each local governing body will continue to act in its own best interest and exacerbate the housing shortage.

Is Sustainability a Dodge for Housing in the Bay Area?

Leaders in Brisbane, California, want to prioritize sustainability—and exclude homes—in a massive new development just outside San Francisco.

KRISTON CAPPS, @kristoncapps, Sep 29, 2016

The Bayshore Station might be the closest point to the middle of nowhere that’s still accessible by Caltrain. Located in sleepy Brisbane, California, just south of San Francisco’s Visitacion Valley, the stop doesn’t offer much more than access to a vast abandoned Southern Pacific rail yard. That is about to change.

On Thursday, the Brisbane City Council will review a plan to turn the rail yard upside down. Brisbane Baylands, a massive mixed-use project proposed by Universal Paragon Corporation, the developer that has owned the 684-acre parcel since 1989, would include more than 4,400 housing units. For a metropolitan area parched for housing, the Baylands development promises a blooming desert oasis.

That might be a problem, though, for Brisbane—a city with fewer residents (population 4,282) than the number of new homes, condos, and apartments that Universal Paragon intends to build. According to The San Francisco Chronicle, the city is pushing two alternative concepts, one of which would devote 8.3 million square feet entirely to commercial space. Neither alternative would allow for any housing.

“We’ll provide the commercial,” Clifford Lentz, mayor of Brisbane, told the Chronicle. “San Francisco will provide the housing.”

I appreciate his honesty, but I find his statement appalling. It’s a clear example of why a California Housing Commission is necessary.


It’s as crisp a comment on the Bay Area housing crisis as you’ll find anywhere. Residents of municipalities across the region, dreading traffic and change, reject sorely needed housing on the logic that housing would work better somewhere else.

If California created a housing commission, projects like the one above would have a large housing component in order to obtain the commercial development they want. If the City of Brisbane wants the tax revenue from several million square feet of commercial space, then they must provide housing for the people who will work in that space. Doesn’t that seem like a fair compromise? Consider the alternative…american_excess

Brisbane has given the old standard a new refrain, however. The community is pushing for exceedingly high standards for sustainability—standards that do not leave any room for housing. …

But this language fails to adequately convey the fact that building homes and transportation adjacent to employment centers is essential to achieving sustainability. In that sense, Brisbane has missed the forest for the trees. Land use, not building materials, drives sustainability. The city will only meet that metric if housing is allowed. …

Jonathan Scharfman, the director of development for Universal Paragon, describes the framework as “solid” in some respects but says that it wholly ignores the negative externalities associated with “absolutely crushing” commutes in the Bay Area. Scharfman says that Brisbane currently imports some 12,000 workers per day. (That number is not out of line in San Mateo County, which has created more than 50,000 new jobs since 2011 but only 3,000 new housing units.) Without adding housing, building out 8 million square feet of commercial space in Brisbane will dramatically exacerbate the problem for the city’s workforce.

Municipalities all want commercial and retail space because it generates sales tax revenue. None of them want residential development because it incurs the same costs for city services but provides far less revenue, creating the “tragedy of the commons” problem.

“It’s a manufactured justification for a distaste among voters in small towns to claim that having no housing next to a development that’s going to create thousands and thousands of new jobs is sustainable,” Scharfman says. “It’s just anathema.”

Governor Brown recently tried and failed to push as-of-right development approval for high-density housing. While this would have helped provide more housing units, it failed to address the root of the problem.

The simplest solutions are often best solutions. Mandating the County and City governments must provide sufficient housing in their general plans and project approvals is a simple solution that would solve the problem over time. It would eliminate the preference for commercial development at the exclusion of housing, which is the source of the long-term shortage. This solution would work.

Would such a solution be politically feasible? I don’t know. How much worse does the problem need to get before we are willing to act?