Jordan Grimes, an activist with the group Peninsula For Everyone, recently live-tweeted a thread regarding a meeting by proponents of a frankly ridiculous ballot initiative regarding land use in California.
Proponents of this initiative claim that bills coming out of the California state legislature such as:
recent legislation streamlining permitting for Accessory Dwelling Units (ADUs)
Senate Bill 9 (SB 9), which legalized duplexes and lot splits on all lots currently zoned for single family exclusively
Senate Bill 10 (SB 10), which streamlines environmental review for localities undertaking upzoning near high quality transit
strip cities of their “local control.” This initiative, should it pass, would rule that all state laws regarding land use are superseded by local laws, essentially ruling them void. The inimitable @TribTowerViews detailed some of the consequences of such an initiative here:
However, the fundamental premise behind this “local control” initiative is flawed, because the effects of housing are never just local.
Before we go further, it’s worth mentioning that “local control” has an explicitly racist history. For example, Forsyth County, Georgia, where African Americans were violently expelled in 1912. The county remained heavily white even well into the 80s, and when Oprah Winfrey visited the county, this is what she heard regarding the “right” of residents to determine their neighbors (excerpt is from the excellent book Sundown Towns by James Loewen):
[People of other races] have the right to live wherever they want to, but we have the right to choose if we want a white community also.
In essence, the community deserves “local control,” over who the residents are. In Forsyth County, Georgia, that meant local veto power over whether African Americans were allowed to live in the county.
Forsyth County was not alone in using “local control” for explicitly segregationist purposes; cities across Southern California such as Glendale and Culver City, South Pasadena, and La Jolla required explicitly racist restrictive covenants that banned African Americans, Mexicans, and Jews respectively from being sold houses in those cities. Even after Shelly v. Kraemer, which ruled restrictive covenants void, those cities continued using other racist tactics such as realtor steering to prevent minorities from owning a house in their cities.
Suppose you got a job in Santa Monica and wanted to move close to the office. All else equal, you would probably find an apartment close to your work and walk or bike. However, imagine if Santa Monica, under the guise of local control, banned people of your ethnicity from being allowed to buy or rent in the community. Would you consider this type of “local control” just or necessary? Of course not, it’s preventing you, a hard working taxpayer who would have contributed to the city from doing so because of an arbitrary condition you had no control over, and now you’d be forced to commute from the Westside on the E line, or drive in from the San Fernando Valley.
You may not think this is what happens to many workers and families in California — after all, we banned discrimination in housing based on race, sex, and other protected categories in 1968 — but a similar scenario plays out in most of California. The arbitrary condition nowadays is not race but income, wealth, and age, yet the culprit remains “local control.”
The city of Palo Alto is one of the largest employment centers in the San Francisco Bay Area. It’s home to Stanford University, Hewlett-Packard, VMWare, Tesla, and many, many other large employers. However, despite this, Palo Alto’s zoning map looks like this:
Anything colored yellow in this map signifies zoning exclusively for single family homes. Palo Alto, despite being one of the largest jobs centers in the Bay Area, is zoned almost exclusively for single family homes outside of some mixed use development near the Caltrain station (the black dots in the city). This extremely low zoned capacity, paired with accelerating job growth throughout the Bay Area has led to Palo Alto having 3.5 jobs for every housing unit. Palo Alto is also, incidentally, one of the most expensive cities in the United States, with an average house price of around $3.5 million.
The problems of “local control” are several in the case of Palo Alto:
Most of the people affected by Palo Alto’s land use decisions (people who commute into the city) are not residents of the locality.
Palo Alto is also not representative of the people who are most affected demographically — about 55% of PA is non-Hispanic white, while only 31% of Santa Clara and Alameda Counties (the primary source of Palo Alto’s workforce) is non-Hispanic white. Palo Alto is also one of the oldest cities in the Bay Area; about 1/5 of the city is over the age of 65, compared to less than 14% of Santa Clara and Alameda counties.
Every time Palo Alto adds a new job, the person who takes that job has to live somewhere, and since that somewhere is almost certainly not Palo Alto, it will be Sunnyvale, or San Jose, or Gilroy, or even farther than that.
In essence, Palo Alto’s land use decisions clearly have an effect outside the city of Palo Alto, and delegating control to Palo Alto leaves out the people who are most affected by those decisions.
Now, obviously, Palo Alto’s decisions alone are not solely to blame for the Bay Area’s housing affordability crisis. A myriad of factors (which I go into here) have combined to create the mess we’re in, but it’s clear at this point that land use decisions that Palo Alto makes play a role in the housing affordability of cities outside Palo Alto.
Cities and city boundaries are simply lines on a map that do not come close to denoting the labor and housing markets that those cities affect. San Francisco added 5.7 jobs for every new housing unit in the past fourteen years — those other 4.7 people that work in SF don’t simply disappear, they go to Oakland or Walnut Creek and buy houses there. The demand for living in San Francisco diffuses outward, to the point where a house in Brentwood, a far-flung suburb of SF, costs almost $350 per square foot, compared to $250 per square foot in Silver Spring, a major job center right next to Washington D.C. (a region that, while still very expensive, is far cheaper to own a house in than the San Francisco Bay Area).
However, what was said earlier does not explain why cities choose to add so many jobs while adding so few households, and for that we must look at localities through the lens of game theory and public goods. The Twitter user @yhdistyminen detailed this idea here:
In essence:
Local politicians only listen to their own constituents, especially the ones that show up to public meetings (who are disproportionately older and whiter, and are also more likely homeowners).
These constituents have the incentive to maximize the number of jobs in the community (since living near jobs has high demand and so would increase those constituents’ house values)
The same constituents have a similar incentive to keep their very same cities exclusive by throttling supply where possible — an increased supply of housing is what reduces their house values.
Obviously though, the houses need to be built (since the jobs are there and so is the demand), meaning that development is pushed to poorer communities or to greenfield — areas where the benefits to building housing are not readily seen.
This cycle is also exacerbated by the fact that, at least in California, housing does not provide as much property tax revenue as office, commercial, and industrial property does, meaning that cities have an incentive to expedite approval of the latter while they are able to drag their feet on the former.
Take this cycle for every municipality in the Bay Area or Los Angeles metro area, and you get each city maximizing jobs while attempting to minimize the number of homes, leading to a spiraling affordability crisis
So what is the solution to this problem? There are many, but I would like to shout out two, namely Japan’s liberal zoning rules and region-level planning.
Japanese-style liberalized zoning
After Japan’s asset bubble burst in the 1990s, the country was staring down a severe housing shortage not unlike what we are facing in California. The government enacted a series of zoning liberalizations throughout this period of time, creating the 12 zone system detailed in this blog post.
Even the “lowest density” zone in Japan allows for some small commercial enterprises, with many different types of housing allowed even at this lowest density level. Most importantly, though, zoning in Japan is not single use. If you live in a Category II Residential zone, you can not only build hotels and inns, but you can also build small scale commercial or single family housing as you would in a Category I low rise residential zone. Essentially, zoning is “inclusionary” (separate from “inclusionary zoning” that we have in the United States).
Localities do get the ability to set their zoning in Japan, but as you can see even the most “exclusive” zone allows for accessory commercial units and multiple different types of housing (provided they conform to certain requirements around floor areas and shade set in the building codes).
Providing a high level of housing choice as a minimum requirement skirts the problems of local control leading to stringent rules surrounding housing supply. In Japan, for example, Tokyo remains affordable even as they grow in population, keeping the country’s most dynamic wealth creation centers accessible to all.
In California, we’ve already seen some progress in allowing “inclusionary” housing rules, with the passage of ADU permit streamlining and SB 9. These rules don’t mandate ADUs or duplexes, but they simply allow them in neighborhoods currently zoned exclusively for single family houses. Further legislation that legalizes accessory commercial units, mid-rise apartments, or small lot housing would be the next logical step.
Regional Planning
Similar to the maxim of “if you want to solve a problem, enlarge it,” one of the simple solutions to the complicated system of incentives and levels of government that planning decisions have to go through is to make all land use decisions go through the metro area level rather than allowing localities to set their own land use policies.
In California, there are several associations and councils of local governments which coalesce into regional planning agencies including the Association of Bay Area Governments (ABAG) and the Southern California Association of Governments (SCAG). These councils of government receive housing targets known as the “Regional Housing Needs Allocation” or RHNA that they dole out to their member cities to plan.
Each of these member cities updates the “Housing Element” or HE of their general plan, identifying sites to develop this housing, committing to ideas that reduce roadblocks to building housing, and identifying candidates for and committing to rezoning. The primary problem is that these housing elements are usually extremely bad, often choosing sites that will never be redeveloped, not committing to rezoning, failing to identify and remove roadblocks to new housing construction such as egregious parking minimums, and so on.
Aside from state zoning law pre-emption that would create something along the lines of a Japanese style zoning system in California, the state can mandate that, rather than localities, the respective associations of government be given the task of planning new development, rather than using carrots and sticks to goad municipalities to do this planning.
The United States already has a region level governmental organization — Oregon Metro handles planning and development in the Portland metro area. The state requires that the metro area avoid sprawl by setting urban growth boundaries, which is under the purview of Metro as opposed to each municipality, and Metro’s mandate is to ensure proper planning for future growth.
While Portland is struggling with a housing shortage and affordability crisis of its own, the region is still more affordable than either the LA metro area or the San Francisco Bay Area. Region level planning helps avoid some of the pitfalls of the current system of land use planning.
It helps avoid the public goods game described earlier by allowing an agency expressly dedicated to a planning target that is focused on building more housing (say, targeting a certain rental vacancy rate or jobs to housing ratio).
Region level planning allows for a informed understanding of commute patterns that can guide future growth, something that local planning does not have the power nor understanding to undertake.
Higher levels of government generally tend to be more amenable to housing reforms, and just as with Japan, enlarging the system of planning creates a more pro-housing level of government expressly in charge of land use patterns.
Most importantly of them all, regional planning allows state politicians to skirt the problem of “local control” by allowing them an out — it’s not the state that is creating dictats from up top that reform zoning, it’s a regional level organization that is undertaking pro-housing reforms.
There are obviously differing solutions that people have to fixing the housing shortage and affordabillity crisis — some may be focused on public housing and rent stabillization, others may be focused on zoning reform. However, we must all avoid falling for the siren song of local control. Local control:
has been used as an excuse to undertake segregation
is the source of extreme jobs to housing imbalances in major cities
creates city governments that are captured by rent-seeking interests whose number one aim is to increase their property values
does not contribute to affordability at all
Eliminating local control of housing by either state/federal pre-emption of zoning or by mandating regional (rather than municipal) planning goes a long way in fighting these problems. We’ve spent the last 50-odd years giving far too much planning power to municipalities, and the results from that experiment have not been pretty. “Local control” delenda est.