PD Editorial: Breaking the deadlock on housing

Does anyone in California want more housing?

Gov. Jerry Brown’s assessment of high prices and low vacancy rates - “the problem is you don’t want housing up there” - came in response to a query about Sonoma County, but he could just as easily have been referring to any county, at least any coastal county.

A new report from the state’s nonpartisan legislative analyst summarizes the economics and politics of housing in the nation’s most populous state, finding many of the same ambiguities expressed by policymakers in Sonoma County.

Among the findings:

The average California home costs $437,000, more than double the U.S. average. Even in the state’s least expensive cities, prices are above the national average.

California’s average monthly rent - $1,240 - is about 50 percent higher than the national average. Here, too, averages in California’s most affordable cities exceed the national average.

Housing prices have risen at a faster rate here, and the trend is accelerating. In 1980, the average home cost 80 percent more than the national average. By 2010, it was double. It’s now 2.5 times more expensive.

“A collection of factors drive California’s high cost of housing,” the report says. “First and foremost, far less housing has been built in California’s coastal areas than people demand. As a result, households bid up the cost … In addition, some of the unmet demand to live in coastal areas spills over into inland California, driving up prices there, too.”

Because of high prices, California has one of the lowest home-ownership rates in the nation.

California adds 100,000 to 140,000 housing units annually. To flatten the cost curve, the legislative analyst said that needs to increase by about 100,000, and it needs to occur “almost exclusively” in coastal counties.

That’s where politics, and topography, kick in.

As the analyst’s report notes, almost two-thirds of the area surrounding urban centers on California’s coast is unsuitable for development because of mountains, hills, water and other environmental factors. That’s a significant contributor to high land prices. So are development fees for associated costs such as new roads and schools, and building standards to address seismic safety, energy efficiency and other policy goals.

Many communities have enacted development limits, including caps on density and building permits, in response to public concerns about declining quality of life. Coastal residents tend to have higher incomes and are concerned that further development, including redevelopment of underutilized land, threatens natural amenities and overburdens roads and other infrastructure. “As a result,” the report says, “residents often push back against proposals for new housing.”

Yet another factor is California’s funding mechanism for local government, which provides incentives for commercial development but none for residential development.

Some of these conflicts can’t be resolved.

Housing costs will remain above average because of a steady demand to live in California and a limited supply of land.

Still, policymakers can seek out opportunities to reduce building costs, use land more efficiently and expand affordable housing programs. There will be political obstacles, including ongoing public concerns about the impact of growth on the environment and public infrastructure.

It’s easy for Brown to deflect responsibility. It would be more challenging - and more fitting for this history-making governor - to try to reconcile housing needs and environmental concerns before the gap between California’s haves and have-nots grows even wider.