There is near universal agreement that California is suffering from a severe affordable housing crisis. The cost of housing, particularly in more populated areas, is driving longtime residents away and making it almost impossible for even average income families to rent, let alone buy, a home.
The state’s response has been to encourage the construction of more housing by mandating higher densities. This approach is based on the simplistic assumption that by increasing the supply of housing, the price of housing will become more affordable. Unfortunately, it’s more complicated.
New laws have been adopted making it almost impossible for cities and counties to deny proposed higher density housing developments. In addition, just about every single-family home lot is now eligible for two accessory dwelling units without the requirement for the property owner to live in any of the units.
On top of this, a law is moving through the Legislature (SB 9) that will allow every parcel with a single-family zoning designation to be split in two with no review of potential impacts on, for example, traffic or water availability. Essentially, the state will be doubling the density in every single-family neighborhood.
What is the problem with this sledgehammer approach to our housing crisis? These new laws will slowly create additional housing. However, their unintended consequences will cause an immediate and considerable increase in the cost of housing everywhere. It will become more expensive for average income families to buy homes and will lead to increased rent generally.
Why is this? The price of a house reflects what can be done with the property. A parcel with a single-family home on it has a certain market value. That value increases substantially if one or more units can be added, or if the property can be split in two. Sellers know this, and when greater densities are mandated on what are now single-family properties, the price of single-family homes will increase significantly, reflecting their increased market value.
The result, then, is that while some new housing is being built that could reduce the price of housing, the increased value of houses overall will result in an overall increase in the cost of housing. These new state laws will mean that the cost of housing will increase and become less affordable for everyone.
This doesn’t mean that encouraging additional housing construction is a mistake. There just needs to be an understanding of the potential deleterious consequences of a proposal and steps taken to avoid them.
For example, making it easier to build accessory dwelling units makes sense but not where it unnecessarily increases housing prices. Requiring owner-occupancy of one of the units can increase the supply without causing a major spike in housing prices by encouraging housing speculators.
The State goal of increasing affordable housing is important. As we’ve learned in Santa Cruz, inclusionary housing requirements on large multi‑family developments can help. There should a statewide inclusionary requirement.
Finally, SB 9, in its current form, should be defeated. Doubling the density in all single-family zones may slowly cause some increase in the housing stock, but with a potentially large and almost immediate increase to the price of housing everywhere.
Andy Schiffrin is the Chair of the Santa Cruz City Planning Commission. He has a degree in City Planning from MIT and teaches Environmental Assessment at UCSC.