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Solimar Research

Sacramento Should Reconsider Approach to Housing Elements

Well, local governments around California finally got their wish: The staff at the state Department of Housing & Community Development that reviews housing elements has been cut to the bone. So what does this mean about state review of housing elements and, by extension, state law about housing elements as well?

In approving the 2011-12 budget back in June, Gov. Jerry Brown gutted HCD's Housing Policy Division the only office at HCD dependent on the General Fund and the one that handles review of housing elements. In all, 10 positions were eliminated. It'll be almost impossible for HCD to maintain a brisk schedule of reviewing housing elements, as it has done over the past few years. As CP&DR recently reported, interim HCD Director Cathy Creswell who ran the Housing Policy Division for many years says that the number of housing elements up for review next year will decrease and therefore HCD will be able to keep up with the work load (see CP&DR Vol. 26, Issue 14, July 2011 http://www.cp-dr.com/articles/node-3003).

For now. But the next couple of years will be important in the world of housing elements primarily because the Regional Housing Needs Assessment process (which determines how many housing units each local government must plan for in its housing element) is now tied to SB 375. As regional planning agencies approve their "Sustainable Communities Strategies" under SB 375, a whole new set of regional housing concerns will emerge and the next round of housing element review will ramp up. Will HCD be ready? And will the agency be sufficiently plugged in with the Air Resources Board and other state agencies that are driving SB 375 implementation?

But maybe asking whether HCD will have the resources to do things the same way the agency's always done them is the wrong question. Framing the issue that way reduces the discussion unfortunately to the question of how much money HCD is going to get out of the General Fund in any given year. The answer for the foreseeable future is: Not much. So maybe it's time to revisit the whole question of what a housing element is, what it is supposed to accomplish and consider making changes to the law that will make it both more effective and less expensive for the state to administer.

When I teach classes about planning in California, my standard joke is that the housing element law is just strong enough to be annoying and just weak enough to be useless. Not everybody thinks this joke is funny, least of all my longtime friend Cathy Creswell, who will point to any number of communities where sites for high-density housing have been identified and rezoned, thanks to state review.

Fair enough. But the housing element law has always been caught in the crossfire of all kinds of political attacks and counter-attacks. The housing element is the only part of the general plan subject to state review, which makes it an especially annoying part of life for local planners. (And, anyway, if the state is going annoy the locals by reviewing general plans, why just housing elements?) It was originally designed as a "fair housing" exercise (and must deal with housing for a whole series of special populations, such as the homeless and farmworkers). Yet increasingly HCD focuses on the supply of housing -- hence the concern about high-density zoning rather than just its distribution. 

And there's a constant battle in Sacramento more like a stalemate between affordable housing advocates who want to box the local governments in, and the local governments that don't like state control. As an elected official, I have to say that a mere explanation of the housing element law almost always leads to this question: "How can the state tell us how much housing to build?"

Finally, and perhaps most important, it's a law that focuses on planning for housing, not building housing. It's a topic of ongoing debate whether good housing elements actually lead to more housing. HCD claims that this is so; while some independent research, including from the Public Policy Institute of California, claims that this is not so.

As he had with redevelopment, Gov. Brown has the opportunity to use the budget crisis to reform the way the housing element law works. Housing element activity will be brisk in the next few years; yet there is no scenario that would suggest HCD will wind up with enough money to review housing elements in the manner is has been done in the past. If the state is going to be effective in overseeing how the locals deal with housing, it's going to have to be done differently. But how?

This is where the stalemate makes it tough. HCD's traditional approach has been to act as a pretty persnickety regulator, telling the locals almost literally which words to change in their draft housing elements. This is an understandable approach, given that many local governments have proven untrustworthy on housing in the past and that affordable housing advocates in Sacramento are always looking over HCD's shoulder to make sure the law is implemented clause-for-clause. But it won't fly in the future, if only because the state can't afford it. 

So it's time for the Brown Administration to think about several reforms, including the following:

? Stripping housing element review down so that it focuses on a few key issues, like adequate sites for multifamily housing.

? Making it easier to transfer housing obligations from city to city, at least within the same housing market.

? Tying all housing funds over which the state has control including redevelopment housing setaside money to the goals in the housing element.

? Switching to a performance-based system, so that localities are held accountable for housing constructed rather than housing planned for. The locals always squawk that they can't control the market as to when housing actually gets built, and that's fair enough. But comparing housing entitled and housing built compared to some regional average is certainly reasonable.

It's possible that even the budget crisis will not force reform in the housing arena. After all, in the end the redevelopment issue this year was not about reform but about money, even though the administration promised reform at the beginning. But if reform doesn't come now, when HCD is up against the wall on the budget, then I don't know when or how the stalemate will ever be broken.