Get CP&DR
  • Become a subscriber
    Get access to all CP&DR premium articles including the past article archives.
Connect with CP&DR

facebook twitter

Follow us on Facebook and Twitter

Articles by Category
Solimar Research

Stepping Down from HCD, Metcalf Touts State's Increasingly Aggressive Approach to Housing

Josh Stephens on
Nov 6, 2019

For just over three years, Ben Metcalf held either the most unenviable or most important job in California – or both. He led the Department of Housing and Community Development as the state’s housing crisis went from bad to worse, with housing costs rising statewide and at every price point and new development has lagged. He began just after the LAO released its 2015 report calling for 100,000 annual additional new units statewide, and his tenure spanned the gubernatorial transition from Jerry Brown to Gavin Newsom, who came into office calling for the development of 3.5 million new units.

Metcalf stepped down in September to start his own consulting firm. Before he did, he released a provocative open letter reiterating, among other messages, his demand for cities to welcome new housing and for them to view the housing crisis as a civil rights crisis. CP&DR’s Josh Stephens spoke with Metcalf about his tenure at HCD and the housing trends that the state’s planners will likely grapple with for years to come.

Ben Metcalf
Ben Metcalf

How do you describe the housing crisis and how does it differ now from what you perceived four years ago?

One answer is just that the number of people -- the number of human beings whose lives are impacted in significant ways by housing affordability -- has increased in absolute terms. The key metric that I fall back on is the share of lower-income households paying more than 50 percent of their income. That number has gone up and up.

The other piece, which I think is equally important but sometimes overlooked, is the way in which the housing crisis has contributed to the more fundamental issues of income inequality and forgone economic mobility. I'm thinking about the secondary consequences of folks, particularly communities of color, millenials, or children growing up poor, who are increasingly getting locked out of the places where the jobs, good schools, and transit are, decreasing the diversity that has historically made California strong and limiting folks’ ability to move up the economic rungs.

How do you assess your tenure in terms of policies and programs?

The really exciting news is that the state's Department of Housing and Community Development is finally showing up with a knife – a sharp, shiny, youthful knife – to the gun fight. There now are significant tools that are being brought to bear. It's still not by any means commensurate with the scale of the challenge, but it has made the department relevant and impactful.

One is just very obvious: It's just a huge amount of money: Propositions 1 and 2; the cap-and-trade dollars; other state monies for homelessness. The state is deploying loans and grants on a heretofore unheard-of scale to actually get affordable housing built and making sure that the programs are doing it in thoughtful ways that facilitate mixed income communities, support our climate change goals, and are using best practices around ending homelessness.

The second piece, which really took off over the last few years, is reframing the conversation around local control, to say to local governments, “we're not afraid to deploy state power and regulatory oversight to get to the outcomes we need.” Whether that's handing down much higher regional housing needs allocation targets to metropolitan planning organizations over the last couple years; or whether that's leaning a lot more on things like ministerial approvals for certain kinds of multifamily housing or accessory dwelling units; the state is now obligating cities to do a better job on zoned capacity and giving certainty back to developers.

On the flip side, there’s accountability to achieving those outcomes: the state will hold you accountable to at least being minimally compliant with these state programs and goals and laws. Whether that means yanking compliance and taking away access to housing and transportation grants or ultimately sending the state attorney general after them, that's a wholly new kind of conversation that we were not having four years ago.

One of your final acts in office was to hand SCAG a much bigger number – 1.34 million -- than many of its member cities wanted. Could you comment on that number and on how you think it's going to play out since we know that SCAG is going to be fighting it?

I think there may be a small amount of fine-tuning in the final calculation [editorial note: HCD revised its final number to SCAG by around 4,000 units following this interview]. Ultimately the state is very confident in its projections and has statutory authority to prevail over that appeal. I don't think these numbers are unreasonable. They come from changes to state law that very reasonably said, in our demographic projections, we need to be thinking about the worst-case housing needs. We need to be factoring in overcrowding. Those are two of the big new calculations, and that's just common sense.

I don't want to downplay the challenges that SCAG faces. There are challenges that they're going to face in terms of reconciling these growth targets with the planning that they've already done with, for example, the regional transportation plan. That does require real work on their end to reconcile some of the models.

The number for SCAG is a fraction of the 3.5 million that's often cited by the governor. Is that the correct number?  

The 3.5 million number was a goal that the governor set during his campaign. It's not the case that HCD is de-constituting that number and then building it back up. 1.3 million to SCAG isn’t enough to get 3.5 million for the state.

The state has a demographic model that's been updated and informed by the Department of Finance over a number of years. I think we need to separate what the governor has set as a goal versus what the machinery of the state is going to be able to effectively hold jurisdictions to as matter of law, which may be a higher or lower number. That's not to say that mayors and city council members shouldn't aspire to plan for their share of a larger number such as 3.5 million and consider the state’s number as a floor.

When you're in touch with the mayor of Encinitas or Palo Alto and you cite the millions of units the state needs, does that move them?

I think it does because, especially having come from the governor and in the context of moving into our new RHNA [Regional Housing Needs Allocation] cycle, the conversation has shifted. Yes, a mayor is going to fight back and say they want a lower number. But that's already conceded the point, which is they have to take a number and that number has to be nontrivially large. I think that's the way in which it's been helpful. It has shifted the conversation to one where growth is more a given and it's not a question of "my city doesn't need to grow; my city is built-out." It's now a question of, “how much are you going to grow by?”

In the open letter you wrote a few weeks ago, you have a provocative quote about Cupertino at the top and you make some impassioned arguments about segregation in California.

I think we need significantly more housing supply, but we also have to be thoughtful about where that supply happens. I think we've gotten smarter over the last decade at the state level about thinking about that new supply in the context of climate change.

I don't think that we've spent nearly enough time thinking about the ways in which our growth patterns are perpetuating or reinforcing policy decisions that were made at the local, state, and federal levels over the last half century or century that, at the time they were created, were implicitly or explicitly put in place to achieve ultimately racist goals of keeping out certain kinds of people. So I do think it's worth it both to reckon with those historic policies, and think about the ways in which, if we don't take action to correct them, they continue.

Second, back to what I said at the beginning of our conversation, we have to think about income inequality. We have to think about the ways in which land use decisions will either make it easier for kids growing up in certain places in California to move up into the middle class or impede their ability to access what they need to succeed. If what we want is a California that is diverse and has meaningful opportunity for everybody no matter what their starting point in life and wherever they land on the income spectrum, we have to have that as part of the dialogue too.

Do you think the Cupertinos can read that letter or have that epiphany about the moral component of their land use patterns?

I would hope so. That's certainly why I wanted to put pen to paper.

I think there's another story though, which is actually more nuanced and may be more productive, which is to try to find the silent majority in communities like Cupertino who value diversity and think fondly of the community that they moved into 20 or 30 years ago, which really did have accessible entry-level housing.

I think there is an appealing story there, which is, “the vibrant community that you once took for granted is becoming increasingly unavailable.” And the solution is not to shut down growth and try to wish your way back to a mythic earlier day, but rather to embrace a certain kind of growth that is facilitative of people with different incomes and backgrounds being able to stay and thrive in your community.

The way we make a city like Cupertino work is by making it easier for folks to do garage conversions, create accessory dwelling units, develop quadplexes on corner lots and commercial boulevards. That is actually how you get the kind of community that you want. My hope is that mayors, city councilors, and civic leaders can help community members understand that responsible growth is necessary for maintaining a vibrant, mixed income, inclusive community that is welcoming and supportive to all. The answer doesn’t have to be a moratorium.

You mentioned the silent majority. There's been a vocal minority that coincides with your tenure of the YIMBY movement. What do you make of that?

The YIMBY movement is great. It's been fantastic to have that voice in the mix. I think that what they have offered is the voice of a swath of community members who don't have an economic interest in this. They're not themselves developers. They're not themselves established business interests. They are folks who are saying, “hey, we are a part of the community and we want a community that has more housing opportunities.”

I think that's been helpful because historically only developers show up to planning meetings in support of their project and the only community members that are there are speaking against them. And I think the YIMBY advocates at the local grassroots level can provide a counter-narrative that is going to be really helpful.

I would say that, like any emergent movement, they've had some challenges communicating their voice, certainly at the state level. And I think they've gone through a healthy period of maturity so that they can channel that energy and that coalition-building in ways that are constructive and actually influential. And I think they're now poised to be significant players at both the state and at the council, whereas in the earlier days it was really catch-as-catch-can.

Your tenure also coincided with the absence of redevelopment. What impact did that have? And what do you think of the emerging proposals to revive it to an extent?

From a housing perspective, obviously the biggest consequence has been the loss of the affordable housing set-aside funds. Before redevelopment went away, there was more money going into affordable housing in California from redevelopment than from all the federal government's affordable housing programs combined.

What I’ve also seen, though, has been a painful loss of capacity that came from the collapse of redevelopment. A lot of cities had built up pretty sophisticated teams of planners, housing staff, and others who were helping just get stuff done at the local level. That money both paid for a lot of staff time and also got cities into the game proactively helping development to happen.

Partly what we've tried to do at HCD over the last couple of years is build back some of that staff capacity and sophistication for folks to be able to more thoughtfully facilitate affordable housing and mixed income and mixed use communities. And then we've been building back more affordable housing investment.

In terms of, do we need to bring redevelopment back? I think tax increment financing has been a key component of a lot of investment. It's a standard tool in the toolkit across the country. Whether it looks like the old redevelopment or it builds off something like the Enhanced Infrastructure Financing Districts, I'm kind of agnostic about. But I do think it's worthwhile for the state to put some skin in the game. I think part of the problem with what we've attempted over the last few years is that the increment that a city can collect has been limited just to the city and sometimes the county share of revenue. Trying to figure out a way to get the state implicated for at least certain kinds of projects makes really good sense to me.

What can say now that you are not a public employee that you weren't able to say or you were in your position?

We’ve spent a lot of time over the last few years talking about the solutions to the housing crisis that we're in. There is no silver bullet and it requires a multipronged response. You have to think about lowering costs, increasing zoned capacity, facilitating regulatory certainty, deploying more affordable housing, thinking about renter protections... the list goes on and on.

That's kind of how we structured the statewide housing assessment, the report that we did in 2017. That was intentionally a multipronged focus that formed the housing package in 2017 to a certain degree. It informed where governor Newsom came out in 2019.

But I fear that we are inadvertently overwhelming our collective capacity to deploy when we try to do everything all at once.

One of the things that I would love to see the state do differently as we go forward is to sequence out some of these pieces of the puzzle to tackle intentionally, starting in 2020. We can put off some other things for 2021 and maybe a couple of things for 2022. I think everybody is trying so hard, whether they're in the legislature or the administration, to take a whack at this issue that we spread ourselves to thin trying to negotiate out, you know, 200 housing bills or whatever.

I feel sympathetic also to folks out there in the field, the local planners and housing reps whose heads are spinning, just trying to keep up with everything going on at the state. And they're really hungry – they want to deliver, they want to make change. They believe in this work, but they're just having a hard time keeping up. I think one of the things that would be useful for us all going forward is to be a little bit more strategic about taking on fewer things in a given finite period of time and focusing more on the brass tacks of implementation.

How do you feel about SB 50 and especially about the prospect of its revival in just a few months?

My guidance to state leadership would be to pick a handful of big plays that they want to do next session and just focus on them and try and slow down everything else. But yes, I think SB 50 or something like it ought to be in the mix— we would benefit from a state remedy that directs cities to ensure there's a significant level of capacity around transit infrastructures and in our high-job areas.

I don't know that SB 50 as drafted in the last session has to be exactly the way to do that; there are other ways to get to a similar outcome. But whatever we do, we do need to be doing it in a way that is thoughtful and supportive of the housing element/RHNA work that's also going to be happening at the same time in California cities.

You implied that planners’ heads may be spinning from all these new policies and so forth. Any parting advice for them?

This is a time when a lot of change is happening — good change. I think it behooves folks at the local level to not rebuild the wheel every time. The more we can lean collectively on places and organizations that facilitate best practices, the better off we'll be -- whether that's working with groups like the League of Cities or the California chapter of the American Planners Association, or reading CP&DR. We need to avoid being 540 different cities each doing its own thing and try and get more standardized products, standardized programs, standardized policies — everybody will be much better off for that.

What's next for you?

I've put up my own shingle and I'm looking forward to doing some consulting work. My interest is in continuing some of the policy stuff that I've been doing at the state level, but having a little bit more space and freedom to explore it while working hands on with promising models for housing practice in the public/private space. In the same vein as my article that came out a couple of weeks ago, I'm particularly interested in this topic of how we develop housing policy and practice in ways that are facilitative of mixed income and economic mobility. I am hoping that I can use my practice going forward to elevate the conversation a little bit and to make sure that we are not thinking small, but using this moment to drive positive change forward.

Conducted in October, this interview has been condensed and edited for clarity.