Home-building has not kept up with job growth, causing a shortage of affordable housing. Possible solutions being pushed in the California state senate could pack cities like Scotts Valley with dense housing.
The dynamic economy of Silicon Valley produces a wealth of high-paying jobs. Cities in the region approve giant tech campuses, but they neglect to approve additional housing to go with the thousands of jobs created.
“Cupertino approved their Apple campus, a circular building one mile across with as much square footage as the Pentagon, but didn’t approve a single new housing unit to go along with it,” said Scotts Valley City Councilman Jim Reed.
Similar story for Santa Clara and other high-tech hotbeds. Why don’t cities build enough housing?
“Because it doesn’t pay,” said Reed.
Housing produces property tax that mostly goes to the state. Cities like Scotts Valley only get 6.5% of the property tax their property owners pay — not enough to fund the police, firefighters, streetlights and sewers needed in neighborhoods, Reed said.
In a push to increase the amount of affordable housing available, state Sen. Scott Wiener (D-San Francisco) has proposed laws that would effectively eliminate single-family zoning across much of California.
Wiener’s proposals and similar plans in other states prompted a response from the White House.
In an article titled “We’ll Protect America’s Suburbs” in the Wall Street Journal last month, President Trump and Housing Secretary Ben Carson vowed to stop regulations that would “compel the construction of high-density ‘stack and pack’ apartment buildings in residential neighborhoods.”
One of Wiener’s proposals would have permitted apartment towers of up to eight stories close to transit centers, Reed said, with local city councils having no ability to stop them. Other bills would have permitted both duplexes and splitting single lots into two that could each host a duplex in areas zoned only for single-family homes with virtually no local oversight.
While Reed applauds state efforts to ensure cities build their fair share, he says that making these approaches “by right” would silence local voices and eliminate local control, leading to bad outcomes.
“What would happen if streets that can barely accommodate one unit per parcel now have four units per parcel?”
Congestion. Major congestion.
“Fortunately, these heavy-handed approaches were defeated in the Legislature, but some just barely,” Reed said, “and advocates are bringing them back.”
Reed said that in addition to punishing cities if they don’t build enough housing, state law should help cities that want to.
Redevelopment agencies (RDAs) used to build affordable housing, but they were eliminated in California in 2011 as the state sought money to cover deficits after the financial crisis.
The RDAs of old provided significantly higher returns of tax dollars back to cities. Scotts Valley’s RDA provided 31% compared to 6.5% for non-RDA parcels, but it could only be used for specific purposes, such as building affordable housing.
“This financing was getting units built across the state,” Reed said. “We needed more of it, not less.”
Local control of money dedicated to affordable housing, as was done through RDAs, is a better way to make progress than forcing cities like Scotts Valley to permit dense housing in neighborhoods built for single-family homes.
Mark Rosenberg is a California Registered Tax Preparer (CRTP) in Scotts Valley. He can be reached at 831-439-9910 or ma***********@gm***.com
