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The HomeWork: April 28, 2020

April 29, 2020

Welcome to the April 28, 2020 Main Edition of The HomeWork, the official newsletter of California YIMBY — legislative updates, news clips, housing research and analysis, and the latest writings from the California YIMBY team.

The Legislature continues to recess, likely until May 11th. When they return, expect a focus on COVID-19, housing, homelessness, and wildfires. While the current health crisis will no doubt loom large over their proceedings, the state’s science advisors are concerned that unseasonably low levels of winter rainfall have set California up for another disastrous year of wildfires.

Significant uncertainty still exists about what the legislature will do, what deadlines will be, and what the future of the legislative session looks like. Friday, April 24 was a deadline for proposed legislation to get out of policy committees for many bills. No rule waiver has been issued, but our understanding is that waivers will be granted when the Legislature reconvenes. It is unclear how many of the over 1,100 bills that died on Friday will come back this year, though.

To hear more about California YIMBY legislative priorities, contact Louis Mirante at louis@cayimby.org.

Competent governance can stop coronavirus, not suburban sprawl

As the coronavirus has ravaged countries across the world, many of our leaders have struggled with how to respond to this growing pandemic. Too many of our governments waited too long to acknowledge the scale and speed of the threat, and muster the resources appropriate to the task.

But in several important cases, governments have been fully prepared — with resources, with expertise, and with the personnel and health infrastructure in place to protect the well-being of their citizens, and insulate their economies from the worst-case outcomes.

Incidentally, most of these places are cities.

Trump Seeks a Return of Discriminatory Lending Practices

Like so many of the horrors we’ve faced under the Trump Administration, yet another relic of 20th Century segregation is once again rearing its ugly head: Redlining. Trump officials have proposed a change in an obscure but important banking law that could undermine decades of progress incentivizing re-investment in low-income neighborhoods — particularly communities of color that suffered from historic efforts to undermine their economies under legal segregation and property appropriation.

In response to the Trump Administration moves, which target a rule change in implementing the Community Reinvestment Act (CRA), California Attorney General Xavier Becerra and 21 other state Attorneys General submitted a comment letter that offers a powerful reminder that structural racism persists in U.S. housing policy, and there is an active element of Trumpism that seeks to reinforce it.

Here are the key takeaways:

The CRA, as originally intended, is a vital source of credit and finance for affordable housing in working poor and communities of color, which have historically been shut out of mortgage lending and capital investment.
The Trump Administration’s Proposed Rule would dangerously undermine equitable lending practices under the CRA, and weaken enforcement.
The apparent goal is a “back to the future” environment where bankers and other sources of capital favor white-owned businesses and communities, while low-income neighborhoods and entrepreneurs of color face additional hurdles to securing needed investment.

Housing and Exclusion in Massachusetts

Why is housing more expensive in some suburban enclaves than city centers, and why isn’t subsidized housing equitably distributed? In California, we’ve been tackling these questions for years, but there is much to be learned from other states. In Massachusetts, a law known as Chapter 40B empowers a state-level board of appeals to overturn local land-use decisions that are found to disadvantage subsidized housing projects.

It’s a somewhat narrower, but statutorily powerful cousin of California’s Housing Accountability Act, which California YIMBY has worked to strengthen in recent years. A new study by Edward Goetz and Yi Wang at the University of Minnesota evaluates the program’s strengths and weaknesses.

Here are the key takeaways:

Over the past two decades of the program’s existence, more subsidized housing has been built in Massachusetts—not a lot, but a marked increase in the statewide housing stock.
More than half of those subsidized homes were built in the Boston metro area, but the distribution was highly inequitable.
Cities with a greater white population saw the smallest increases of subsidized housing.

How to Beat the High Cost of Construction

Our friends at UC Berkeley’s Terner Center for Housing Innovation have offered another installment in their “Cost of Building Housing Research” Series. Amid global pandemic and economic crisis, it may be difficult to see why construction costs matter, but as California (like most states) faces a fiscal cliff and a devastating recession, all the barriers to housing affordability remain in place — and may even get worse.

One of the March 2020 papers, “The Hard Costs of Construction” by Raetz et al, makes a case for innovation and regulatory streamlining to balance out higher costs of labor and materials in residential construction. As Director Carol Galante notes in a recent blog post: “How we plan now for this long-term disruption will set the stage for the arc of the recovery, and who will benefit.”

Indeed, even as household incomes fall and unemployment rises, the cost of housing may continue to grow out of reach for working-class Californians. Here’s why:

Hard construction costs per square foot rose by 25 percent over the past decade.
Some of the reasons for these increased costs are good: For example, prevailing wages raise the cost of labor, but provide employment stability in a volatile industry.
As certain fixed costs get more expensive, policymakers should focus on increased efficiency in the construction industry by streamlining the permitting process and supporting new construction technologies such as mass timber.

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