'There isn’t one silver bullet.' State and local experts highlight California’s housing shortage causes

By Kayla Sherwood, senior communications and media manager

“We can’t keep passing hundreds of new housing bills and expecting a different outcome.” That was the main message from Cal Cities Senior Director of Legislative Affairs Jason Rhine at a recent Little Hoover Commission hearing on California’s housing supply.

The hearing was part of the commission’s study on creating homeownership opportunities for low- and moderate-income households. The group agreed that there are still many hurdles to building new housing in California — but disagreed on where to go from here.

Rhine highlighted two major barriers to implementing new housing laws: over-legislation and a lack of ongoing state funding to spur housing construction.

“It is nearly impossible for cities to implement the 400 housing laws passed since 2017, especially when those laws are constantly changing and competing against each other,” said Rhine. “If we really want these laws to make a difference, cities need time to implement them at the local level. And if we really want to see homes being built at a rate that moves the needle, we must have a permanent line item in the state budget.”

Placer County Supervisor Bonnie Gore underscored Rhine’s comments. She also agreed that accessory dwelling unit and environmental review exemptions have been helpful in spurring some development. However, the units produced so far are a drop in the bucket when compared to the state’s overall need.

Much of the discussion among commissioners and panelists — which included the heads of state agencies — centered around the complexities of the housing market. Rhine and Gore reminded the commission that local governments can plan and encourage development, but cities and counties do not build homes. Over 95% of cities have a compliant housing element, but developers are not building homes at the level needed to meet the state’s housing goals.

State experts alluded to the need to look at other factors outside planning that influence the housing market. “We've largely won the fight to plan for housing — now we need to win the fight to build it,” said Special Assistant Attorney General Alex Fisch on how the state can use its legal power to spur development.

Gustavo Velasquez, the director of the Department of Housing and Community Development, acknowledged that labor shortages, utility hookup delays, building code requirements, and complicated affordable housing financing structures can all slow down housing construction.

“There isn't one silver bullet that gets us to scale the level of housing that is needed in the state of California,” Velasquez said. “The percentage of what needs to be produced every year is just marginal in comparison with the need.”

The head of California’s Housing Finance Agency, Tony Sertich, also highlighted how there is zero incentive for market-rate developers to build homes at affordable price points.

This hearing was the second in the commission’s study on expanding housing supply and creating homeownership opportunities for Californians of moderate and modest means. The commission will develop a set of recommendations for the Governor and lawmakers once the study is complete.