CALIFORNIA FOCUS
FOR RELEASE: TUESDAY, MAY 10, 29, 2022, OR THEREAFTER
BY THOMAS D. ELIAS
“IS THE BIG
HOUSING CRUNCH MOSTLY FICTION?”
In some
parts of California, there is definitely a housing crunch: small supplies of
homes for sale, prices that escalate even when population has apparently
stabilized and high prices that exclude most Californians as buyers.
But a
massive, multi-million-unit shortage? Maybe not. At least, so suggests a scathing
springtime report from the non-partisan acting state auditor.
“The
(state) Department of Housing and Community Development (HCD) has made errors
when completing its needs assessments because it does not sufficiently review
and verify data it uses,” the report deadpanned.
Maybe
that’s why as he campaigned in 2018, Gov. Gavin Newsom insisted California
would need 3.5 million new housing units within 8 years just to keep up. That
would have been more than 400,000 homes, condos and apartments every year, all
supposedly getting snapped up as increased supply caused prices to fall.
None of
this has happened. Housing construction never has topped 110,000 units per year
during Newsom’s tenure, and a good share of those stand vacant. Newsom’s
administration now says California needs 1.8 million new homes by 2030, a huge
drop in his needs assessment after less than four years. What happened to the
other half of what Newsom said was needed? Maybe the need never existed.
Those
earlier numbers stemmed in part from expert estimates that California’s high
growth would continue indefinitely. We now see that is not automatic. Fewer
newcomers mean less need for new homes.
But the
auditor’s report suggests even the 1.8 million housing units Newsom now says
are needed by 2030 may be a gross exaggeration. One look at all the vacancy
signs on apartment buildings and condominiums in major cities informally
suggests this. But HCD does not lower its estimates of need.
The
department’s regional need figures, in turn, produce threats of lawsuits from
appointed state Attorney General Rob Bonta against city after city, demanding
they grease development permits for hundreds of thousands of new units. The
demand against Los Angeles, for example, is that it immediately OK about
250,000 new units. It’s as if Bonta has not seen the auditor’s report
indicating the figures he uses are flawed. If he hasn’t read it, he is
incompetent. If he has, he is dishonest.
How real
are the numbers on which the estimates and the resulting legal threats rest?
Here’s a bit more of what Auditor Michael S. Tilden reported in a dramatic
document so far studiously ignored by politicians:
“HCD does
not have adequate review processes to ensure that its staff members accurately
enter data that it uses in the needs assessments.”
When means leading state
officials continually spout unsubstantiated, possibly phony, estimates of
housing need. This should discredit any lawsuits Bonta threatens against
cities.
For the
auditor’s finding means the state housing agency estimates have no proven
basis.
All this
is vital to California’s future because the estimates are already forcing
cities to approve much more housing than they need, reacting to lawsuit threats
and the possible accompanying loss of millions in state grant money.
That, in turn, could produce
future slums, or at least thousands of future short term rental and temporary
corporate housing units. But it won’t help prospective home buyers get into
markets where the median price now tops $800,000, in part because construction
of just one average California unit costs more than $500,000.
The
auditor in effect says that when Newsom and Bonta cite housing need figures,
they essentially spread fake news.
For sure,
when the state bases policy on unreliable or imagined information, it can do
great harm. Just that appears likely soon, as passage of laws like the
densifying 2021 measures known as SB 9 and SB 10 rested completely on HCD’s
unsound information.
Far
better would be for the state to concentrate instead on making housing out of
converted office space vacated during the pandemic. That, at least, would not
ruin any current neighborhoods.
In short,
California will suffer irreparable long term harm if it keeps basing housing policy
on false or unreliable information.
-30-
Email Thomas Elias
at tdelias@aol.com. His book, "The Burzynski Breakthrough: The Most
Promising Cancer Treatment and the Government’s Campaign to Squelch It,"
is now available in a soft cover fourth edition. For more Elias columns, visit www.californiafocus.net
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