California suffers from an enormous shortage of housing and each year it gets worse. I’m not talking about low-income housing. I mean any kind of housing—low income, moderate income, urban housing, suburban housing—in fact, all kinds of housing except those at the very most expensive side of the housing equation. Each session in the legislature, there are a bunch of bills thrown into the hopper to ease the housing shortage and each session those housing bills have died. This has happened year after year but at some point we reached a critical mass, meaning that things have gotten so bad and real estate, including rentals, so expensive that the legislature finally acted and passed a couple of housing bills over the objection of just about every city, every small town and probably just about every neighborhood. The California League of Cities thought the bills were terrible, saying they took away local control. They were correct in one regard, that the bills take away a bunch of local control. It’s simple. No locality anywhere in this state wants more density and more traffic. Besides, if you don’t let people build multifamily duplexes, four-plexes, apartments and condos, it creates a shortage, which is strangely enough what we have, and that means the value of existing real estate goes up. So, those of us who already own real estate see the value of their properties jump while affordable rentals get harder and harder to find. Perhaps one of the downsides is that some parents are finding their getting-close-to-middle-age “kids” getting their PhDs and then moving back into their old bedrooms.
The legislature took a couple of major-sounding steps and passed two important housing bills that it hopes will lead to an increase in the supply of housing. I say “major-sounding” because often legislative solutions have a bunch of loopholes built into them and it takes several years before you actual find out what works and what doesn’t. The first bill is SB 9 (which means Senate Bill 9) and what it does is allow duplexes to be built in an R-1(SFR—or single-family residential) zoned area, and it also allows a lot split of that R-1 lot so that you may actually build a total of four units on that lot. That is a gross over simplification of the bill but you can be absolutely positive of certain things. First, it’s going to take several years of expensive litigation before it has any substantial impact on the housing supply because I know every little town like Malibu is going to create dozens of little rules and policies to try to block it and for several years will succeed.
The second piece of legislation is even more interesting and may turn out to be the one bill that really changes things. It would allow construction of up to 10 units in what they call transit rich areas, in urban infill areas. I again have grossly oversimplified a very complex piece of legislation but the idea is if you have something like light rail nearby or perhaps even bus services and people can take public transit and perhaps you don’t need parking spaces for autos. Think of developers buying an old commercial building on Pico Boulevard or perhaps even Wilshire Boulevard and building some small 10-unit building or buying two adjacent lots and building a 20-unit apartment building. Or how about along Pacific Coast Highway, which has the old 534 bus and building more residential there? However, it’s going to take years and will keep all of the real estate litigation lawyers in a fine style.
There is really a larger overall picture here and that is that America is changing, for a variety of reasons. Most of our post-WWII zoning rules were devised it what I call the “Betty Crocker” period of America. Daddy went to work and mommy stay home, took care of the house and the children and had a martini waiting for daddy when he got home. Everyone want to live in a single family residence, with a front lawn, a setback, a garage for the car, separated from the nastier parts of urban life like dirt and crime and those people you didn’t wanted to be associated with. That all didn’t happen accidentally. America was exploding and expanding, with educations financed on the GI Bill and homes financed with no down payment VA loans or FHA financing. Mom was supposed to look like the gal on the Betty Crocker box and the family was straight out of the TV show “Father Knows Best” or the “Donna Reed Show.” If you don’t know what that refers to, ask your parents about it. It, of course, was all a fantasy but a half-century later it still feels good. Still, America has changed. We have Uber and Lyft. The next generation doesn’t want half the stuff my generation wanted; in fact, many think this consumerism is downright silly, except for all the electronics of course. All those parking lots downtown sit half-empty because people are working remotely and have absolutely no intention of going back to five day a week, 9-to-5 work, and if the employer insists he can take his job and stuff it. The autos will soon all be self-driving, you’ll be getting first run movies on Netflix and we will all laugh about boxes of popcorn that cost $7.50 in the movie theaters. In fact, it’s only a matter of time before movie theaters as we know them are sort of gone.
But some things never change. Everyone has to live somewhere even if it’s a tent under a freeway and we’ve got to do something to radically increase our housing stock. Whether the politicians have the guts to make the changes I simply don’t know yet, but we will find out within the next few years.