Superintending Local Constraints on Housing Development: How California Can Do It Better

Abstract

Over the past few years, the California legislature has substantially reformed the state’s ambitious, but questionably effective, “housing element” law. The law requires local governments to periodically adopt a state-approved plan, called a housing element, through which the local government both identifies sites that can accommodate the locality’s share of regional housing need, and mitigates or removes constraints on the development of housing. This paper offers recommendations for how the Department of Housing and Community Development (HCD) could use its new authority to improve housing elements’ analysis of constraints and the associated programs to mitigate or remove them. A fundamental challenge is that HCD has no reliable data about the severity or prevalence of local governmental constraints, data which would allow cities to be compared to one another and benchmarked against the (few) standards that already exist in state law. Our response runs on two principal tracks. First, we recommend that HCD rebuttably presume that local governments in expensive areas have substantial governmental constraints if their rank by housing price (rent) exceeds their rank by rate of housing production. These local governments would be expected to provide regulatory accommodations when actors with better information about constraints—namely, developers—show that sites which the local government has represented as available for development are impractical to develop at their nominal capacity. This is a way for HCD to achieve mitigation of constraints even when it’s very hard for the department to see or evaluate them. Second, to pinpoint sources of constraint and assess compliance with applicable benchmarks, we propose that HCD establish several new reporting and analytical requirements. The cumulative effect of local constraints should be assessed by simulating the entitlement of “prototype projects” on a random sample of parcels. Local governments also should be required to upload standardized, geocoded zoning layers and parcel characteristics; to track and report legally salient milestones for actual development applications; and to complete a questionnaire about certain types of constraints which the other approaches are likely to miss.