California sends mixed messages
on housing mandates
by Matt Fleming | June 22, 2023
Is California inching towards solving the housing crisis? Not exactly. But the same government that has perpetuated the crisis is at times taking modest actions to get out of the way.
One of those ways began in earnest earlier this year through recently enacted legislation to curb the power of local governments to impose parking requirements on new development, which will lower the cost of housing and reduce an onerous burden that often blocks development.
But isn’t parking essential? Yes, but not for everyone.
This law doesn’t prevent developers from adding parking, but simply gives them the discretion to add it as the market sees fit while preventing local governments from requiring parking on new developments within a certain distance of public transit. Often, local parking rules require enough spots for peak usage – thus leaving empty parking lots most of the time.
Though it might not feel this way to anyone who regularly pays a street sweeping ticket, there’s actually an abundance of parking in many of California’s cities. In fact, COVID exposed the surplus parking situation throughout the state as parking spaces were turned into outdoor seating areas.
According to an analysis of Assembly Bill 2097 provided by the author, Laura Friedman, a Glendale Democrat, there are 18.6-million parking spaces in Los Angeles County, which is nearly two for every resident.
Those parking spaces and the requirement to add more come at a cost. According to Friedman, a new parking garage costs between $24,000 and $34,000 per space. Residents absorb this cost when purchasing or renting a unit whether they use the parking or not, while the garage takes up space that could be used for more housing. Many useful projects never get off the ground because the parking rules add too many costs.
There are consumers who are happy to forgo parking to save a buck and others who aren’t. Presumably, AB 2097 will eventually sort them out. Its passage was met with widespread approval among housing advocates.
“California’s cities don’t have a parking shortage, they have a housing shortage,” said Matthew Lewis, director of communications for California YIMBY (Yes In My Back Yard), who reiterated Friedman’s concerns about the imbalanced parking-to-resident ratio. (See the Free Cities Center’s video interview with Lewis, as he discusses new California laws that allow higher-density construction in single-family neighborhoods.)
“AB 2097 brings these onerous parking mandates to an end, and lets builders decide how much parking they want to provide for their customers,” Lewis added. “It’s a win/win for housing abundance and affordability, and for ending costly and unnecessary government parking mandates.”
The argument against AB 2097 fell to local governments that wanted to preserve local control in planning decisions. Newport Beach wrote that “cities, not the state, are best suited to determine the parking needs of development projects in their jurisdiction.”
The League of California Cities added that AB 2097 would not alter consumer behavior and many residents would still not use public transit, thereby increasing parking demand and congestion. While there might be an element of truth to this, it simultaneously ignores market dynamics.
AB 2097 just went into effect this year so there really isn’t much data to demonstrate its effectiveness, but industry experts expect it to be positive. “It’s too soon to tell, but this is very helpful,” said Cornelious Burke, vice president of legislative affairs for the California Building Industry Association.
Burke pointed to many other things the state could do, however, to further lower the cost of housing and spur development, like lowering fees on developers. Impact fees, for example, are tacked onto development to help pay for public facilities. A 2019 study by experts at the Terner Center at UC Berkeley found that while these impact fees varied by jurisdiction, they typically cost around $19,100 per unit in multifamily development and $29,600 for single-family units.
Contributing to the cost of public facilities sounds reasonable enough until one considers plenty of other sources of revenue that help pay for public facilities, like property taxes, sales taxes, income taxes and usage fees.
Other suggestions Burke offered include reforming the California Environmental Quality Act (CEQA), which for years has been the primary weapon used by NIMBYs, unions, environmentalists and others to block development, and speeding up land use approval times.
Ironically, as lawmakers clamor for ways to make housing more affordable and accessible, they also find ways to do the opposite. For example, in 2020 the state began requiring solar panels on top of all new developments, which added approximately $10,000 to each new single-family housing unit.
So why are state lawmakers reducing costs of housing while simultaneously increasing costs that price out consumers? Because the state’s environmental agenda is at the core of so many decisions.
For years the state has sought to curb greenhouse-gas emissions in myriad ways, from banning gas-powered lawn mowers, to regulating cow flatulence, to reducing vehicle miles traveled, to creating a vast market of carbon emission credits. For as much as AB 2097 is pro-housing, it’s equally about the environment.
“Experts believe (the parking requirement) encourages car dependence and discourages mass transit usage, increasing vehicle miles traveled,” Friedman wrote in her AB 2097 analysis. “California needs to reduce vehicle miles traveled by 15 percent in order to meet its SB 32 climate goals, even in a scenario with full vehicle electrification.”
Regardless of whether any of these environmental policies have merit, they usually drive up costs on consumers. Critics say it’ll continue to be one step forward, two steps back as long as the state’s environmental agenda drives its decisions.
In other words, solving the housing crisis is essential – and these bills will help. But it will likely persist as long as housing policy is subordinate to the environmental agenda.
Matt Fleming is an opinion columnist for The Orange County Register.