Every eight years, the state hands local governments a housing to-do list. Under Gov. Gavin Newsom’s administration, cities and counties are assigned targets for how many new homes they should plan for across four income tiers, from housing for the wealthiest buyers down to units affordable to the poorest residents. The goal is to keep pace with population growth while making a dent in California’s long-running affordability crisis.

This summer, a large swath of the state — including all of Southern California — hit the midpoint of its current eight-year planning cycle. The results, based on state housing data, are underwhelming at best.

Fewer than a third of California’s cities and counties are building enough market-rate housing to stay on pace with their targets. The numbers get worse from there. Only about 10% are keeping up with their goals for “moderate” income housing, roughly 13% for “low” income units, and a mere 6% — just 32 jurisdictions statewide — are on track for housing affordable to residents earning less than half the local median income.

Only five places in California are hitting all four of their targets, and most are far from the region: the unincorporated areas of Plumas, Napa, Yolo and Mono counties, plus the small Sierra foothill town of Placerville. Not a single Southern California city makes that list.

Take Irvine, one of the rare local success stories on market-rate housing. The Orange County city was told to plan for 8,671 above-moderate units by 2030 and has already permitted more than 6,000 — putting it ahead of most cities in that category. But when it comes to housing for lower-income residents, Irvine mirrors the broader statewide struggle: just 9% of its very-low-income target and 3% of its low-income target have been permitted so far.

Why the gap between paper plans and actual construction? For one thing, the numbers themselves are enormous. California’s current cycle calls for nearly 2.5 million new homes over eight years — more than 312,000 per year. Even during the state’s strongest building booms, in the early 1960s and mid-1980s, annual construction never approached that level. Despite a wave of new state laws designed to speed up housing approvals, California is still adding only a bit more than 100,000 homes a year.

Local government advocates argue that cities are being blamed for something outside their control. “Cities cannot require developers to develop and cities don’t build housing,” said Jason Rhine, a lobbyist for the League of California Cities. Local officials can rezone land and streamline permits, he said, but they can’t force builders to break ground.

Pro-housing advocates see it differently, arguing cities still aren’t doing enough to encourage development. “Cities can argue that they don’t directly control production, but they do control fees, zoning and permitting,” said Laura Foote, executive director of YIMBY Action. She said the state’s housing allocation system “is only as good as we have the political will to actually hold cities accountable,” and faulted state regulators, too, for not pushing harder on cities to adopt more development-friendly rules.

A spokesperson for the state’s Department of Housing and Community Development, Jennifer Hanson, said the agency is actively monitoring cities’ progress and enforcing commitments made in their housing plans. She pointed to recent state laws that exempt many urban infill projects from environmental lawsuits and require cities to allow taller buildings near transit stops, saying both have already helped move forward projects representing thousands of proposed homes.

Hanson also noted that plenty of factors driving whether homes get built are simply beyond any government’s control. “Whether a project moves forward depends on interest rates, construction and land costs, access to capital, insurance and expected rents or sale prices,” she said.

Affordable housing faces its own distinct obstacle: money. With rare exceptions, building homes priced for lower-income households in California requires public subsidies or investors willing to accept slim returns. State funding has been scarce since a 2018 voter-approved bond that fueled California’s main affordable housing subsidy program ran dry. Housing advocates are now hoping voters will approve an $11.25 billion state bond measure this November to refill that funding pipeline.

Housing for middle-income earners has its own bind. Moderate-income projects typically don’t qualify for the subsidies aimed at lower-income housing, yet the rents they can charge are often too low to attract developers seeking a profit without public support.

State lawmakers tried to create a workaround in 2017 with a law that fast-tracks approval for apartment and condo developments in cities that fall behind on their above-moderate, low- and very-low-income targets. In exchange for streamlined permitting, developers must include a share of affordable units and pay higher wages to construction workers.

Of the 212 Southern California cities and counties that reached the midpoint of their planning cycle this year, all but four missed their targets and are now subject to that streamlining law.

Even so, don’t expect a construction boom overnight. Developers have long argued that the law’s affordability and wage requirements make many projects financially unworkable outside of the most expensive rental markets. Since 2018, the law has helped approve nearly 28,000 units statewide — a meaningful number, but nowhere near enough to close California’s housing gap.

Original source: CalMatters

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The analysis comes as Los Angeles officials debate how to respond to Senate Bill 79, a state law intended to allow taller apartment buildings near transit hubs. Last month, the Los Angeles City Planning Commission considered a proposal that would delay implementation of SB 79 until 2030 and instead advance a local “Low-Rise Ordinance.”

Supporters of more aggressive housing reforms say that approach misses a larger opportunity: allowing so-called starter homes in single-family neighborhoods. Under the AEI proposal, aging single-family houses could be replaced with townhomes, fourplexes or projects with as many as eight homes on one lot.

The institute estimates that such a policy could add about 13,600 homes per year in Los Angeles, nearly doubling the city’s current pace of new housing construction. Over a decade, that would amount to roughly 136,000 additional homes, while generating an estimated $9 billion in property tax revenue.

The research argues that Los Angeles already sees older single-family homes replaced in many neighborhoods, but often with large luxury houses that do not increase the number of units. A typical example cited by AEI involves a $1.1 million single-family home being demolished and replaced by a $3.1 million mansion.

By contrast, the institute says, replacing that same property with four smaller homes could produce units valued at about $1.2 million each. While the individual homes would cost less than a new mansion, the total property value would rise, increasing tax revenue for the city and other public services.

AEI estimates the revenue from such conversions could reach $182 million in the first year, $9 billion over 10 years and $36 billion over 20 years as more lots are redeveloped. Those funds would support the city’s general fund, schools and essential services.

The report points to several reasons Los Angeles is especially well suited for this type of housing reform. Much of the city’s single-family housing stock is old, with the typical home built before 1960. Land values are also high, with the median home valued at roughly $1.1 million, much of that tied to the land rather than the structure itself.

In all, nearly 400,000 single-family homes sit on valuable land across Los Angeles, according to the analysis.

The debate over SB 79 has focused largely on housing near rail stations and major transit corridors. The state law is designed to make it easier to build mid-rise and high-rise housing in those areas. One estimate cited by AEI suggests a streamlined version of transit-oriented development could produce about 4,200 homes per year.

But the institute argues that starter homes represent a broader opportunity because they could be built throughout existing single-family neighborhoods, not only near transit. It also says Los Angeles’ local low-rise proposal could fall short in both directions: allowing more density than needed in some areas while not permitting enough housing near transit to make a significant difference.

Los Angeles has a long history with this type of housing. Between 1921 and 1930, the city permitted about 220,000 homes, roughly half of them duplexes, triplexes, fourplexes or bungalow courts. About two-thirds of those structures still stand today. The report says those housing types became far less common after federal policy, state law and local zoning changes beginning in the 1930s restricted or prohibited them.

Housing advocates have pointed to California’s accessory dwelling unit reforms as a possible model. Since the state streamlined approvals, reduced fees and required cities to allow many ADUs by right, backyard cottages and garage conversions have become a significant source of new housing in Los Angeles. Nearly one-quarter of new homes built in the city in recent years have been ADUs, according to the article.

Los Angeles faces an estimated shortage of nearly 500,000 homes. While city officials continue to push back against state mandates for more housing near transit, the AEI analysis argues that legalizing small multi-unit projects on single-family lots could provide one of the largest housing opportunities available to the city.

Original source: CalMatters

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In this unincorporated Riverside County community, the big-box distribution hubs responsible for fulfilling online shopping orders have long been contained to a substantial strip west of the freeway. Burlington, Living Spaces and FedEx are among nearly 50 warehouse properties located here, capitalizing on Mead Valley’s easy access to rail and freeway corridors.

Beyond this strip, though, Mead Valley residents embrace a rural lifestyle. People here raise horses and livestock; most streets are lined with gravel trails, rather than sidewalks, to accommodate riders on horseback. Besides the new Farmer Boys restaurant near the freeway, the community has few local businesses other than gas stations, feed stores and plant nurseries.

As e-commerce exploded during the COVID pandemic, more distribution centers rose along the freeway, bringing more trucks to local roadways. Still, there was an understanding that, beyond the clearly delineated industrial zone, Mead Valley residents could maintain their solitude and sweeping views, in exchange for shouldering a disproportionate share of an industry critical to America’s online shopping habit.

But that sacred line in the dirt — where warehouse development ends and rural living begins — could soon be blurred.

County leaders are reviewing a dozen requests that would rezone portions of rural residential land in Mead Valley to create more space for industrial use. Developers are seeking to expand warehouse development beyond the established industrial zone; at least one proposal would result in the demolition of dozens of homes as well as dedicated open space. Others would pierce the existing boundary, bringing the potential for warehouses and their 24/7 noise and exhaust to the outskirts of existing neighborhoods, fundamentally altering residents’ lifestyles.

County Supervisor Kevin Jeffries, who represents the district that includes Mead Valley, said he has “deep concerns” about the proposed changes. He described drawing a “big red rectangle” over Mead Valley’s industrial zone, indicating where he believed the boundaries of warehouse development should remain.

“All the low-hanging easy parcels for warehousing are pretty much all spoken for. And so the really big, deep-pockets developers now see opportunities to try and propose to go beyond the boundaries that have been put in place for decades,” said Jeffries, who is retiring after 12 years on the board.

“It’s going to be a challenge if they cross that line and start marching into what you might call Mead Valley proper. You start moving up that way — when or where does it stop?”

Resident Karla Cervantes expressed similar concerns. Cervantes and her husband, Franco Pacheco, raise their children and sheep on two acres in Mead Valley. She worries neighborhoods will start falling like dominoes as more rural residential land is rezoned for industrial use.

“Once one neighborhood is surrounded by warehouses, then the investors will come, buy them out, and then it creeps up more and more and more,” Cervantes said.

The county’s general plan amendment process, a largely bureaucratic zoning review the county undertakes every eight years, could prove pivotal for residents of Mead Valley this year: Will leaders green-light the proposed zoning changes, paving the way for more warehouses — and with them more jobs and revenue flowing into county coffers? Or is this the moment that the rapid-fire proliferation of distribution centers stretching for miles in each direction along the 215 corridor finally slows?

Riverside County’s unique rezoning process is the result of a more than two-decade-old settlement with the conservation group Endangered Habitats League, which sued the county in 2003 over concerns about sprawling development.

The settlement “resulted in a way to slow-roll development in the rural areas of the county,” said county planning director John Hildebrand.

Under terms of the settlement, developers who want to request zoning changes for swaths of land from one of five major uses to another — agriculture, open space, rural, rural community or community development — are able to request that change only every eight years, during the county’s Foundation General Plan Amendment cycle.

The process was designed to provide county leaders with the opportunity to take a comprehensive look at rezoning proposals, and “look at the bigger picture instead of piecemealing it,” said Dan Silver, executive director of the Endangered Habitats League.

Mead Valley, a majority Latino community of about 20,500 people, already has 2,000 square feet of warehouses per person, including existing and approved warehouses and those under environmental review, according to a data analysis by Susan Phillips, director of the Robert Redford Conservancy for Southern California Sustainability at Pitzer College, and Mike McCarthy, an adjunct professor and data scientist at the college.

That’s one of the highest warehouse-per-resident ratios in the Inland Empire, according to their analysis. And the rezoning applications that developers have submitted would add more than 1,000 additional acres of warehouse projects.

In preparation for their requests, many developers have already positioned themselves as “property owners” of large parcels by getting enough local homeowners to agree to sell their land, in exchange for sizable payouts, contingent upon the county’s approval of the zoning changes.

The Planning Commission has so far heard three zoning-change requests for District 1, which includes Mead Valley; several were continued to future meetings. If supervisors approve the requests, the developers must return to get approval for specific projects.

One developer, Hillwood, is seeking a zoning change to build a million-square-foot warehouse, along with a public park, on about 65 acres of land just west of Mead Valley’s industrial corridor.

Currently known as the Cajalco Commerce Center, the proposed development would require the demolition of 26 homes and a commercial building. The developer has promised an estimated 974 jobs, as well as infrastructure improvements and landscaping along a main thoroughfare, according to the project’s draft environmental impact report. It would have a “significant and unavoidable” impact on air quality and transportation, the report said.

Paz Treviño lives on the outskirts of Mead Valley’s industrial corridor, on a two-acre lot where he sells heavy construction equipment. He has agreed to sell his property to Hillwood for $3 million, contingent on county approvals, he said. He has outgrown his current lot, he said, and with the money he stands to make from selling his land, he hopes to buy five or 10 acres elsewhere.

A member of Mead Valley’s Municipal Advisory Committee, he supports allowing more industrial development.

The warehouses, he said, bring jobs to a community where fewer than 8% of residents have a bachelor’s degree. He’s heard concerns about the lack of grocery stores, restaurants and healthcare facilities, and predicted those amenities would come as family incomes rise.

“We’re going to start getting the stores that people want,” he said. “But we’re not going to get those other industries — the food industries, the retail industries — without first having a stabilized middle class.”

He is frustrated with the anti-warehouse advocates trying to stand in the way of rezoning, and believes landowners such as himself should be able to profit handsomely from their investments. “It’s the landowners that have the last say, is what I say,” he said. “And if you’re not within the area, mind your damn business.”

Shanowa De La Cruz could end up on the losing end of that equation.

De La Cruz, her wife and their children moved to a five-bedroom house on one acre in Mead Valley not far from Treviño’s property about three years ago. It was supposed to be their forever home, where they could raise their kids — five of six still live at home — as well as chickens, goats, ducks and a pig.

“We like our solitude. That’s why most of us live over here in Mead Valley,” De La Cruz said.

Six months after buying the property, they learned about the Cajalco Commerce Center proposal — and that some neighbors had already agreed to sell their properties to Hillwood. De La Cruz said she contacted the company and got an offer that barely covered what they paid for the home, presumably because the developer doesn’t need their property for the project.

The situation has left De La Cruz between a warehouse and a hard place: The developer would need to pay a “substantial” amount of money to get her family to move, she said. But if she stays and the proposal is approved, the development would loom nearby, infringing on their privacy and tanking their home value.

“It’s going to be one of those houses that is in between a warehouse” development, she said. “We’ve all seen those houses. No one’s going to buy that. You say, ‘Aw, pobrecito, they left them there.’”

Scott Morse, executive vice president with Hillwood, declined to comment on De La Cruz’s situation. He said the proposal has public support.

“We’re bringing something to the community that is needed and wanted by the community,” he said, “so that’s our compass.”

Raymond Torres moved away from the “hustle and bustle” of the San Diego area more than 20 years ago and eventually built two homes on a quiet street in Mead Valley.

Standing in his driveway on a clear day, he can see the San Jacinto and San Gabriel ranges, and Big Bear and Palomar mountains. Across the street from his property is open space, where he says he regularly sees owls and kangaroo rats among the grasses and native plants. His neighbors ride horses on the land; he prefers to traverse it on wheels — by dirt bike, quad or go-kart.

The property directly across the street from him is not proposed for rezoning, but a large swath of open land surrounding it is. The real estate and investment firm Deca has proposed rezoning 648.5 gross acres from rural residential to community development, with a mix of residential, commercial and industrial components, according to Travis Duncan, Deca’s vice president of development.

“Additionally, we intend to set aside a substantial portion of the property as open space and are excited about the mix of commerce and conservation that the project offers,” Duncan said.

Torres said it’s “heartbreaking” to imagine the land being used for development.

“It’s our neighborhood,” he said. “We have pride in it.”

The Deca proposal would also bring industrial development much closer to the home of Cervantes and Pacheco. Their two-lane street already has become a truck bypass. They are concerned warehouses will beget warehouses, eventually ending up in their backyard.

Mead Valley is oversaturated with warehouses and semis, they argue, and yet the community itself remains underinvested. Mead Valley would look “amazing” if it was actually benefiting from major portions of the revenue that industrial development is generating for Riverside County, Cervantes jokes. Pacheco notes that the closest Target — on the other side of the freeway — is not a retail store but a massive distribution center.

Earlier this year, Pacheco and Cervantes launched the Mead Valley Coalition for Clean Air to oppose warehouse expansion. They see the rezoning fight as a fight for Mead Valley’s future. For the residents who stay, the question is whether county leaders will rubber-stamp continued expansion of the I-215 industrial corridor, and whether that line in the dirt — between industrial and rural residential — will survive.

But Cervantes said trying to keep Mead Valley from drowning in the shimmering sea of white warehouses often feels like an uphill battle. She worries about a future with worse air quality and decreased property values, and about the limited opportunities for young people growing up amid a mass logistics hub.

“When they look to see the sun rise,” she said, “they’re going to see the sun rise on a bunch of warehouses.”

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