The Way California Requires Local Governments To Plan For New Housing Is Complete Nonsense.
Passing good laws is one thing. Implementing them is another.
In 2023, the city of Sausalito adopted a housing plan that would allow the construction of 724 new homes in the tourist-favorite city of 7,000 on the other side of Golden Gate Bridge from San Francisco. On the surface, everything seemed… ok. The city council had worked on the plan for two years. It had met a state deadline to produce its plan. And the city was long overdue for new housing.
There was just one catch — some of the sites of that new housing weren’t exactly shovel ready. Because they were underwater.
As one real estate investment firm wrote to the city council, “many sites are unsuitable for development because of factors like (i) being mostly underwater; (ii) inadequate road access; and (iii) high value of current use.”
This raises a pretty obvious question. What the actual f*ck? Why would a city approve a housing plan that on its face was so farcical? Was it incompetence or malice?
And what can we do about it?
Oh the tangled web we weave…
In 1969, the state of California passed a law that requires cities and counties to regularly plan where to allow new housing. It was an example of a “Fair Share” law, with the idea being that every city should build some amount to alleviate the overall housing shortage. Every eight years, local governments must allow a number of new housing units — market-rate, subsidized affordable, everything — to be built. The target number is called the Regional Housing Needs Assessment, often referred to by the acronym RHNA (pronounced rhee-nuh). And they have to figure out where to put them, a process that is often called the Housing Element (since it’s the housing element of their general plan.)1
In theory, this means that every one of California’s 58 counties and 483 cities has a regularly-updated housing plan. In reality, well… you already know what the reality is. Not great! Not great at all.
One big reason California has fallen woefully short on housing supply is that historically there were no consequences for failing to comply with RHNA. Not just like a few. None.
We’ve known about this problem for a long time — like as soon as the law was passed. As the Los Angeles Times reported, “by July 1969, state officials realized local governments were ignoring the law, with a report warning about ‘discouraging indications’ that a number of communities had ‘no intention of facing up to housing responsibilities.’”
Sometimes cities have simply refused to include a housing element in their general plan. In 1969, for example, the city council of Sebastopol, a small city in the North Bay near Santa Rosa, responded to the requirement to produce a housing element with a resounding “Nah.”
“I’m just not about to be a part of it,” said one member of the council, after a unanimous vote to ignore their RHNA obligations, an answer that is both completely wrongheaded and honestly a little iconic.
And this is not some relic of the late 60s. Local governments have been playing shell games with RHNA for decades. As one councilman from Foster City bluntly told the Los Angeles Times in 2017, “We’re kind of lying. It’s the only word I can come up with. We have no intention of actually building the units.”
At a 2014 meeting of the Cupertino City Council, elected officials openly discussed circumventing state law. “I think you should put it where [the Department of Housing and Community Development] will approve it, and you hope it’s not going to get built,” said one council member. “That’s called cheating,” another replied. “That’s been an effective strategy in the past,” a third council member said. Then everyone laughed.
The video of the meeting is classic YIMBY rage-bait:
Goal Setting Mostly Doesn’t Work
RHNA isn’t ineffective on accident — it’s hamstrung by design. It’s an extreme example of a “Fair Share” housing law, which is supposed to mean that the state government dictates the what and lets local governments decide the how. For people who like “local control,” it sounds like a great way to enable local creativity. But when local and state governments have different objectives, goal-setting laws don’t work, exactly because of the space for “creativity.” And without powerful, clear and guaranteed enforcement, cities have little reason to thoroughly comply with state laws.
What does work better are Preemption laws, which explicitly require cities follow state guidelines. One good example would be the 2016 California law that legalized Accessory Dwelling Units. In so many words, it said, “Beverly Hills, you are going to accept applications for granny flats. Because we said so.”
That said, preemption bills can be hard to pass. It’s a big lift to get state legislators and the governor to override local governments, even in pursuit of good outcomes. Opposition to state preemption bills from local control advocates can be fierce.
It’s a dilemma. On the one hand we have a system that doesn’t work very well, and on the other we have a better-but-difficult-to-enact alternative.
What do we do? Some advocate for “staying focused” on state legislative reform. Others focus on using the system we have, and giving up on bolder action.
In fact, the two can go together. Squeezing what we can get out of the current system can be used to build political support for more sweeping reforms.
As UC Davis law professor
puts it, the Housing Element process “create[s] periodic agenda-setting events—moments when local governments must overcome their status quo bias and decide how they will accommodate new housing. In California, these events have become focal points for YIMBY (yes in my backyard) organizing.”When cities, San Francisco for example, have to adopt new zoning maps, we have the chance to exert influence on the process, which allows us, as Elmendorf says, to organize — growing our membership and changing the narrative. Sometimes we get what we want, but if the process fails to result in enough new housing, such as it did in Los Angeles, our legal arm, YIMBY Law, can file suit.
Often, people new to housing politics get radicalized just by seeing it in action. (Maybe you’ve had this experience as you’ve been reading this post?) The more you see that things are terrible, the more you realize that things can — and should — change.
Who Enforces the Enforcers?
Laws, especially ones like RHNA, don’t enforce themselves. They are complicated and annoying, and often designed to fail. Without professional complainers, these laws just generate an endless amount of meaningless paperwork.
One of the biggest enforcement challenges is squandered state capacity2. The agency in charge of California’s RHNA process is the Department of Housing and Community Development, which reviews and approves all 539 plans. Even if everyone’s acting in good faith, that’s a lot of paperwork. And laws like RHNA are written in such a way to consume state capacity. A city writes a long plan. Someone has to read it. If they have a critique, the city has to respond. Then their response has to be responded to — and so on and so on.
Is each city’s plan good enough to achieve their housing production goal? Did the city actually adopt the plan legally? Did they follow through on their plan? Is housing actually getting built? Even with hundreds of new analysts, HCD is barely able to answer the first two questions.
It’s worth emphasizing that the reason the law isn’t more straightforward, clear, and powerful is precisely because not everyone wants new housing.
Remember, local officials (like those in Cupertino) know their own cities better than state agencies do. They opposed stronger state housing laws. They continue to lobby to weaken existing laws. They don’t mind a system where they appear to allow housing, but actually include parcels that could never be developed. And even while they have increased their staff of Housing Element reviewers, HCD doesn’t have the resources to accurately investigate every housing element plan in detail.
So, in the meantime, it’s up to advocacy groups like ours to drop the hammer on cities when they flout RHNA. And that hammering can move the needle.
I won’t lie — that can be satisfying. But what’s even better is when, as a result of all this hard work, you’ve built so much support for new housing that elected officials invite you to their press conferences celebrating doing the right thing.
If you want to know more about how this process works in more depth, you can check out this explainer.
FYI, the word state here means governments in general, rather than state governments in particular.