Economists Target Restrictive Zoning in Housing Crisis

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A report this week by the White House Council of Economic Advisors came at just the right time as two bills the Bay Area Council supported to ease local zoning restrictions on housing headed to Gov. Newsom’s desk for his signature. SB 9, authored by Sen. Toni Atkins, would allow homeowners in most areas around the state to divide their property into two lots and build two homes on each. SB 10, authored by Sen. Scott Weiner, would make it easier for cities to zone for smaller, lower-cost housing developments of up to 10 units in transit-rich areas or other urban infill sites.

Read the White House report>>

Restrictive local zoning practices like those targeted by SB 9 and SB 10 were among the top reasons cited in the White House report for depressing housing production nationwide. According to the report, “rigid single-family zoning, a practice linked with racial segregation, has prevented the construction of multi-family units, which would allow for higher density and an increased supply of housing.”

The report continued by saying that “roughly 64 percent of all housing that has been authorized since the 2008 global financial crisis has been single-family homes. Units that have two to four residences and allow for multiple families to live on a single lot—as opposed to a large apartment which requires multiple lots to construct—have only accounted for roughly 3 percent of all permits since the financial crisis.”

The report also highlighted the outsized negative impact of our constrained housing supply on lower-income households and communities of color. These constraints, the Council of Economic Advisors found, “increase the cost of housing, which in turn limit labor mobility. Workers cannot afford to move to higher productivity regions that have high housing prices, leading them to remain in lower productivity places.”

The Bay Area Council strongly encourages Gov. Newsom to sign SB 9 and SB 10 and thanks Sen. Atkins and Sen. Wiener for their unflagging leadership in addressing California’s housing crisis.

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