Opinion: What Killed the California HOME Act?

5 mins read

It has been over two years since California Senate Bill 9 (SB9) became law, promising to “open up opportunities for homeowners to help ease our state’s housing shortage and enable more folks to buy their first home.” In reality, logistical issues and opposition from local governments kept it from doing much at all. California is in a housing crisis, with over 171,000 homeless and the highest median housing prices in the nation. While SB9 is a good law to be able to use to make what little housing it can, without needing new land or the taxpayer’s dime, there are far more impactful ways to solve the crisis, such as more high-density housing and vacancy taxes.

Dead on Arrival

Even before the bill took effect at the start of 2022, UC Berkeley’s Terner Center for Housing Innovation presented figures that cast doubt on its abilities. Terner estimated that, accounting both for houses that were legally prohibited, economically incapable, or physically incapable of using the bill, only around 5.5% of single-family houses in California could use this bill. Of that 5.5%, around 73% would have already been able to use existing ADU laws, though there would be houses that could build 3 or 4 houses where once they could only build 2 or 3. The bill was half-dead on arrival.

But, the bill isn’t necessarily that bad considering those limits. Although it’s a far cry from ‘ending single-family zoning’ as believed, any housing is welcome at this point, and even if only 10% of all houses feasible within the market and the law is created, it would still represent 41,000 new homes, most notably costing the state nothing in land that is not already built upon. “SB9 won’t single-handedly solve our housing crisis, but it will help address housing affordability by creating duplexes and smaller single-family homes at more moderate price points,” California Assemblyman rerunning for the State Assembly’s 23rd district (so listen up M-A seniors eligible to vote) Marc Berman said of the bill. “Addressing the housing crisis will require multiple solutions – there is no silver bullet.” 

“Addressing the housing crisis will require multiple solutions – there is no silver bullet.” 

Marc Berman, State Assemblyman

Cities Undermine the Bill

No, what really stopped the bill was sabotage from cities and towns that despised it. Some, like a coastal town near Los Angeles named Huntington, filed a lawsuit against the state over SB9, claiming that the act violated the sovereignty of towns and describing the state’s actions as “draconian.” The courts did not see it that way, throwing out the lawsuit in federal court, though Huntington intends to appeal the decision. 

Other towns tried to find loopholes in SB9 that allowed them to restrict it to the point of unusability. The law has restrictions for using itself in cases where it would be unsafe or destroy history, so some townships classified large swaths of houses as historic or fire-prone districts, either in legitimate attempts to apply these exceptions with cooperation between city and state officials, or disingenuous attempts by ‘not-in-my-backyard’-types, or NIMBYs, to cut out major chunks of cities otherwise eligible for new housing under SB9. Woodside took it a step further by making an objective standard that no SB9 project could be built on land protected for mountain lions, and then claimed the whole town was a mountain lion sanctuary, so the whole town was exempt. 

The law gives local governments the ability to set “Objective Design Standards” for their town, so many towns made standards to invalidate the bill. The law requires new homes built and lots classified under SB9 to be at least 800 square feet, so a common tactic, both described in another Terner Center analysis and employed as close to home as Woodside (and Atherton in some cases), was to require SB9 houses and lots be at most 800 square feet, making SB9 practically unusable. “Many of these cities have made the maximum size for new units close to the minimum size required by the state law—800 sq. ft. Such requirements will almost certainly limit the number of lots that will be effectively eligible for new building under SB 9,” the Center’s analysis said.

Resentment close to home was not limited to Woodside. The city of Atherton specified that its designing of objective standards for SB9 was “under protest, as it is the council’s position that in enacting these laws, the legislature has improperly usurped local land use authority.” Palo Alto’s Mayor and candidate running for State Assembly’s 23rd district, including Palo Alto, Menlo Park, and Atherton (so listen up seniors eligible to vote), Lydia Kou, told Palo Alto Online that SB9 “is truly undermining the community and democracy. It doesn’t involve any neighborhood input… I think the state government needs to stop regurgitating propaganda regarding these unfunded mandates that make it impossible for cities to do right by their people.”

“I think the state government needs to stop regurgitating propaganda regarding these unfunded mandates that make it impossible for cities to do right by their people.”

Lydia Kou, Palo Alto Mayor

Revival Efforts

These objections are notable within the context of the rather lackluster performance of the bill in increasing housing supply. In Atherton, a town with 100% single family zoning, only 10 projects began in two years, four of which are still being considered. In Palo Alto, a city with over 15,000 single family homes, only six homes were utilizing the bill, a rate of ~0.04%. This isn’t limited to the Bay Area either. A year-in review by the Terner Center found similarly insignificant results, with almost no applications in San Diego despite 75% of housing being single family, and 221 applications in LA, a city with 1.3 million single-family homes.

State Attorney General Rob Bonta has been proactive in defending SB9 across the state. He created the “Housing Strike Force” to enforce state housing laws in specific, and chased down city after city violating SB9. When Woodside classified their entire town as a mountain lion habitat, Bonta told them to stop, which they did the same day. He was even specifically named as a defendant in Huntington’s lawsuit, and after it was thrown out, Bonta said, “We look forward to prosecuting our state case against Huntington Beach. Everyone must do their part to address California’s housing crisis.” The legislature hasn’t been quiet either, now considering Senate Bill 450, which, among other aids to SB9, would ban any Objective Design Standards that only apply to SB9 housing—such as a law mandating a maximum of 800 square feet.

“Everyone must do their part to address California’s housing crisis.”

Rob Bonta, California Attorney General

These handily address the issues with enforcement, but even properly used, it is far from enough. In 2017, California Governor Gavin Newsom promised, should he become governor, he would create 3.5 million new homes. By October 2022, he had made under 500,000. Even if all market-feasible units under SB9 calculated by Terner were built in the following year, it would just break one million. But it would not even matter. 1.2 million homes lay vacant in California, and we still have 28% of all homeless people in the country, at, again, over 171,000 people, with that number likely to rise alongside rising immigration.

As it turns out, just building more housing does not automatically lower costs to affordable rates in this climate. The cause is simple; landowners are incentivized to keep people homeless. Investors buy houses keep them off-market in hopes housing prices rise such that they can then sell the property off later for profit, and homeowners defend ‘property values’ for a similar reason, leading both to oppose affordable housing. This is a fundamental problem with the commodification of housing, and giving some individual homeowners the ability to add an extra unit on their lot will not change the incentives causing the problem. That would require a heavy tax on vacant houses and housing projects on much larger scales than house by house. 

Senate Bill 9 is an act that should be a minor part of a larger effort to build more housing in the state. It clearly wasn’t going to massively influence housing, even if local parties hadn’t gone insane over them, and politicians like Atkins or Newsom shouldn’t have presented them as such. As for the cities and towns attacking SB9, their fierce opposition to this incredibly minor housing law underlie their real goal: they simply don’t want new housing—at least, not in their backyard—and are willing to let others stay stuck on the streets to maintain that.

Brian is a senior at M-A with a storied history of journalism. His favorite stories to write are about school, local and state policies, and politics. He enjoys creative writing, and plays chess in his free time.

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