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“By-Right” Deregulation Is Not a Real Solution

August 27, 2016

OpEd By and sfexaminer – excerpt

A few weeks ago we wrote about the “by-right” development law, which Gov. Jerry Brown is pushing for approval this year, as a speedy trailer bill to the state budget with no public hearings. The narrative behind the governor’s bill is that it would help increase the supply of housing being built — both market-rate and affordable — and therefore ease the demand on housing that today is at crisis levels. But this deregulation-based approach, like many before it, is a false solution to the housing crisis. Instead, we point to other ways that state and regional government can increase housing with more helpful policies and real interventions.

Gov. Brown’s bill would, by state law “pre-emption,” deregulate housing development approvals, supposedly in the name of affordable housing: taking away public review hearings, trumping local conditions of approval and overriding Planning Commission discretion for development proposals that simply comply with a local inclusionary housing requirement (the minimum amount of affordable housing developers are required to include in projects). For cities that don’t have a local inclusionary requirement, the state law standard would be as low as five percent affordable units in a project to be “eligible” for by-right approval. In San Francisco, this deregulation would basically apply to all residential development projects…

As we reported earlier, in San Francisco, where we have a pipeline of 19,000 more approved units than have actually been built (not even counting those approved in The City’s big redevelopment areas), a backlog growing by approximately 700 more units each year, it isn’t the approvals process that slows down development, but something much more fundamental: financing for actual construction of approved projects. And deregulation — the favored approach of some politicians and developer front groups — isn’t going to affect that fundamental fact.

In actuality, increased deregulation has the potential for terrible consequences. As the head of the State Buildings Trades Council pointed out last week in the Los Angeles Times, both the state’s energy crisis and the national financial meltdown in the last decade were preceded by similar deregulatory approaches, with disastrous results as everyday people have experienced. The Building Trades leader was quoted as poignantly saying: “We have found the history of mass deregulation in America doesn’t work well for working people.”

Instead of focusing on the overblown boogeyman of regulation, if the political leadership were really serious about seeking solutions to the state’s housing crisis, there are other regulatory interventions that would actually address the question of housing production…

1) Give teeth to existing housing development requirements:…
2) Reform property tax law to promote residential development:…
3) Pair housing policy with the necessary state-level investment:…
4) Link state and regional investments to local government action:…

These are real ways we can begin to encourage good housing development across the state. But as long as developer front groups masquerading as “housing advocates” and some politicians continue to chase after false solutions based on 1980s-era deregulation policies, they will fail to meet the increasingly dire housing needs of Californians.

Peter Cohen and Fernando Marti are co-directors of San Francisco’s Council of Community Housing Organizations…(more)

Deregulation is largely to blame for the housing crisis. Not many people will dispute the fact that the banking crisis that started the world economic downturn was the result of the deregulation of the banking industry. The failure of governments to protect citizens from the excesses of the banking and investment industries resulted in the lack of trust in the governments that brought us to this global call for radial changes that is racking our world.
People who claim you cannot put the genie back in the bottle and reverse the direction we are going in would also have us believe that they are smarter than we are and they know what they are doing. We don’t think the status quo is helping most residents of San Francisco and we certainly don’t trust them to know how to fix the problems they created.
We shall see how the voters feel in November. Big money has not helped win many local elections lately. If that trend continues, we may see some changes in policies and priorities, especially if the decentralization of power plays resonates.

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