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Mon, Jul

Real Estate Speculators Boost Profits by Bypassing Local Zoning Laws

PLANNING WATCH LA

PLANNING WATCH -  Senate Bill 1688 is a top-down YIMBY effort to override local land use laws in the entire United States.  If adopted, this bi-partisan legislation would make Federal Community Development Block Grants contingent on cities changing such local zoning provisions, as: 

  • “Allowing duplexes, triplexes or fourplexes in areas zoned primarily for single-family residential homes.”
  • “Increasing the allowable floor area ratio in multifamily housing areas.”
  • “Eliminating or reducing off-street parking requirements.”

YIMBY stands for Yes in my Backyard, and according to investigative reporter Patrick McDonald, YIMBY’s are funded by real estate and high tech executives.  Their “pro-housing” agenda is really the elimination of local zoning laws that obstruct their business model “to build, unfettered by regulations, as much luxury housing as possible.”\ 

Since the YIMBY movement’s leadership and deep-pocketed supporters realize that the public rejects their claim that homelessness results from a housing shortage, the YIMBY’s hide behind liberal buzzwords to shred municipal land use laws.  Instead of being straightforward about revoking local zoning ordinances that impede their construction of highly profitable private sector housing, YIMBYs claim these zoning laws are discriminatory.  But instead of calling for stronger fair housing laws, they want to revoke municipal ordinances that hinder real estate developers from building expensive apartments in pricey neighborhoods. 

In California the YIMBYs have supported adopted legislation that allows the subdivision of parcels zoned for single-family houses. Once demolished, these subdivided parcels would sprout two duplexes.  Despite this legislative victory, homelessness is still rising in California

This YIMBY approach to homelessness is not only dishonest, but it also does not work.  While YIMBYs claim their intent is to build affordable housing for the homeless, their solution, the elimination of zoning laws, causes homelessness to rise. 

Reason 1:  The YIMBY objective of rescinding local zoning laws to allow more income-producing apartments on existing residential parcels raises property values.  This increases the cost of housing, and it prices more people out of shelter.  In other words, the YIMBY solution, the deregulation of zoning laws, causes homelessness to increase.  

Reason 2: The foundational YIMBY claim is that homelessness is caused by an induced housing shortage.  They don’t want people to believe their lying eyes: American cities have rising numbers of homeless people, alongside vacant apartments and houses.  Nationwide, Forbes Magazine reports the United States has 16 million vacant homes.  This includes hot real estate markets, like Los Angeles. The Vacancy Report found that Los Angeles has 93,000 vacant units, half of which owners withhold from the market. 

Reason 3:  Another reason why YIMBY proposals, like Senate Bill 1688, are destined to fail is because they leave four major causes of homelessness in place.

  • Growing economic inequality and poverty. The Minneapolis Federal Reserve Bank reports that between 1976 to 2023 income inequality unevenly increased in the United States.  The income of the top .01% grew by 672 %, the top 0.1 percent by 467%, the top 1% by 288%, the top 10 percent by 170%, the middle 40 % by 61%, and the bottom 50% by 19%.  During the same period, the St. Louis Federal Reserve Bank calculated that housing prices increased by 664%.  If you are in the top .01%, your rising income kept up with housing costs.  If you, however, are in the bottom 99.99%, your income did not keep up with the cost of housing.  This is confirmed by a new UCSF study: The California Statewide Study of People Experiencing Homelessness.  The authors found: “Nearly 9 in 10 (89%) participants noted housing costs as a barrier to re-entering permanent housing.”

  • Termination of public housing programs. The Nixon Administration eliminated most HUD public housing programs.  All subsequent Presidents, regardless of political party, have maintained this policy.
  • Evictions.  Because most rental housing is now privately owned, evictions have soared.  Princeton University’s Eviction Lab reports, “In a typical year, landlords file 3.6 million eviction cases.” 
  • Corporate owned housing. Large real estate companies, especially Blackstone, have purchased apartments and houses en masse and then raised rents.  A report on Blackstone, How America’s Largest Landlord and Wall Street’s Highest Paid CEO Are Jacking Up Rents and Ramping Up Evictions, spells this out in detail. 

While we don’t know if Congress will pass SB 1688, we know it won’t work.  The reasons are laid out above, and, if adopted, it will make the nation’s homeless crisis even worse. 

(Dick Platkin is a retired LA city planner.  He reports on local planning issues for CityWatchLA.  He is a board member of United Neighborhoods for Los Angeles (UN4LA).  Previous columns are available at the CityWatchLA archives. Please send questions to [email protected].)