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PLANNING WATCH - California State Senator Scott Wiener’s latest giveaway to the real estate and construction industries is California Senate Bill 607. At CityWatchLA and elsewhere there have been excellent critiques which completely debunk this legislation. Instead my focus is the flawed logic underlying Senate Bill 607. It is yet another YIMBY “housing” bill to feather the nest of real estate investors, despite claims that its purpose is to reduce homelessness and increase transit ridership.
The bill poses as minor changes to the 55-year-old California Environment Quality Act (CEQA), which would become a major step in solving the housing crisis. Its premise is that by reducing legal impediments to new market housing, it addresses California’s epidemics of homelessness, overcrowding, and declining transit ridership through “trickle down” economics. If adopted, this bill would make homelessness and overcrowding even worse by increasing land values. This is why this legislation dramatically raises the cost of housing and, therefore, leads to increased homelessness and overcrowding.
Posing as progressive legislation, this approach to the housing crisis rests on several false claims, in particular blaming land use regulations, particularly CEQA, for the growth of homelessness. According to Senator Wiener, if we eliminate this supposed barrier to housing production, the private sector will quickly solve the problems of homelessness, overcrowding, and declining transit ridership. These predictions, however, rest on two demonstrably false claims:
False claim #1. California’s housing crisis results from regulatory barriers, especially CEQA. In fact, the worsening nationwide housing and overcrowding crises result from rising economic inequality, the long-term cancellation of Federal public housing programs, and corporate investment in houses and apartments.
False claim #2. Local deregulation (i.e., the revocation of local land use and building code regulations) has increased in recent years, based on the faulty assumption that market rate housing “trickles down” and becomes affordable. In the real world trickle down has not and will not happen because the price of less expensive housing has, like all housing, risen much faster than wages. In LA, for example, the real cost of housing has increased three times faster than wages between the years 2000 to 2025.
These false claims hide the real causes of the worsening homeless and overcrowding crises:
- Increasing economic inequality has priced nearly 200,000 Californians out of housing. In addition, the termination of HUD public housing programs began 50 years during the Nixon administration. As a result, low-income families were slowly forced into over-priced market housing. Since developers do not build low-priced housing, and since older housing has not trickled down to become affordable, the alternatives facing low-income families are to become homeless or to live in overcrowded conditions. These are the real housing trends, and they result from false solutions, such as SB 607.
- The financializaton of housing, in which investors pour vast amounts of cash to buy single-family homes and apartments, has reduced the home ownership rate and made the housing crisis worse. For example, in Los Angeles the price of housing has increased roughly twice as fast as actual wages.
As a result, programs which rely on deregulation make the housing crisis worse because they increase the value of land, the hidden agenda of the interest groups behind Senator Wiener’s legislative efforts, including California Senate Bill 607. Once a privately-owned parcel can generate more income for investors through SB 607 or similar legislation, its value increases even though it results in more homelessness, overcrowding, and reduced transit ridership. Luckily for Wiener and his benefactors, the mainstream press echoes his claims rather than reporting actual results. If they reported the truth, that the housing crisis is getting worse because of false solutions like SB 607, Wiener and his allies would be out on the street, with the homeless and overcrowded population they are responsible for.
(Dick Platkin ([email protected]) is a retired LA city planner, who reports on local planning issues. He is a board member of United Neighborhoods for Los Angeles (UN4LA). Previous columns are available at the CityWatchLA archives.)
