(Illustration by Anna Gusella)
Housing costs have skyrocketed in affluent urban regions nationwide and around the globe, from Seattle to New York City and from London to Hong Kong. Ground zero of this disaster is California. The state’s housing shortage has reached crisis levels in recent years, fueling stark inequality, population decline, and mass homelessness. These maladies all stem from the same culprit: a chronic lack of home building relative to population and economic growth. California has dug itself into such a deep hole that the state Department of Housing and Community Development (HCD) estimates that California needs to build 2.5 million additional homes by 2030.
California’s land use policies serve as an example to the rest of the world—of what not to do. The state’s biggest roadblock to building those homes has been intransigent local governments and communities that refuse to zone for and approve needed home building. Their most effective weapon is California’s local land use vetocracy, which protects the status quo and requires project-by-project negotiations with many and varied stakeholders. California’s discretionary approval system represents one of the biggest obstacles to building homes at scale. It offers a cautionary tale about how unqualified deference to local power brokers and “community input” can lead to perverse consequences.
Where New Housing Goes to Die
Discretionary review is exactly what it sounds like: city governments, planning commissions, circulation committees, design review boards, and so on have the discretion to approve or deny proposed housing projects, irrespective of whether those projects comply with local rules. The byzantine housing-approval process in cities like San Francisco unduly empowers officials and forces developers to navigate a dizzying series of steps before their projects get approved—if they ever get approved. The process varies by city and by project, but it can include a lengthy comment period, design review, a several-hundred-page environmental impact review statement, more public comment, and hearings before both the planning commission and the city council. And that’s assuming no one sues the developer (more on that later).
This approval process can drag out permitting for months or years, or until the developer and project backers give up. In Los Angeles, it takes more than eight months for a proposed project to get permitted, according to HCD data; in San Francisco, the whole process often takes more than three years. That’s three years of jumping through procedural hoops before the developer even breaks ground.
Steering a proposed development through this process also takes a lot of money. As the San Francisco Chronicle put it in 2019, “A slew of expensive professionals are usually required, including land use attorneys, architects, shadow consultants, open space designers and lobbyists.” The reference to lobbyists gestures toward how the discretionary approval system invites corruption and shuts out smaller, less politically connected developers.
Aldermanic privilege—the practice of deferring to local legislators over whether to approve or reject a proposed development in the district they represent—exacerbates this dynamic. It also worsens housing segregation, because it means that new units get concentrated in districts with less political influence or where the relevant official is simply less opposed to more housing.
But the actions of a few individual councilmembers play a minor role in California’s discretionary approval process woes. The bigger problem is the state’s system of community input, which, despite what the name implies, is profoundly undemocratic.
How can community input be undemocratic? It all comes down to whose voice gets heard. Opportunities for in-person community input usually occur at odd hours, when working people and parents who need to care for small children are less likely to attend. The result, according to research by political scientists Katherine Einstein, David Glick, and Maxwell Palmer is that city council members and planning commissioners disproportionately hear from residents who are white, older than 50, and—by a stunning margin—homeowners. Homeowners, of course, have more incentive than renters to block more development, because housing scarcity boosts their property values.
And as if the overrepresentation of NIMBYs (short for “Not in My Backyard”) in the public comment process were not enough, new research from political scientist Alexander Sahn shows that comments in opposition to new development are two times more effective than comments supporting proposed projects. Remarkably, Sahn’s findings hold true even in San Francisco, which is home to a large number of well-funded community nonprofits with a mission to assist low-income people and support affordable housing.
Cities have made various attempts to improve representation in community input, including by providing free food and childcare. During the pandemic, many public meetings went over to Zoom, an innovation that some speculated would make the process more democratic. Unfortunately, Einstein, Glick, Palmer, and collaborator Luisa Godinez Puig have found these efforts to be largely futile.
Despite these inequities, many progressive nonprofits remain silent about discretionary review or propose more “community empowerment” as a solution to California’s housing ills. In miniature, this approach makes sense: Where nonprofits hold a lot of political sway, the discretionary process gives them more leverage to improve individual projects—for example, by making sure they are more environmentally friendly or by pushing for more subsidized affordable units. But the discretionary process, while improving a handful of projects, massively slows overall housing growth, which is responsible for the very symptoms that these nonprofits aim to cure.
And even if a project somehow clears all of the veto points we have described, NIMBYs can always sue. That is largely thanks to the California Environmental Quality Act (CEQA), which is unique in US jurisprudence. Anyone can sue to stop a proposed housing project under CEQA if the local government has discretion to approve or deny a project. These suits may be anonymously funded, often by business competitors or labor unions seeking a project labor agreement, and may have nothing to do with environmental concerns.
Abolishing the Vetocracy
California has the power to abolish land use vetocracy. Much of the developed, democratic world approves housing development ministerially, or “by right”: If a proposed project conforms to local zoning, building codes, and other legal requirements, then civil servants issue building permits. Elected officials have no say over individual projects that comply with local rules.
A ministerial approval system is transparent. Civil servants approve or reject projects and document their rationales for public review. Developers don’t need to hire expensive lobbyists or donate to a city councilmember’s reelection campaign to get their projects approved; they just need to play by the rules.
Proponents of the community input process claim that it is more democratic than ministerial approvals and that the discretionary process empowers marginalized voices. But the social scientific consensus is that discretionary review grants disproportionate weight to the voice of an affluent minority. By contrast, a ministerial process is based on laws enacted by the public’s duly elected representatives. In choosing the final approvers of a city’s general plan—and participating in the drafting of that binding plan—the public actually gets a greater say in ministerial approvals. Community members can judge elected officials on the results of the plan, which drives democratic accountability. Furthermore, public input becomes easier and more accessible when a city holds large meetings to sign off on a single multiyear plan, rather than countless smaller town halls for each individual building proposal.
In a recent paper, Yale Law School professor Anika Singh Lemar proposes a helpful model for a democratic, discretionary land use regime. In Lemar’s system, public participation would be required during citywide planning, “including adoptions of and revisions to comprehensive plans, zoning codes, and zoning maps.” But approval of individual projects would be by right, sidestepping one of the primary obstacles to making our cities more inclusive and affordable.
Countries with well-functioning housing markets, like Germany, embrace by-right housing approvals. In fact, Germany makes it easy to get a housing permit, which contributes to the country’s remarkable housing price stability. England, on the other hand, is a lot like California. Everything is up for negotiation in England, and as a result, they have a crippling housing shortage and sky-high housing costs.
Building and financing affordable housing is also easier under a by-right system. Instead of subjecting developers to capricious demands for community benefits, such an arrangement could apply incentives to build subsidized affordable housing in a straightforward, consistent manner. Cities could approve zoning changes such as 100 percent affordable housing overlays (zoning changes that allow developers to build at greater heights or densities for buildings that will consist entirely of affordable units) or even fund the creation of social housing.
At California YIMBY (short for “Yes in My Backyard”), a common thread running through our work is our insistence on clear statewide rules, with some local flexibility, that emphasize equitable outcomes over incessant process. For example, California YIMBY’s push to legalize accessory dwelling units (ADUs), such as a freestanding garage that a homeowner has converted into a rental property, helped curtail local malfeasance and led to an explosion in ADU home building, which now accounts for about 25 percent of all permits in Los Angeles. An amendment to the Housing Accountability Act that we championed in 2017 has accelerated housing approvals while granting special benefits to 100 percent affordable housing projects.
As sky-high home prices, cost-burdened renters, and mass homelessness attest, we have a lot more work to do. That work won’t end until we accelerate home building at scale and ditch the discretionary housing-approval process. Those in need of affordable housing can’t wait.
Read more stories by Ned Resnikoff & Brian Hanlon.