Thursday, July 27, 2023

Why Build Houses in Shopping Centers?

 Missed Opportunities in Applying California’s Housing Law   

    Legislation in California since 1969 requires cities and counties to meet certain minimum requirements for new housing construction. The California Department of Housing and Community Development oversees these requirements. The department's website explains: 

    "California's Housing Element Law acknowledges that, in order for the private market to adequately address the housing needs and demand of Californians, local governments must adopt plans and regulatory systems that provide opportunities for...housing development. As a result, housing policy in California rests largely on the effective implementation of local general plans and, in particular, local housing elements."

    Multiple California state funding programs require compliance with this housing development law. The law requires each of the 532 local jurisdictions to inventory potential housing sites and submit a detailed "housing element" every five or eight years. The submissions must include a "land inventory" identifying vacant or underutilized land suitable for new housing, even if the site requires re-zoning for residential construction.

    Because vacant land is rare in most local jurisdictions, sites that now include commercial, governmental, and even religious buildings can be identified as "potential" sites for re-zoning to residential uses. This has brought massive pushback from residents and local governments who object to zoning changes and the loss of local amenities. As a result, most California jurisdictions subject to the law remain out of compliance.

      We reviewed the housing element prepared by one California county and were surprised to see sites with existing shopping centers, churches, and even school properties included in the "land inventory." The law does not require that the existing owners of these sites convert them to residential uses, nor could it without the exercise of eminent domain. So, the conversion of these non-residential sites to housing remains largely hypothetical. This makes the goals of the legislation suspect since, at its base, it relies on property owners to agree to convert existing uses to housing. The law has teeth only so far as forcing local jurisdictions to identify sites that would be "nice" to convert to housing. Nothing more.

    What's needed is the identification of sites that will more realistically produce a greater supply of housing, especially low to moderate-income housing. A shopping center owner isn't likely to tear down stores and build apartments just because the state would like that, not to mention the loss of valuable neighborhood amenities. So, what sites could realistically provide more housing, and what would it take to make that happen?