When it comes to fostering new housing, the city of Norwalk is one of California’s superstars.
The Los Angeles County town got an A-plus in the Southern California News Group’s latest housing scorecard for exceeding state-mandated housing goals at all income levels.
Just three miles up the 105 freeway, however, neighboring Lynwood ranked among 84 California cities and counties at the opposite end of the spectrum. Lynwood earned an F because state data shows it missed all four of its housing targets, permitting zero new affordable homes during the eight years ending in 2021.
Most California cities and counties, SCNG’s analysis shows, are more like Lynwood than Norwalk, falling way behind on state housing goals.
The average letter grade for all jurisdictions in 2021 was a C-minus, unchanged from the year before, state housing data shows.
“It’s disappointing,” said Kome Ajise, executive director of the Southern California Association of Governments, a regional planning agency that helps the state oversee housing programs. “There is an overproduction of market-rate housing. But in the low-income category … we were underperforming.”
The findings — part of SCNG’s fourth report card measuring progress under the state’s Regional Housing Needs Assessment program — show California cities and counties continued to struggle with an affordable housing crisis that’s touched off soaring rents and home prices and fueled homelessness.
The analysis is based on state data released on June 30 showing total building permits reported in each jurisdiction’s annual progress report. Numbers for 2022 are due in three months.
Megan Kirkeby, deputy director for housing policy at the state Housing and Community Development Department, complained that cities fail to take the initiative in promoting new housing. In some cases, she said, they obstruct development.
But city leaders maintain they’re at the mercy of market forces, have little space for new housing and work against the headwinds of neighborhood opposition to high-density development.
Some experts say the state itself may be to blame for stepping up punitive consequences for failure without providing the financial resources for tackling the costs and complexities of affordable housing construction.
“It’s hypocritical for the state government to assert that local governments produce homes affordable to the lower income spectrum of households when they’re not giving them the tools, particularly the financial tools, they need to produce those homes,” said Matt Schwartz, president and chief executive of affordable housing advocate California Housing Partnership.
The state’s 53-year-old RHNA program requires municipalities to plan for and promote new housing at four income levels: very low-, low-, moderate- and above-moderate.
A low-income household earns 80% of an area’s median income — for example, $70,400 a year for a family of four in the Inland Empire or $95,300 a year for a family of four in Los Angeles County. Moderate-income households earn up to 20% above their area’s median.
The state’s latest housing report shows meager progress was made in reaching state housing goals.
Just 29 out of 538 California cities and counties — 5% of all municipalities — were fully on track in all income categories for which they had a housing goal as of 2021.
Another 38 are fully on track in all but one category.
But state records also show that 30 California jurisdictions issued zero building permits during the most recent eight-year planning cycle.
Sixty-one more jurisdictions had permitted zero units in three of the four categories.
Overall, California cities and counties issued permits for 128,000 homes in 2021, up from about 109,000 in 2020, the latest state figures show. But only 10% of those permits were for moderate-income housing and 15% were for lower income.
“Every city and county in California should be acting with urgency here to plan for and approve housing that’s affordable to lower-income households,” said Kirkeby, the state housing policy deputy director. “And that’s not what we’re seeing right now.”
Using state data, SCNG graded all 538 California cities and counties with a RHNA target, basing the grade on building permits issued in each income category.
An A grade went to jurisdictions fully on track to meet construction goals for all income groups, and an F was awarded to cities failing to meet those requirements across the board. Bonus points were added based on a city’s level of improvement and degree of difficulty.
As of 2021:
— The number of jurisdictions getting an A rose to 64 in 2021, up from 41 in 2020.
However, most jurisdictions getting A’s had lower housing goals, averaging 207 homes vs. an overall average of 1,547 units for all jurisdictions. Eleven communities needed fewer than 10 new homes to meet their goals.
— Permit numbers for affordable housing improved slightly as well, with more jurisdictions getting an A for affordable housing in 2021 than the year before.
— The number getting a C or better increased to 295 in 2021, up from 188 in 2020.
— A fourth of the state’s cities and counties, or 139, got an F for issuing too few low-income housing permits.
In Southern California, state and regional agencies required 191 cities and six counties to plan for 411,953 homes during the 2013-21 planning cycle. Of those, 165,503 needed to be affordable to low-income households.
While Southern California governments issued almost twice the number of permits needed for “above moderate-income” homes, they issued just one-fifth of the affordable housing permits needed.
And even the total number of permits issued — 377,395 — fell short of the overall goal by nearly 35,000 homes.
Going forward, meeting state-mandated targets will get even more difficult. Starting in 2022, the state’s most populous regions saw their state housing goals increase, with targets doubling in the Bay Area and tripling in Southern California.
The age-old problem with RHNA is cities draft plans for new housing but fail to see those plans translate into actual construction.
City officials maintain construction is subject to the whims of developers and the housing market. The problem is even more complex in “built-out” cities, they say.
“You’re talking about land that already has things on it … so most of our future housing will come from redevelopment simply because we just don’t have a lot of empty land to dedicate to new housing,” said Anaheim city spokesman Mike Lyster. “It is a challenge, a perennial challenge, in California for somebody to come in and buy land in our city at a very expensive rate.”
While it’s true cities don’t build housing, there are things they can do to spur development, said Steve Pontel, former president of affordable housing builder National CORE. By ensuring political squabbles, regulatory issues and infrastructure problems like roads and sewers are resolved beforehand, “they could significantly accelerate the actual development of affordable housing — and all housing actually,” he said.
Ben Metcalf, managing director for UC Berkeley’s Terner Center for Housing Innovation and a former state housing director, said the main obstacle is the lack of subsidies for low-income housing.
“Although the state has made some big investments over the last couple of years, it still isn’t anywhere near the total that’s needed,” Metcalf said. “The ability of the cities themselves to raise the funds for affordable housing, it’s always going to be limited.”
A $180 billion solution
In a 2021 report, the California Housing Partnership argued the state could meet all its affordable housing needs by spending $18 billion a year for 10 years. It could come up with that money by setting aside 5% of the general fund for affordable housing production — similar to the Proposition 98 funding guarantee for public schools.
“Eighteen billion dollars a year for 10 years is what it would take,” said California Housing Partnership CEO Schwartz. “If we considered affordable housing production essential infrastructure, … we can achieve that amount.”
Kirkeby, the state deputy housing director, said she’d be more sympathetic to that argument if cities and counties did less to obstruct affordable housing.
“That is the opposite of what we see,” she said. “We see jurisdictions adding significant costs and delays to the projects before them.”
In addition, local governments can get money for housing-related projects through the state’s Permanent Local Housing Allocation program. Many don’t even apply. “They’re leaving funds on the table,” Kirkeby said.
Many city officials agree that local governments should do more to encourage affordable housing production. But several maintain their responsibility is limited to establishing sufficient zoning and effective housing policies.
“Too often, the limitations of the role that cities play in the production of housing are under-reported and misunderstood,” Lakewood City Manager Thaddeus McCormack said in an email. “You have no doubt heard the refrain that cities don’t build housing, developers do. It’s a true statement.”
Other cities said they failed to file annual reports, so state numbers don’t reflect their true level of homebuilding.
Kirkeby estimated 5%-15% of municipalities fail to file annual progress reports as required every April.
Officials at the cities of Lynwood and San Bernardino said they failed to file annual progress reports in five of the last eight years due to staffing problems and, in San Bernardino’s case, a 10-year bankruptcy that only ended last August.
Had the reports been filed, would they show San Bernardino met its goal of permitting 4,384 homes by 2021?
“I doubt it,” city spokesman Jeff Kraus conceded.
Similar cities, divergent outcomes
Lynwood and Norwalk both are mid-sized LA County cities dominated by Latino households with low- to moderate incomes.
Yet, their pace of housing development could hardly be more divergent.
Norwalk issued permits for 393 homes during the 2013-21 planning cycle, almost double the 201 units the state mandated it plan for in 2013. Those homes included 204 units affordable to low- and moderate-income households.
State data show, however, that Lynwood issued permits for just 31 of the 494 housing units the state mandated in the same cycle. Although required to promote development of 276 low-income units, none of its permits were for affordable housing.
Gabriel Linares, Lynwood’s new community development director, said low numbers are due in part to undercounting since his city missed five annual progress reports. For example, the numbers don’t include a 66-unit apartment building now under construction.
Still, it’s unlikely Lynwood met its state housing goals, he conceded. Lynwood’s higher poverty and crime rates and lack of developable space make the city less attractive to developers.
“If the state were to dump millions of dollars and allocate it towards affordable housing, I’m sure the city would go ahead and take it and then dish it up to developers so that they can build these affordable houses,” Linares said.
So, what’s Norwalk’s secret?
City records show 40% of its affordable housing permits were for accessory dwelling units, or granny flats, which tend not to draw opposition, said Norwalk City Manager Jesus Gomez. Many others are for affordable senior units, which local residents also welcome.
But when neighborhood opposition surfaced for the 60-unit Veterans Villas affordable housing project, the city and project developer took steps to allay their fears. They held community meetings, open houses and even provided transportation so concerned residents could visit similar projects in the region, Gomez said.
“That is one of the secrets. Having people feel and touch and look at the actual units,” he said. “We were able to have the residents look at the inside of a unit and actually speak with a resident there. The manager said they can ask any question. So we give them full access to information.”
Construction for Veterans Villas is scheduled to start next month.