Most local governments in California have finalized their 2021–2029/2022–2030 housing plans. These plans must identify parcels with capacity to add new housing, and unlike previous plans, state law now mandates that they affirmatively further fair housing. State guidelines suggest that local governments identify or create capacity for new housing, especially for low-income households, in high-opportunity neighborhoods. In this report, we assess whether local governments followed these guidelines by analyzing the site inventories adopted by 199 California cities before April 2024. We do this using the Fair Housing Land Use Score (FHLUS), which measures the distribution of housing sites by neighborhood opportunity, using metrics such as household incomes and environmental quality. We can thereby answer the question, are cities meeting their fair housing obligations? The answer is no. Most cities (roughly 80%) disproportionately plan for new housing in their least affluent neighborhoods and those with worse environmental quality, and sites designated for low-income housing are less likely to be in high-opportunity neighborhoods than sites for above moderate-income households. One positive finding is that sites proposed in rezoning plans are better located than non-rezoned sites, even though they are a minority of sites. In addition to reporting the FHLUS, we provide preliminary evidence of whether certain kinds of cities — e.g., bigger, more affluent, or more equal cities — did better at planning for housing in their high-opportunity neighborhoods. We find no significant correlations between cities’ socioeconomic or other characteristics and their FHLUS. The one factor associated with the FHLUS is the spatial distribution of existing zoning: Cities mostly identify sites for new multifamily housing near existing multifamily housing, suggesting an important role for inertia in housing plans. Our findings illustrate how rules for site selection maintain the status quo and demonstrate that unless the state requires new housing sites be created in high-opportunity neighborhoods, California cities will not affirmatively further fair housing.
California’s housing crisis is not just one thing. There are myriad crises, and they are interconnected: housing cost burdens, household instability and homelessness, racial segregation, economic inequality, health disparities, and climate change are all exacerbated by California’s inability to build sufficient housing (especially for lower-income households) and ensure that new supply is fairly distributed across communities and in ways that reduce greenhouse gas emissions. Every day, there’s a news story of people leaving the state for cheaper places, of a renter doing their best to stave off an eviction, or of a community struggling with gentrification and displacement. The politics of housing in the state also sometimes feel intractable: cities continue to rely on exclusionary zoning tactics to thwart new supply, while developers, labor unions, NIMBYs, YIMBYs, and tenant advocates all stake out opposing views of what is needed to solve the crisis. All of this contributes to California’s future housing trajectory feeling grim.
U.S. cities spent much of the middle and late 20th century reducing capacity for new housing through extensive downzoning, leading to a shortage of homes and rising prices in high-demand locations. To combat this, many cities and states are now reversing course and upzoning to allow higher-density housing, usually in targeted locations such as individual neighborhoods or corridors. While these targeted upzones have increased housing production in some cases, they have also led to higher land prices that erode the affordability of new homes. In this paper I introduce the concept of the “zoning buffer” — the gap between the existing housing stock and the maximum number of homes allowed by current zoning — and describe how it affects land values and ultimately the production and affordability of housing. When upzoning produces a large zoning buffer, land values should not increase substantially because land with redevelopment potential is no longer scarce; property owners lack the leverage to demand more from a developer than a typical homebuyer. These properties can transact at lower prices, delivering lower-cost housing to residents. When zoning buffers remain small, upzoning will result in land value increases that are largely captured by incumbent property owners. I argue that improved housing affordability at a city-, metro-, or region-wide scale can only be achieved through “broad upzoning,” defined here as zoning changes that allow at least moderate density (roughly 6-10 units) on a large share of parcels (at least 25%-50%). With zoning reform receiving more attention across the country, policymakers should prioritize broad upzoning over other strategies that may be unlikely to improve long-term affordability.
