Here's a question. When's the last time you saw an ad for an apartment for rent or a house for sale and thought, yeah, that's a fair price.
Like places aren't renovated when they're charging the arm and the leg. So it's very interesting to see, like there's not modern at all, and I'm paying two thousand or whatever for a one bedroom. I think it's crazy.
Now we're living at a place that is much more expensive than what we want, and I'm just forced to compromise elsewhere and make it work.
We were these second people to tour that place, and we just had to commit on the spot there because we don't have time to like really be wishy washy about it.
The fact is the US doesn't have nearly enough affordable housing, especially DNSE housing like apartment buildings and duplexes and triplexes, and we've gotten worse as a nation at building them than in past decades. Partly that's because it can be hard to find a place to put them. Many people have strong feelings about not having certain buildings in their neighborhoods, especially if it's dense housing or designated as affordable housing.
It's the Nimbi effect. Sure build them somewhere, just not in my backyard.
Even though the arguments can be very logical about why this neighborhood in particular might not have an apartment building, If you just apply that across the whole nation, what you get are these disastrous effects like we see today.
That's Bloomberg City Lab reporter Kristin Capps. He's been following changes in housing policy for years and Christian Rights that now states with some of the most severe housing shortages, like California, are getting serious about enforcing affordable housing plans that are already on the books, and in some cases pushing cities to build more with consequences if they don't. Or is City Lab reporter Sarah Holder puts.
In, if you don't build a little, we're gonna make you build a lot, or if you don't build anything, We're going to make you build something.
I'm West Kasova today on the Big Take States say yes in your backyard, Sarah. We hear a lot these days about the housing shortage, how hard it is to find an apartment or buy a house. We used to waste you about New York. Oh you can't find a place, But now that describes just about everywhere can you kind of paint us a picture of this nationwide housing shortage?
Yeah, I mean one of the most striking examples that I come back to year after year is this annual report from the National Low Income Housing Coalition, which shows that there are no states, and no cities and no counties where a minimum wage worker can afford a two bedroom apartment working a standard forty hour a week. So
let that sink in. Nowhere in the country, even where minimum wage is twenty dollars an hour or seven to twenty five an hour, which is the federal minimum wage, can someone working a standard work week afford to live in a modest two bedroom And in only nine percent of states can people working a minimum wage job afford a honest one bedroom. To give some contacts, in California, you have to make forty dollars an hour to afford
a place to stay. And so that speaks to sort of the broader affordability crisis that we're dealing with as a nation. That also speaks to the fact that we're dealing with a shortage of both affordable and just general housing in this country. The National Low Income Housing Coalition also estimated that there's a shortage of about seven million
affordable units in the country. Fannie May estimated in twenty nineteen that there is a housing shortage of about four million units nationwide, which could have only gotten worse during the pandemic as there were labor shortages, supply chain issues, and we've seen sort of the effects of that.
What's the rental market? What's the picture for people who want to buy a house?
Opportunities for homeowners are limited to It used to be the case that a young family could buy a starter home, invest build up some equity, kind of move up as
their family grew. Those starter homes are harder and harder to come by, and they're such lucrative investments that big institutional buyers have jumped in to buy these homes turn them into rentals, and so what were once single family homes for buyers are now the kind of properties that people are hoping to rent or even struggling to rent because you know, they could raise the rents because opportunities for renters are so limited.
And I guess that's one reason why we have this housing shortage, Sarah, what are some of the other reasons, Like why are homes so hard to find?
One of the issues is that there just hasn't been enough building to keep up with the demand. Especially after the Great Recession, building slowed down. Housing prices have been rising faster than wages can keep up, and zoning restrictions are making it really hard for new housing to get off the ground, even where it's needed.
Sarah, can you just tell us what exactly is building zoning?
So zoning rules determine what can be built where in American cities. For a long time, zoning was pretty loose. You know, American cities could build a single family home, they could convert it into a three story development. But after some of the struggles of urban renewal, which saw a lot of destruction and a lot of tearing apart of communities, especially communities of color, there was a movement
to down zone whole swaths of the country. So instead of being able to build a single family home here, a three story home there, having sort of diverse and multi use kinds of neighborhoods, there's an effort to restrict building more so in some places you would only be able to build a single family home for miles and miles. It led to a situation where in California, for example, two thirds of the land was restricted to only build single family homes until very recently.
One thing that's really interesting is that a lot of cities have zoning that would not allow the cities that exist to be built today. In Seattle, for example, you have whole areas that are zoned for single families where people really value the character of the local community. But what's actually built in those neighborhoods and in those streets are smaller apartment buildings, duplex's, triplexes, things that have been allowed over time, things that have changed over time, the
way that cities kind of normally typically evolve. So when people local homeowners talk about the character of the community they cherish and wanting to keep that zoning that's restricted to single family homes. Especially, that's not actually the character of the community that they're often describing.
So what is the reason for this restrictive zoning? Where are they trying to achieve with it?
A lot of the times it is homeowners that want to preserve that character that Kristen was talking about. They are used to a cul de sac a neighborhood with these single family homes, and they're afraid of what might happen if an apartment or even a duplex or a triplex was built, and it ends up sort of preserving homogeneity of neighborhoods and separating density from sprawl.
Yeah, and density is something we hear about a lot. How much of this is just concerned that we're going to pack so many people into small places that it's going to make it an unpleasant place to live.
You know, those fears about infrastructure, those fears about local use, traffic, noise, cars on the street where people are going to park, always get raised in any kind of conversation, But there are really negative impacts of not allowing any density, of keeping very exclusive communities. While it might be very good if you are a homeowner in that area and you have access to great amenities like good schools and great parks and low noise and low crime, it's bad to
exclude people from that. And it also hurts those families who are on the inside eventually, you know, if they have kids, those kids, when they come out and are trying to make their own way, don't have the incomes to afford to live in those exclusive communities, have to live,
you know, somewhere else. So even though the arguments can be very logical about why this neighborhood in particular might not have an apartment building, if you just apply that across the whole nation, what you get are you know, these disastrous effects like we see today.
One of the other things that happen when there is this exclusive zoning and neighborhoods is there becomes a big housing jobs mismatch, a spatial mismatch where people who do the work in the cities can't afford to live nearby those jobs. And that also has ripple effects both for people who are having to commute long distances, contributing to carbon impact and a reduce quality of life, and also for folks who live in these cities who are not
having access to a functioning and stable economy. People can't afford to live where they work.
Zoning also serves as the de facto color lines. In the United States. Racial segregation is no longer legal. A neighborhood can't say that no people of color can move in, that no families of a certain size can't move in, no immigrants can move in. What we have seen is that by communities setting up these rules about what kinds
of housing can be built. They have managed to set up barriers to entry that affect primarily renters, that affect a lot of people of color, minorities, and it has resis resulted in segregated communities across the United States, many decades after segregation was ruled illegal and unconstitutional.
After the break, California gets serious with cities that don't build housing, Kristen, A lot of states have tried to figure out what to do about this problem. You recently wrote a big piece that focuses on California, which is a place I think a lot of people know as being a place where housing is very expensive, and you write about this state housing policy called a builder's remedy. It's kind of complicated. Can you explain it in simple terms?
The state of California has set in recent years certain goals for housing production across the state. It is said to cities and communities, you've got to start allowing housing to be built, and here are the numbers that you need to meet as a region, as an area. If cities don't meet those targets and don't permit that housing, then the thing that they fear most happens. The state comes in tells developers, there's a zoning holiday, you can
build what you want. That's what cities fear. They don't want builders coming in without they're having some say on what gets built. So a builder's remedy or a zoning holiday. Is that kind of triggered situation when a city isn't meeting its goals and a state is sepping in said you're not doing enough, so we're going to do it for you.
So it's kind of like a carrot and a stick at the same time, Is that right, sir?
Yeah, it's saying if you don't build a little, we're going to make you build a lot, or if you don't build anything, we're going to make you build something.
And so the idea here is that this never actually happens, that it's such a punitive step that states will fall in line so that the builders don't just get to come in and build high rises everywhere and there's nothing they can do to stop it.
Right, you're not actually supposed to trigger the builder's remedy. The state never intended that. They didn't outline it that way. A State Senator Scott Wiener, who's been really instrumentally designing a lot of these housing laws for California over the last few years. He told me, it's a chaotic situation when the builder's remedy kicks in. Ideally we don't want it to kick in.
So how has this worked out, Sarah? Since they put this in place in California, are cities now snapping to attention and approving housing projects.
The impacts of this have been small so far, but we're already seeing some cities get into fights with the state and the state Attorney General over whether they're meeting their housing production goals and the builder's remedy has been brought to bear.
As you might imagine, a lot of this activity is focused around the San Francisco Bay area and the Loss Angelis metro area. In those places, they had mixed results when it came to delivering their actual housing production targets, basically certifying a plan that would say we're going to build this much like the state has told us to, this is how we're going to do it. What State Senator Scott Weener told me was that in his discussions,
you had certain cities where it was easy. You had certain cities where they had to be dragged to the table to make these goals, and then you had a few that said, no way, we're not doing it. We don't really think that's a law. For example, in the Bay Area, a suburb Sonoma said no thanks to the builder's remedy. In Los Alto's Hills, which is in Silicon Valley, they said they just weren't going to take these applications. And what happened, Well, now the state has to enforce
its law. This is the outcome that nobody wanted, but it's happening. Huntington, for example, which is in Orange County, past a local law banning builder's remedy applications, so the state Attorney general sued.
In some places, this is starting to work as intended. In San Francisco, for example, which has been historically pretty resistant to change in its zoning into building, they drew up an ambitious plan to build eighty two thousand new units by twenty thirty two, and Kristin describes that that was done out of fear of what might happen if developers were given this free reign that we're talking about.
Are there any places where the city didn't meet the state requirements? Builders moved in and did build new construction against the city's wishes.
Yes, that's happening. There are a few examples across California where builders are taking advantage of a zoning holiday. In Santa Monica, for example, the city kind of got roiled by this argument about exactly how they were going to meet this housing production plan. They couldn't come together. The deadline came and passed, and so developer showed up with plans to move about sixteen projects, some reaching up to fifteen stories tall, which is just way, way taller than
anyone in Santa Monica wants to build. So that has a way of focusing the mind, and suddenly they got their housing production targets in order.
Christin, you also report that there's kind of another wrinkle, which is, even though developers are able to move in and build in places where they don't meet the state requirements, they don't necessarily want to do it. They don't want to have a big fight with a city.
Yeah, that was one of the most interesting things I learned from my reporting, and that was from talking to an advocate named Sonya Traus. She has led this movement to try to use the law on behalf of people who might live in these apartment buildings were they ever built. What she explained to me is that developers don't really want to have these knockdown, drag out battles with local officials who they work with every day and need to
work with every day. Oftentimes, if a city comes back to a developer and says no, this plan won't work, the developer will just change course. They can build something else, They can build somewhere else. So it's been a goal of housing advocates who are really passionate about this whole project to zoe those cities in order to get those projects pass, even if developers aren't the one fighting tooth and nail to make that happen.
Another thing Trus said that I thought was interesting was that if developers don't want to fight these battles and they end up going somewhere else, the somewhere else they often go is potentially more economically desperate, less exclusive already, and so the exclusive neighborhoods that are really ready to fight new development stay exclusive, and the poorer, less affluent, more open to new housing neighborhoods end up absorbing a lot of that growth when.
We come back. Is one solution to the housing crisis. Suing the suburbs Kristian before the break, Serah was talking about how advocates are pressing pretty hard for more housing, and one of the things we're seeing is this sue the suburbs movement. Can you tell us what that is.
Yeah, advocates want to hold these places accountable. They want to compel them to follow state law and build housing even when they do not want to. I'll give you an example in Lafayette, California. That's a small town in Contra Coasta County, a very affluent area. In twenty eleven, a developer approach the city with a three hundred and fifteen unit apartment complex on a twenty two acre property,
pretty standard. The city shot that down, so the develop leupper came back with proposal for forty four single family homes. Four years later, the city had approved this plan. That's when trial's housing advocate in California, who's let a lot of these sue the suburbs efforts, sued the Suburbs and said, no, you actually do have to approve that apartment building. And it went, you know, back and forth for years and years.
The California Supreme Court just settled that matter. This is a twelve year saga over a three hundred plus unit apartment building. So that's the kind of inertia that we're talking about overcoming. And it's an uphill battle for these advocates and these attorneys who have really seized on it. But they're hoping that it will snowball. Cities will see this, They'll say, I don't want to be sued for the next twelve years. I'm just going to approve the apartment building.
Sarah. We're talking all about California, but it's not just there. If you go all the way across the other side of the country in New York, we're seeing Governor Kathy Hochel also pushing for more housing development. What's going on there.
So Hokel had an ambitious plan to compel suburbs to build more housing, especially near transit. The numbers would have been really ambitious. There was talk of building eight hundred thousand units over the next decade, but the Senate and the Assembly both rejected her proposal. During the budget process, they were favoring an approach that would offer more carrots than sticks, so basically incentivizing and rewarding suburbs that did build housing. Instead of punishing suburbs that didn't.
This is going to be something I'm going to continue to work on until we solve this, and that's my commitment to New Yorkers. I feel a little bit like Wayne Bretzky, you missed one hundred percent of the shots you don't take. I took the shot.
The dissolution of this landmark plan that Hochel was pushing to produce more housing in New York State over the next decade really exemplify sort of the backlash from the again typically wealthier suburbs to allow housing to be built in their backyards. And it's also a really powerful constituency in New York. It also showed that these issues don't leave so neatly across party lines, like you think of New York State as this blue state. At the Hochel
she's a Democrat. A lot of people in the state Senate and the Assembly are Democrats as well, but that doesn't mean that they're open to new housing.
New York tried to borrow from all these different places. They had an element that was builder's remedy from California. They had parts of Massachusetts affordable housing prescriptions. They had parts of plans in New Jersey, they were looking internationally and they had a really complicated blend of carrots and sticks to really really overhaul housing not just in New York City but across the state. And it just ran
against the shoals of exclusive suburbs. And until those lawmakers see the peril of keeping housing out see the cost that that means not just for the state but for their communities too, it's going to be really difficult for even a unified government all the way to pass this kind of legislation.
Christin, you mentioned Massachusetts as a place that New York is looking to for ideas. What are they doing there that New York would want to copy.
They had this law on the books. It's called Chapter forty B. This law and a lot of laws that we're talking about that have been around forever, haven't totally been enforced, who have been on state books, were passed after Martin Luther King's assassination, and this long Massachusetts requires communities across the state to guarantee that at least ten percent of housing everywhere, every town, every city has to
be deemed affordable. That was meant to allow for more integration across neighborhoods, and they have a builder's remedy too for cities that aren't meeting that target.
And how did that turn out?
What advocates say in Massachusetts is that, you know, it's mostly happened around the Boston area, as you might expect, and there have been some suits to force different cities to comply. It's worked, and yet Massachusetts still has an affordable housing program. And that's because it's a pretty arbitrary thing to have state lawmakers say in nineteen sixty nine, this is going to be the level of affordable housing we're going to have, and that's what we're going to
use for the next fifty sixty years. So what they're looking to do is to you know, change those numbers, build a more modern program, get different ways of making sure affordable housing is built in places that don't want to build it.
Sarah, I guess this entire conversation really illustrates where we began, which is to explain why it's been so difficult to build affordable housing. There are so many entrenched power centers, all of them fighting each other. And you mentioned something interesting. You know, we hear about Nimby all the time, not in my backyard. But there's this other side of this movement among advocates, the yimbi yes in my backyard movement.
Is this actually gaining momentum? Do you think over time we are going to start to see more housing being developed.
You can see the change just in the amount of policies that are being passed in the state level. In California, Kristen and I have covered Senator Scott Wiener's struggle year after year to get these kinds of sweeping up zoning bills pass and we've covered them as they've failed and now as they've succeeded. That's being mirrored in other states like Montana and even New York's push to try and up zone was sort of a symbol of how far
this movement has come. We talked a little bit about how slow some of the progress has been in seeing results on the streets in terms of the number of housing units actually built regardless of these policy changes, or you know, even the number of unhoused people on our streets. But you have to remember that for as long as it takes for policy to be passed, it also takes a long time to build things. You know, there's getting
the budget together, getting the permits together. The supply is the labor, and you know, inherently some of the things getting approved today under these policies take years to finish. That's a whole other problem that advocates are also tackling. It's definitely seems like there's been a ground swell in terms of momentum and urgency, and the question is when we'll be able to see that when I go out and look for an affordable apartment to rent.
And Sarah and Kristen, what do you think the answer to that question is, you've both been covering housing policy for a while. What are you looking for is you continue to write about this.
I'm interested in looking at what other states and what other cities sort of carry the torch from places like California. I'm also personally really interested in tenant protections and other sorts of policies down the stream that can prevent displacement of people who have found affordable units in this difficult housing market.
I'm interested to see how these different efforts to promote housing wind up getting polarized. In Montana, this really fascinating thing happened where they look to California and all the Californians that they fear or moving to Montana and said, we don't want that, we don't want those housing problems. And so socially conservative Republicans united with progressive Democrats and passed the sweeping number of housing bills like within like
a single hunting season. It's just under a year. They went from talking about the problem to passing bills that California had taken a decade to get done. I'm interested in seeing how this plays out, especially when we're talking about builder's remedy or zoning holiday. That's a state forcing cities to act, and you can imagine a lot of places I'm thinking Texas, Florida where a governor might say to liberal cities, you got to start building homes. And
I have the power to make that happen. And I wonder why we haven't seen more of that.
Kristin Sarah, thanks so much for coming on the show, Thanks for having us, thanks for listening to us here at the Big Take. It's a daily podcast from Bloomberg and iHeartRadio. For more shows from iHeartRadio, visit the iHeartRadio app, Apple Podcasts, or wherever you listen. And we'd love to hear from you. Email us questions or comments to Big Take at Bloomberg dot net. The supervising producer of the Big Take is Vicky Burgalina. Our senior producer is Catherine Fink.
Our producers are Michael Falleero and Mobarrow. Bill de Garcia is engineer. Original music by Leo Sidron. I'm West Kasova. We'll be back tomorrow with another Big Take.