California’s state legislature is currently considering AB 1401, a state bill that would prevent municipal zoning codes from imposing parking minimums near public transit. The bill would mitigate one of the worst elements in California’s morass of anti-growth housing regulations. Parking minimums constrain development in urban areas, as underground parking garages can cost tens of thousands of dollars per spot.
Many California environmentalist groups and affordable-housing activists, however, have opposed AB 1401. And AB 1401 is far from an isolated case: left-wing interest groups are often the fiercest supporters of housing regulations that impoverish California’s working class while enriching landowners. The reason: complicated, capricious development laws give politically connected groups more opportunities to extort concessions from developers.
In the case of AB 1401, for instance, a coalition of progressive opponents insisted that the law should be passed only “with amendments to ensure that parking reductions remain coupled with the density bonus framework for mixed-income housing projects.” This means, essentially, that developers should still be forced to provide more parking unless they rent out much of their properties at below-market rates at their own expense. “Density bonuses” are a feature of many zoning codes in California and elsewhere, letting developers build more densely than the requirements of the zoning code if some of their units are rented at below market price. Density bonuses create a perverse incentive for advocates of subsidized housing to make the base zoning code stricter, so that any new development project has to use density bonuses to be economically viable. Such policies may produce a few extra subsidized housing units, but they also worsen market-rate housing shortages for everyone not lucky enough to snag a subsidized housing unit.
Other provisions of California development laws allow for more blatant extortion. The California Environmental Quality Act (CEQA) allows members of the public to complain about the environmental impacts of development projects and has very broad rules of standing. “CEQA is intentionally designed for broad public enforcement,” notes one environmentalist group’s summary, “and in general, anyone who has an environmental concern with a project has the standing to bring a lawsuit if the legal violation they are alleging was raised during the administrative process.” CEQA also defines environmental impact broadly: at least in some circumstances, it is possible to object to a development because it will make parking more difficult. A CEQA lawsuit can force developers to incur years of delay and hundreds of thousands of dollars on additional environmental reviews to a project—enough of an incentive to get developers to do whatever it takes to avoid one.
It’s no surprise, then, that CEQA lawsuits are widely abused. One analysis by Bay Area attorney Jennifer Hernandez estimates that 80 percent of CEQA lawsuits are filed against infill projects in already developed areas, belying the law’s ostensible justification of protecting California’s wild areas. One of the biggest abusers: California construction unions, which routinely threaten meritless CEQA lawsuits against projects that don’t use union labor. An article from 2017 published by the San Francisco-based progressive, pro-housing think tank SPUR noted matter-of-factly that construction unions bore much of the responsibility for scuttling one CEQA reform attempt because “they rely on CEQA lawsuits to get developers to use union contractors.” The website Phony Union Tree Huggers provides a large compilation of CEQA complaints filed by union front groups. To take one recent example of many, in 2019, East Bay Residents, which described itself as an “unincorporated association of individuals and labor organizations,” complained to Oakland’s city government under CEQA about noise and emissions from construction equipment on a planned 37-story residential tower in the city center, 200 yards from a subway stop. Unions have even used CEQA lawsuits to file complaints against solar energy projects.
San Francisco has a similar local ordinance under which any citizen can protest a new development anywhere in the city. This was used most infamously by the nonprofit Calle 24, which claims to advocate for the interests of the Latino community in the city’s Mission District. Calle 24 delayed a local laundromat owner’s plan to sell his property to a housing developer with a series of nuisance complaints—arguing, for instance, that the laundromat deserved historic preservation because neighborhood Chicano groups had used it as a meeting site decades earlier. Calle 24 all but admitted that the complaints were largely pretextual: notwithstanding its own complaints about the historic significance of the laundromat, the group even tried to force the owner to sell to a nonprofit organization that would redevelop the property into below-market housing with government subsidies.
Perhaps the most charitable explanation for many California progressive organizations’ opposition to reform is that they have grown so accustomed to housing scarcity that they can no longer imagine how substantial reforms might work. Tiny concessions extracted by whatever means necessary are the best that they can do. Fortunately, however, such voices represent only one political faction. Many other progressive activists in the Golden State support AB 1401 and similar laws because they recognize that reforming zoning laws to make them less restrictive could improve affordability. The future of California housing may depend on how quickly the broad progressive movement recognizes that free markets are the way forward.
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