The State of California recently put its local governments on notice when it rejected virtually all of their housing plans. Faced with growing numbers of people experiencing homelessness, the state government is directing its lower levels of government to come up with plans that will actually see more affordable housing get built.
An article in Slate focusses on the evolution of the City of Atherton’s housing plan, which has gone from zero sites where affordable housing will be built to one site with three units.
If any local government housing doesn’t comply with state housing law, the state government can invoke ‘builders remedy.’ Builders remedy effectively abolishes the local zoning code, and opens the community up for mixed- or moderate-income housing developments. Slate reports that when builders remedy was invoked in Santa Monica, there were applications for 4,000 building permits. Santa Monica is only one example: builders remedy has been invoked other suburban cities in southern California. Now the state is reviewing the plans from Atherton and other cities in the northern part of the state. One local resident predicts Atherton will find itself in a builders remedy bonanza.
In the absence of a builders remedy, direct funding is another way that upper levels of government can steer change at the local level. The U.S. government has been doing this for some time with the funding it disburses for homelessness programs and services. In order to be eligible for the funding, applicants must have a housing first program and participate in local coordination activities. Zoning has recently been added to the criteria for assessing eligibility for federal housing programs1.
State governments also direct funding to local governments. A research paper from the Institute of Municipal Finance and Governance (IMFG) studies the levels of federal and state funding to the largest 148 cities in the United States. Local governments typically receive far more money from their state government than they do from the federal government.
The authors of the IMFG paper discuss that intergovernmental transfers (direct funding) can be targetted to strengthen the fiscal health of local governments. Presumably, the same approach could be applied to other issues that are difficult to resolve locally. Zoning reform could be one of those issues.
Here is a link to the article in Slate: What Kind of NIMBY Is Steph Curry?
and a link for the research paper published by the Institute of Municipal Government and Finance: Measuring the Fiscal Health of U.S. Cities
