I recently learned the political mechanism (and a possible theory of change) for how California can build abundant housing.
SF currently has 900,000 people but only 1/3 the population density of Paris. To get SF to Paris levels, we want to increase the population 3x, to around 3M. That's my rough goal: build 2M units of housing in SF by 2050.
The way California currently creates housing units is through the California Department of Housing and Community Development (HCD). Every 8 years, they develop a new plan to build housing.
As you can see in the graph below, they allocated over 2M housing units across California this cycle:
- 1.4M in LA
- 440k in the Bay Area
- 100k in San Diego
- 100k in Sacramento
This top-down approach aligns with the best practices of housing policy: to work at the state or national scale.
Of the Bay Area's 440k housing units, 80k are allocated to San Francisco. Here's a chart of how many new units each county needs to build:
And as a percent increase:
To show that SF can meet this goal, they need to change their "housing elements" (zoning) to show how it can accommodate 1.25x the allocation (80k * 1.25 = 100k).
Unfortunately, building 80,000 units in SF doesn't get us anywhere close to the 2M-person increase we're looking for. On average, each housing unit holds 2.5 people. So 80k units gives us 200k people.
If we want to get to 2M people, we need to build 800k housing units, 10x more than in the currently allocation. To reach that, the graph should look like this over the next two cycles:
This is a roughly a 2x increase in the number of housing units allocated in each cycle (2M to 8M to 13M).
So: I'm excited by this cycle's housing needs allocation. It increases SF population from 900k to 1.1M. I'd love to see a world that pushes for 3M by 2050.
- This article doesn't dive into the different income bands of housing much. Roughly speaking, In this allocation, affordable housing is 180k/440k = 40%. Seems reasonable this time. For 2030, I'd like to see this go to 30% (as we have more filtering). For 2040, 20%.
- These 2021 housing targets are 2x higher because of SB 828, which is good.
- What I don't understand is how the state mandates that counties actually build. It looks like it's connected to SB 35, which allows the state to force local jurisdictions to build.
- In the end, we want to get rid of Prop 13, Housing Millionaires, and Double Jackpot winners. (Ridiculous racial disparities here.) 441k housing allocation feels like just part of the solution.
- Cool to see a bunch of new housing bills in the Senate https://focus.senate.ca.gov/housing
- This is a great wiki page https://en.wikipedia.org/wiki/California_housing_shortage
- Not totally sure how housing startups should play into building more housing. Everyone hates on AirBnB for removing housing from the market, a reasonable claim. What about something like Zillow? They make money from ads, purchased by property management companies. Seems like they're pretty complicit in housing-as-equity. Is there a way to make their incentive aligned with more homes, not more expensive homes?
- https://a16z.com/2019/11/20/housing-is-killing-the-dream/ mostly just focuses on tx costs (cost to buy/sell) and construction costs. Feels like there's something better.
- Not sure the perfect Race to the Top metric to get states in competition. But something like this: