Let's talk about why Los Angeles's housing shortage will finally start improving in the near future.

Lots of what I've written about is about rezoning questions and how we really do need large-scale zoning reform to make it less goddamn expensive to live in California. (Bill SB50, which would have allowed apartments near train stations, fell short early this year.) But SB50 or no SB50, LA's zoning is going to have to change dramatically in the next few years because of reforms that have already gone through.

How we got here

First, a little background. For most of California history, the state usually kept its nose out of local housing decisions. But as part of the reforms of the 1970s, the state started actively tracking how much housing would be needed in the various regions of the state, and created a regional planning process to determine where new housing should go. It's called the Regional Housing Needs Allocation (RHNA), and it required local governments to zone enough housing to meet regional targets at different income levels. There are separate targets for very low-income, low-income, medium-income and market-rate housing. The cutoffs to qualify for subsidized affordable housing are way lower than you think.

Housing type LA County income cutoff for a family of 4
Very Low-income $56300
Low-income $77300
Medium-income $92750


Until very recently, RHNA was largely worthless, because RHNA was toothless. There was no accountability for cities who failed to meet their targets, and in any case the targets were set far too low to keep up with demand. On top of that, rich cities would lobby heavily during the RHNA planning process to keep their targets low. They usually succeeded. In the 2013-2021 RHNA, Beverly Hills was given a target of building exactly three new units of affordable housing and zero market rate housing. This is in keeping with the policy of the last fifty years, where rich cities haven't grown at all.

City 1970 population 2019 population
Beverly Hills 33,416 33,792
Manhattan Beach 35,352 35,183
San Marino 14,177 13,048
Santa Monica 88,289 90,401
South Pasadena 22,979 25,329


The 2017-18 reforms

This all changed in 2017 and 2018 with three major reforms to the RHNA process. First, the targets were reformed to require cities to play catch-up. That is, if a city missed its previous target by 500 units, and was projected to add another 500 units, they'd have to zone for 1000 units, not just 500. Second, the state attorney general's office got the power to sue cities who refuse to meet their targets, with potentially enormous liability for noncompliance - up to $600,000 a month. On top of that, if a city submitted a RHNA plan that the state didn't approve of, the state could withhold state funding. (The governor made an example of Huntington Beach after it flatly refused to zone for enough new apartments.) Third, and most critically, if a city didn't its RHNA targets, cities would be required to approve any development that meets the local zoning rules and provides subsidized affordable housing. The new RHNA targets are way, way better than the old ones, if you want to be able to afford a house in LA.

City 2015-21 housing target 2021-29 housing target
Beverly Hills 3 3,096
Manhattan Beach 38 773
San Marino 2 398
Santa Monica 1,674 8,874
South Pasadena 63 2,061


What these changes mean

It's actually quite elegant. If a city doesn't build enough market-rate housing, any project that's 10% subsidized affordable housing can be built, period, if it meets the existing zoning, and the city's required to approve it in 60-90 days. If a city doesn't build enough subsidized housing, any project that's 50% subsidized affordable housing can be built, period. And if a city decides to kill a project that meets the law, the city could be held liable for the developer's legal fees. In Cupertino, in NorCal, these reforms have already broken the logjam around the Vallco Mall, a dead mall across the street from Apple HQ. Vallco's owners wanted to demolish the mall and build offices, shops, and 2,400 apartments - 50% of which would be subsidized affordable housing. Vallco got clearance to proceed in months, not years, because Cupertino wasn't meeting its RHNA targets, even under the old rigged rules.

These modifications to the RHNA system are less flashy than SB50, but they have largely the same effect. Simply put, places like Beverly Hills and Laguna Niguel will have to decide where to build new housing. They could spread out the density; they could put up one really, really big high-rise, or they could put up a bunch of six-story fast-casual apartments

But what they can't do anymore is block new housing the way they've been doing for the last fifty years. That era is over.

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