Abstract
When housing affordability becomes a problem, it can have complex effects on society. First, it can damage local and regional consumer economies if moderate- or higher-income households refrain on spending because they devote more of their disposable income on housing costs. The real problem is when housing affordability takes away housing opportunities for low-income households. Housing advocates pressure local governments when land use decisions exclude low-income residents from housing opportunities. Homeowners and their interest groups pressure local governments when they feel that housing developers threaten their communities by proposing more housing projects, most often, affordable housing. Most academics found that restrictive regulatory environments and constrained geography have created housing shortages in many California regions. Advocates for housing, and the poor, pointed to the power of homeowners in California (to use the legal system to block housing developments) and shortages in federal, state, and local funding (to subsidize more affordable housing) as major factors in the affordability crisis. My study sought from local government officials in the Sacramento region what their thoughts were on the causes of the housing affordability problem. Through interviews with eight local officials, I found that the problem in the Sacramento region is a combination of those issues raised by academics and advocates. Analyzing their responses, I concluded that the foundation of this complex problem was the conflict between state and local priorities with respect to growth and housing opportunities. Given the strict environmental and housing regulatory environment in California, an absolute solution will likely never surface. Policy makers must understand that developing any kind of housing in regions in the state require a balance between private interests and the interest of society at large. The degree of balance has long favored homeowners with the cost of fees and requirements imposed on developers passing directly onto housing prices. This has forced prospective homeowners to bear the external cost of growth. It has also caused contraction in the housing market making housing a scarce resource, pricing out the lowest-income populations. The solution I propose gives homeowner groups continued ability to shape their communities and protect their home value, while contributing their fair share of the cost of growth through tax assessment districts similar to Mello-Roos. The solution would also give more power to the Sacramento Area Council of Governments to influence land uses from the regional level.