Affordability

Upzoning and the issue of Affordability

Chris Jones, 11/1/21 Community Forum

There is no affordability requirement for SB 9. It mandates an increase in density, but doesn’t really say anything as far as what those homes should cost and how much people are going to spend of their hard- earned paychecks to live there. On top of that, we’ve seen in other places that have gone on to do upzoning that they have seen a lot of negative effects and not as many positive effects as we are hoping to see.

In New York City, they saw increased cost and gentrification and a reduction in the non-white population of areas between 5 and 9 percent on average. That means the idea that we’re going to reverse the legacy of redlining, that we’re going to allow more people of color to move into higher resource areas…that’s not what we saw happen in NYC when they did upzoning.

As far is pricing is concerned – in Chicago, Yonah Freemark did a study that showed that upzoning by itself increases prices in the short- term because multi-family zoned land is worth more than single-family zoned land. So, the underlying land price increasing drives up the real estate prices.

In Minneapolis – a city that is famous for eliminating single-family zoning like we are looking to do- they saw that prices went up between 3 to 5 precent on affected parcels. I quote from the study that “plan related price increases are larger in inexpensive neighborhoods and for properties that are small relative to their immediate neighbors.” In non-academic speak that means that it gets worse in lower income neighborhoods. Prices go up across the board, but it hurts the people who need the affordable housing the most.

In Vancouver, another city known for increasing its density, Patrick Condon, a well-respected city planner and professor of urban planning, again found that density by itself doesn’t address housing costs. He said, “In all of the cases I’ve examined in North America, what happens when you do a rezoning is you let the hungry dogs of land price speculation and inflation loose across the landscape with the intention of enhancing affordability.” In other words, we allow increased density and developers and those with deep enough pockets to afford the construction – they come and buy up the areas. They build it out for rent and they charge what the market will bear. The price of housing per square foot just goes up to what the market will bear.

In conclusion, we need to craft a Sacramento City ordinance that does not just simply allow the state level ordinances to go into effect, but is very intentional and targeted towards what we can do to prevent displacement and actually accomplish the goals of providing enough affordable housing for the people who live in Sacramento and the people who will move here in the future.