Ryan McDonald

Remember the Alamo? Controversial state legislation forces hard look at South Bay housing

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Three condos near completion in South Hermosa. The condos replaced an eight-unit apartment complex, known as the Alamo. Photo by Kevin Cody

First of two parts

By Ryan McDonald

Redondo Beach Mayor Bill Brand keeps a well-worn piece of paper in his pocket. He pulls it out and unfolds it when he talks about housing, which, these days, is often. On the paper is a long, hand-written list of pending state legislation that would change the balance of power between Sacramento and local government in land use matters, in an effort to address the California housing crisis.

The housing crisis is bursting with statistics: California home prices are the highest in the country; one-third of California tenants fork over more than half their paycheck to a landlord every month; about 130,000 of the state’s residents are homeless. But perhaps the most telling one is how many laws are being proposed to cure it. According to the League of California Cities, about 50 housing bills have cleared the Legislature in the last three years; some have already been amended. The League estimates there are at least 120 other housing-related bills in various states of readiness circulating through the Legislature.

This bill would limit design review, Brand said in an interview, shaking his head and gesturing at the list. That one would cut down on parking requirements. Still another would designate “high resource areas” for added density.

“You lose track of which one does what. And then they amend ‘em. City staff are supposed to keep track, but they can’t keep up,” Brand said.

There is one bill, though, that Brand doesn’t need any paper to remind him of: Senate Bill 50.

Proposed by state Sen. Scott Wiener (D-San Francisco), SB 50 would have allowed up to four housing units on land zoned single-family throughout the state, and limited cities’ ability to block four-to five-story apartment buildings proposed for sites close to transit hubs or in jobs-rich areas. After sailing through two previous votes, SB 50 ran aground earlier this month when Sen. Anthony Portantino (D-La Canada-Flintridge) announced that the bill would not be leaving the Senate’s Appropriations Committee, which he chairs. The bill has been placed “on suspense file” and appears to be held for the rest of 2019. But both sides of the debate agree that the pause won’t last. In a statement issued last week, Senate President Pro Tem Toni Atkins (D-San Diego) said that she looked forward to working with Wiener to produce “workable solutions that can be voted on next year.”

SB 50 galvanized state politics like few bills have in the past decade. It earned the backing of powerful interests in Sacramento, including labor and developers. The New York Times felt compelled to weigh in from 3,000 miles away. “The solution to California’s housing crisis is more housing,” the editorial board said in its endorsement. But it also earned the ire of local governments up and down the state, including all three Beach Cities.

“We might as well just dissolve the City Council” if SB 50 were to pass, Brand said.

A stranger to the state might wonder why so much has been made of SB 50. The desirability of the South Bay and other sought after California real estate stems from things over which city government has little control, and which SB 50 therefore would not change: its location, its climate, its schools. (Although some opponents claim it would lead to overcrowded classrooms.) But while Wiener has not yet been accused of trying to blot out the sun or divert the Pacific, there is another element, harder to define, but even more frequently invoked and just as jealously guarded, that opponents say the bill does threaten. It goes by many names: “charm,” “character,” “culture,” “lifestyle,” and others in a long list of hazy descriptors. It is the sum of things the government of one town does to differentiate it from another, and it is in theory what zoning is supposed to protect.

The central question of SB 50 is whether charm and character are the reason so many people cannot come up with a down payment, struggle to make rent, or are sleeping in the streets.

California has always been an expensive place to live, but starting in the 1970s it began to get pricier faster than the rest of the country. According to a report from the state legislative analyst’s office, between 1950 and 1970, home values in California rose at the same rate as those of the rest of the nation. Then they began to diverge. What had been a boulevard’s width of 30 percent between California and the rest of the country in 1970 grew, by 2015, to a yawning chasm of 250 percent.

This time period coincides with a considerable slowdown in the rate of home building, especially along the coast. Between 1940 and 1970, the number of housing units in California’s coastal metropolitan areas grew by 200 percent, which is roughly equivalent to the state’s overall population growth rate during that period. But between 1980 and 2010, coastal housing increased by just 32 percent, about half as fast as California’s population; in Los Angeles and San Francisco, the number of units grew by only 20 percent.

It’s clear that less housing is being built near the coast. But the intense disagreement over how much more there should be is a reminder that the planning process involves not just political calculation, but moral judgments. Underneath a wrinkled zoning map, with its crowded grids and delicate gradients of shading, lies the beating heart of a commonwealth.

“Not merely does planning, then, require a visualization of resources and activities and processes, by means of the regional survey,” Lewis Mumford wrote in “The Culture of Cities.” “It demands a critical formulation — and revision — of current values.”

Return to Normalcy

Despite the lofty praise elected officials have heaped on the zoning power in recent months, scholars tend to take a rather dim view of its origins.

“In suburbs everywhere, North and South, zoning was used by the people who already lived in the arbitrary boundaries of a community as a method of keeping everyone else out. ‘Apartments,’ ‘factories’ and ‘blight,’ euphemisms for blacks and people of limited means, were rigidly excluded,” wrote Kenneth Jackson in “Crabgrass Frontier,” his canonical history of American suburbia.

Although people have been living in cities for thousands of years, zoning is relatively new. Health-and-safety-related land use rules began popping up in the mid-19th century. But it was not until 1916 that New York City created what is considered the country’s first comprehensive zoning scheme, in which every parcel of property within a city’s limits is classified for a particular use.

Zoning emerged as the country was undergoing dramatic transformations: The census of 1920 was the first to record an urban population greater than the rural one; many of those who were filling cities were recent immigrants; others were African-Americans fleeing the former Confederacy in what historians now call the first Great Migration. But for all their roaring, the ‘20s were also defined by efforts to meet this change with order and control. It was a “return to normalcy,” as Warren G. Harding’s victorious 1920 presidential campaign promised. If the decade has a quintessential literary character, it is George F. Babbitt, the Sinclair Lewis creation whose last name has become a synonym for a suburban philistine. “Babbit,” published in 1922, is the story of a man who rails against density, diversity, and dreamers. He periodically corrects his children that he is not a real estate agent but a Realtor, a word coined the same year New York’s zoning ordinance was enacted.

In 1921, the federal Advisory Commission on Zoning, chaired by future president Herbert Hoover, began helping cities throughout the country draft zoning ordinances. By 1936, 85 percent of U.S. cities had zoning schemes on the books. The manual produced by Hoover’s zoning commission did not advocate for race-based zoning, but, as Richard Rothstein notes in his 2017 book “The Color of Law,” some of the commission’s members did. Among them was Alfred Bettman, who would go on to write the key legal brief in the 1926 case of Village of Euclid v. Ambler Realty.

Euclid, a Cleveland suburb, had what was then known as “Millionaire’s Row,” on Euclid Avenue. Its zoning ordinance, passed as gas stations and some multi-family housing began appearing nearby, blocked industrial uses and apartment buildings from a slice of property near the avenue. The parcel’s owner sued to block enforcement of the law, saying it unconstitutionally limited the land’s value. At trial, a federal judge agreed. Several years earlier, the Supreme Court had held in Buchanan v. Warley that explicitly race-based zoning was unconstitutional. (As law professor Richard Chused notes, they did so because it violated a white property owner’s “liberty of contract,” not because of equal protection concerns.) For U.S. District Court Judge David Westenhaver, if something as needed as racial segregation was not permitted, then surely bans on apartment buildings were not. “The blighting of property values and the congesting of the population, whenever the colored or certain foreign races invade a residential section, are so well known as to be within the judicial cognizance,” Westenhaver wrote.

On appeal, a majority of the U.S. Supreme Court disagreed, and let the zoning scheme stand. For the high court, however, Westernhaver’s problem was not racism; it was that he did not appreciate how awful dense housing could be. In an opinion that remains the foundation of U.S. zoning law, Justice George Sutherland wrote that, in single-family neighborhoods, “very often the apartment house is a mere parasite.”

The South Bay did not escape this period with a clean reputation. Around the time Euclid was winding its way through the courts, Mrs. Willie Bruce was trying to create a place in Manhattan Beach where black people could take in the sand and sun. Eventually, half a dozen black families bought beachfront property near 26th Street. This met resistance from racist residents, including vandalism and arson. And as local historian Jan Dennis has documented, the Bruce family was also targeted by the city itself.

“When these efforts failed to drive blacks from Manhattan Beach, the city proposed to condemn the black neighborhood through eminent domain and convert it into a park,” Dennis wrote in “A Walk Beside the Sea,” her history of Manhattan. The effort led to lengthy litigation. Some black families eventually sold their land and were able to move elsewhere in Manhattan; others, including the Bruces, simply left.

It would be hard to find naked racism on the dais of a planning commission meeting in the South Bay these days. But the shameful history of planning policies rooted in animus is a defining part of the debate over SB 50. Many of the bill’s supporters claim opposition to the bill is thinly disguised bigotry. Earlier this month, one housing commentator responded to anti-SB 50 comments from Brand by tweeting, “‘Local control’ is the new ‘states’ rights.’”

Some place else

The former Alamo Apartments. The recently shelved SB 50 would have made it easier to build multi-family housing throughout the state. Photo by Mary Stevens from @oldhermosa

Of course, the absence of zoning has historically not been not very desirable either. Hermosa resident Jim Rosenberger discovered this while serving on the city’s Planning Commission and City Council in the ‘70s and ‘80s, the time period the state legislative analyst identifies as the beginning of the decline in coastal California’s pace of homebuilding. Elected officials in Hermosa at that time confronted a cityscape shaped by a more permissive era of local government: small and oddly shaped lots, bootleg apartments, and haphazard, even potentially dangerous, home design. For Rosenberger and his fellow officials, zoning changes were a matter of quality of life.

“We said to ourselves at the time, ‘You know, parking’s a bitch here. We need to put more parking on site.’ And so we went from one-and-a-half spaces required to two. We took more cars off the streets,” Rosenberger said in an interview.

During those years, the council enacted a number of land use changes that fundamentally transformed the city. Along with boosting residential parking requirements, officials increased the minimum lot size and raised the number of square feet needed to build a duplex. At the time, Rosenberger said, the council’s hope was to prevent beach-side gridlock and create a few more parking spaces, not make a home in Hermosa inaccessible to all but the One Percent.

“What that’s done is it’s jacked up the prices here. That wasn’t the intent: It was to make it more liveable. But that was the end result,” he said.

It also coincided with a steep decline in the South Bay’s population growth. According to census data, Hermosa Beach, Manhattan Beach and Redondo all grew rapidly until the 1970s, at which point growth began to slow or even reverse. It is only within the last five years that Manhattan’s population exceeded the figure recorded in 1970. At a recent conference on South Bay housing, Torrance Mayor Pat Furey pointed out that, in 1966, Torrance had 133,000 people. Fifty-three years later, the population of Torrance is about 147,000, an increase of a little more than 10 percent during a period in which the state’s population more than doubled.

“That’s not growth,” he said. “Those aren’t our children, and those aren’t our grandchildren. They must have gone some place else.”

George Schmeltzer, who served on Hermosa’s council with Rosenberger, has estimated that, before the changes were enacted, Hermosa’s zoning scheme meant that the town had a zoning capacity of about 30,000 people; today, it has just below 20,000 people, with no substantial change promised by the General Plan the city adopted in 2017. What occurred in Hermosa has echoed up and down the coast. According to Kenneth Stahl, a law professor at Chapman University, in 1960 the City of Los Angeles had about 2.5 million people, but a zoning capacity of 10 million. Today, it has a population of about 4 million, and a zoning capacity of about 4 million.

One of the key arguments for SB 50 is that zoning capacity has declined in cities across the state because of restrictions on the number of places in which apartments can be readily built. According to the results of a recent survey of municipal housing policies across California, on average less than one-quarter of cities’ land is zoned for multi-family housing. The survey, conducted by the Terner Center for Housing Innovation at UC Berkeley, found that this held true even in major cities like Los Angeles.

Asked to name a potentially troublesome project that the zoning rules of his cohort helped prevent, Rosenberger said with a laugh, “Those all got built earlier.” He pointed to the former Alamo Apartments at the southwest corner of Monterey Boulevard and Second Street. The lot that once held eight units of multi-family housing today contains three nearly completed condos. Each has white siding, large windows, and a flat roof despite the presence of an elevator shaft. The roofs extend over the homes’ third-floor balconies, but cut out rectangular segments let the sky in, like a microscope lens hovering over a slide. The amount of parking provided per unit has more than doubled.

“Is it too corny to say ‘Remember the Alamo?’” Planning Commissioner Pete Hoffman joked shortly before the body unanimously approved the project in March 2017.

Many of the South Bay’s multi-family housing units were built before the zoning changes of the ‘70s and ‘80s, and endure as “nonconforming units,” which are allowed to remain and undergo some improvements. But they become scarcer every year, as their owners pass away or sell in an enticing market. Developers wishing to erect newer, more desirable homes have to comply with new rules.

The result is that change to a city’s housing stock takes place incrementally, in quiet, poorly attended meetings. Consider, for example, a Hermosa Planning Commission hearing in October 2017. A developer sought to take a lot in the 1600 block of Loma Drive that had once contained a triplex, demolish it, and replace it with two condos. Commissioners unanimously approved the decision, noting that the existing structure, which was some 70 years old, lacked on-site parking. Though the units going in would be larger than what they replaced, there would be fewer total homes, and each would have parking included.

City officials don’t design projects. And they have limited discretion to reject one. But the priorities the law embodies nonetheless shine through.

“Everyone complains that we’re getting more and more density when in fact we’re actually reducing density,” Hoffman said. “It’s a much bigger building, but the density is actually decreasing.”

Overlaid

State law requires cities to plan for enough housing to meet population growth, including certain amounts of affordable housing. Regional bodies determine a particular number of units each city must plan for; this is known as the Regional Housing Need Allocation (RHNA) process. The cities’ plans are passed on to the state Department of Housing and Community Development (HCD).

Critics note that this process doesn’t mean any affordable housing will be built. Between 2013 and 2018, Manhattan Beach permitted 323 new housing units. That included zero moderate income units, zero low income units, and zero very-low income units. Other places in the South Bay have not done much better. Redondo entitled 213 units between 2013 and 2017, of which two were low-income. In 2018, Hermosa entitled 15 housing units. Five are classified as moderate income, and all of them are accessory dwelling units (ADUs), commonly known as “granny flats.” These were okayed under laws the city passed in 2018 that streamlined the approval process for ADUs, which Hermosa was obligated to implement under state laws that, like SB 50, took permitting power away from local governments.

The theory behind SB 50’s goal of greater density is basic supply and demand: if there are more homes available, then the price asked for each one will go down. But there is little that is basic about the housing market. And while many of the critiques of SB 50 have a conservative tinge, the plan has also had to fend off attacks from the left, about whether it would produce more affordable housing, or just additional, expensive housing in wealthy communities..

Wiener tried something similar to SB 50 last year, known as SB 827. The bill failed to advance as far as SB 50, however, because of concerns it would spark gentrification. In an effort to boost support this time around, the bill created criteria to identify “sensitive communities” where residents might be at risk of displacement through the growth of market rate housing. Several progressive housing economists weighed in to support SB 50, and went so far as to accuse opponents of distorting their research; many social justice groups and some tenants organizations remained unconvinced.

These battles, however, tended to be about urban neighborhoods that have recently begun to draw prospective renters and homebuyers pushed out of more expensive ones — the 30-something Angeleno who starts looking in Boyle Heights or West Adams because she can’t afford Silver Lake. SB 50’s protections against gentrification would not guarantee that areas like the South Bay, which are already highly unaffordable, would become any less so in the future.

For years, Hermosa underwent what economists might call a natural experiment that illustrates how challenging it can be to build affordable housing in the South Bay. In September 2010, Hermosa was in the midst of a dispute with HCD. The city had been told to plan for 562 new homes, far more than it had anticipated. The state rejected the city’s draft housing plan in 2008, and also two proposed revisions. The primary issue with Hermosa’s plan, the state said, was a lack of realistic opportunities for affordable housing.

And so city staff came up with a solution: an affordable housing overlay. The plan made a number of large parcels along Pacific Coast Highway and Aviation Boulevard open to affordable housing projects under highly favorable conditions of approval. Lower-income developments of a certain size would be available by right, while other kinds of projects, such as new commercial development, would have to go through the Planning Commission. Commissioners were skeptical about whether an overlay would create any affordable housing, but they approved the plan, and the overlay helped Hermosa get its housing plan approved.

The commissioners, it turned out, were right. The overlay was on the books for six years, but nothing got built.

“I think the realistic assessment that we can all see is that the opportunity was there, and no one took advantage of it. The reality is, land is very expensive, and it doesn’t really make economic sense for developers to build affordable housing,” Community Development Director Ken Robertson told the City Council in 2016, when it voted to scrap the overlay.

The high cost of land that Robertson identified, though, may mean that mid-rise apartment buildings, which would potentially be allowed under SB 50 but which run afoul of current height limitations in the Beach Cities, could be more successful in creating affordable units.

Earlier this year, Redondo approved the revised Galleria project, which will create 300 units of housing, 60 of which will be classified as low income. Brand points out he fought for the affordable units, and he touts this as a reason that SB 50 is unnecessary. But it is also evidence that large, dense projects are the most cost effective way of providing affordable housing.

Hermosa was able to jettison the overlay thanks to a modification in RHNA methodology. The change significantly decreased Hermosa’s allocation for its 2013-2021 housing plan: instead of planning for 562 homes, Hermosa had to plan for just two. But regardless of what happens to SB 50, the coming RHNA allocation may not be so forgiving.

Senate Bill 828 makes changes to the RHNA process, and was signed into law last year. A senate committee report on the bill singles out the Beach Cities. While Hermosa was assigned two units and Manhattan 37 for the 2013-2021 period, the report notes, Redondo was allocated 1,397, even though it has only twice as many people as Manhattan. Lamenting a “heavily politicized” affordable housing process “divorced from the data about true housing demand and fair share principles,” the bill promises to correct future “inequities.”

Finally, a housing bill Brand can get behind.

Look for Part II next week.

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