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IE Economic ForecastNovember 6th, 2019Paavo MonkkonenUCLA Luskin School of Public Affairs
Built Out Cities?Zoning and California’s Housing Shortage
• Start with Start w Santa Monica? • List of onerous requirements from paper
Per the General Plan of Rancho Santa Margarita, the city has“virtually no vacant land left”
Zoned Capacity
s +80 units +90 units +100 units
+150 units+100 units
How many units of housing could be added in a city if all parcels were built to maximum density
From Nov. 7, 2019 Regional Council Meeting Agenda: http://scag.iqm2.com/Citizens/FileOpen.aspx?Type=1&ID=2066&Inline=True
SCAG’s Proposed Housing Need Allocation
There is much less zoned capacity in cities with high demand (i.e. high rents) than in cities with low demand.
Nonetheless, there is much less new housing built in cities with low demand.
Our Research Findings
54 Jurisdictions in Riverside / San Bernardinogrouped by median rents in 2013
Less than $1000 $1000 - $1200 $1200 - $1350 More than $1350
Palm Springs Loma Linda Lake Elsinore Eastvale
Banning Jurupa Valley Moreno Valley Chino Hills
San Bernardino Cathedral City Perris Norco Yucca Valley Rialto Grand Terrace Canyon Lake
Calimesa San Bernardino Uninc. Upland Temecula Big Bear Lake San Jacinto Rancho Mirage Rancho Cucamonga
Twentynine Palms Hesperia Riverside Murrieta
Desert Hot Springs Colton Beaumont Chino Coachella Indio Montclair Wildomar
Indian Wells Adelanto Riverside Uninc. Corona
Blythe Yucaipa Fontana Menifee
Barstow Hemet Redlands La Quinta
Needles Highland Palm Desert Ontario Apple Valley Victorville
54 Jurisdictions in Riverside / San BernardinoRHNA, Permits 2013-2017, and Zoning
0
50
100
150
200
250
300
350
400
Less than $1000 $1000 - $1200 $1200 - $1350 More than $1350
5th Cycle RHNA per capita Permits 2013-2017 per capita Zoned Capacity per capita
Imagine if we had zoned capacity in high rent places…
00.05
0.10.15
0.20.25
0.30.35
0.40.45
0.5
Less than$1,213
$1,213 to$1,342
$1,342 to$1,610
$1610 and up City of LA
Shar
e of
Sou
tehr
nC
alifo
rnia
Median Rents in 2017
Population Zoned CapacityAll Permits 2013-2017 Multifamily Permits 2013-2017
Permits 2013-2017 = f (Rent 2013, *Regulation*, Controls)
At present controls are: city size, job accessibility, population density, education levels, changes in rent 2009-2013, and incomes.
Plus, the interaction between zoned capacity and rents.
Determinants of housing production
Zoning matters more in high demand cities
Pictures of Portland plexes
13
What is to be done?
Early Regression ResultsProcess Index Prohibition Zoned Capacity
Variable Permits Multifamily Permits Permits Multifamily
Permits Permits Multifamily Permits
Population (log) 1.10*** 1.44*** 1.23*** 1.45*** 0.82*** 0.89***[0.08] [0.12] [0.08] [0.13] [0.08] [0.12]
Rent (log) 0.79* -0.06 0.92** 0.71 1.31*** 0.53[0.42] [0.80] [0.40] [0.65] [0.27] [0.46]
Density (log) -0.14 -0.02 -0.66*** -0.62** 0.01 0.24***[0.10] [0.13] [0.17] [0.27] [0.04] [0.08]
Jobs (log) 0.01 0.36* 0.13 0.59*** -0.01 0.32***[0.13] [0.20] [0.12] [0.19] [0.07] [0.12]
Process Index 0.03 0.24*[0.08] [0.13]
Prohibition Index -0.27** -0.73***[0.13] [0.20]
Zoned Capacity 0.36*** 0.38***[0.07] [0.10]
Observations 195 195 227 227 444 444R-squared 0.59 ~0.14 0.62 ~0.15 0.65 ~0.12
Notes: Robust standard errors in brackets. Models include metro fixed effects. *, **, *** indicate significance at the 0.01, 0.05, 0.10 levels.
Prohibition and Zoned Capacity
