California Housing Crunch Prompts Push to Allow Building

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Marco Gonzalez spent more than a decade suing real-estate developers in California over housing proposals that would have spoiled wetlands and gutted hillsides. The environmental lawyer won cases that stopped scores of units from being built.

Now he is on the opposite side, fighting cities and neighborhood groups in Southern California that fail to provide enough new housing units.

Mr. Gonzalez is among a growing group of advocates across California who are taking a once unthinkable approach to development in their backyards: They are trying to force cities to allow more of it.

The backlash comes as California’s lack of housing supply is becoming a crisis. After a postwar building boom gave birth to a labyrinth of freeways and sprawling suburbs, coastal metro areas in California between 1980 and 2010 added new housing units at about half the rate of the typical U.S. metro area.

During that period, California built an estimated 90,000 fewer units per year than were necessary to keep home price growth in line with the rest of the country, according to the state legislative analyst’s office. California—the nation’s most populous state—ranks 49th in the number of housing units per capita, ahead of only Utah, and it has the second-highest rate of overcrowding in the nation, trailing only Hawaii.

The supply shortage has driven up prices. In 1970 California home prices were about 30% higher than the U.S. median; today, California is more than 2.5 times pricier. In all, seven of the nation’s 10 most unaffordable markets, based on the amount of income spent on a mortgage, are in the Golden State.

But California’s complex land-use and regulatory structure gives opponents of development extraordinary powers to stymie new projects.

Environmental reviews intended to preserve California’s picturesque coastline and hillsides also provide a means for residents to challenge ordinary development proposals. If a review finds adverse impacts on parking, traffic, noise or air quality, elected officials can’t approve it until they have addressed opponents’ concerns.

Even after a project is approved, opponents can file environmental challenges, a process that can delay projects by two to four years.

A study by the law firm Holland & Knight found that more than 14,000 new housing units were the target of such lawsuits between 2013 and 2015 in Southern California. More than 98% of those were in dense urban areas and 70% were within a half mile of a major transit corridor—precisely where new housing units ought to crop up, urban planners say.

Michael Weinstein, president of a nonprofit in Los Angeles called the AIDS Healthcare Foundation, said the city’s current approach leads to high-rise zoning on a case-by-case basis that benefits luxury developers.

He is spearheading a Los Angeles ballot initiative in March to halt dense high-rise construction needing exemptions to city zoning for two years. Supporters have taken out ads on large billboards across town that read “Stop Manhattanwood,” a reference to high-rise construction in the Hollywood area.

“Are we basically going to say that we don’t need planning, and it doesn’t matter if a high-rise goes next to a single-family home?” Mr. Weinstein asked.

But pro-housing activists are fighting back against antidevelopment campaigns, filing lawsuits, attending public hearings and organizing in support of much more building.

Mark Vallianatos is an environmentalist, former urban planning professor and founder of Abundant Housing LA, a group that is part of the emerging YIMBY (“Yes, in my backyard”) movement. He said in housing debates there are often advocates for affordable housing, along with developers pushing their own projects, “but no one’s out there pushing for more housing of all types.”

“It shouldn’t be such an onerous task to build housing when we have a housing crisis,” he said.

Mr. Gonzalez, the lawyer, has fought developers building sprawling projects in San Diego’s backcountry, while also representing builders and affordable housing groups he feels are pursuing smart projects. His conversion from environmental warrior to affordable-housing advocate came when he realized his actions were thwarting projects in areas where new supply is desperately needed to ease rising costs for owners and renters.

“I just saw it as untenable,” said Mr. Gonzalez. “This was a group of people who essentially believed their job is to stop the evolution of our community.”

Paul Habibi, an apartment developer who is also a professor at UCLA’s Anderson School of Management, said he understands the concerns about favoritism for luxury developers seeking one-off approvals to Los Angeles’ outdated zoning code. But he said the shortage of housing is so severe that “you just can’t build enough units at any price point.”

“The reality is that growth needs to come from all directions, whether it’s high-end housing, midtier or the subsidized affordable units,” he said.

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