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By Tim Hunt

How much housing subsidies cost other renters

Uploaded: Jun 3, 2021

Pleasanton attorney Peter MacDonald knows his way around planning and land-use issues.
He’s been in private practice for 33 years here after serving as city attorney for six years while the city processed Hacienda Business Park and three other business/retail parks (Bernal Corporate Plaza, Signature Center and the Pleasanton Square (Home Depot) with the surrounding commercial buildings and retail outlets). Incidentally, the city averaged about 1,000 units of new housing each year during that time.
He’s railed at inclusionary zoning and its impact on housing costs to say nothing about limiting supply. MacDonald addressed these issues in a strongly worded letter to the City Council dated May 17. He pointed out that it would take one billion dollars in subsidy to meet the goals in the city’s new Regional Housing Needs Allocation of 5,965 units.
He wrote, “Under the California RHNA system, the California housing market now operates with Soviet efficiency; big on goals and objectives, overrun with bureaucratic processes, bristling with sanctions, and disastrous performance in producing real housing affordability. With housing supply caught in a pincer between local exclusionary zoning and the insurmountable millstone of inclusionary zoning costs, California housing supply has slowed to a crawl despite double digit housing price increases year after year.”
MacDonald pointed out that the average one-bedroom apartment rents for $960 nationally. The average in Pleasanton is nearly 3 times that much at $2,535. That number has not dipped much even with the addition of about 1,000 new apartments in the last couple of years. You see lots of for rent signs around town because there’s competition and availability.
He provided the council with a detailed chart showing how much rent subsidy was required for each category of housing (very low-income, low-income, moderate, above moderate). He calculated the annual subsidy required of more than $51 million. To cover the subsidy, market rate renters pay more than $13 additional for every dollar of subsidy.
MacDonald suggested a solution in an earlier letter to Gov. Gavin Newsom. He recommended using the size of the unit instead of the rent as the basis. That introduces the concept of building in affordability in design by constructing smaller units. Given the size of homes built before McMansions came into style, we are living in much larger spaces than most of our parents did.
The state needs to drastically reform the California Environmental Quality Act that has become a tool for unions and greens to obstruct or slow housing development. For politically influential people—think the owners of the Golden State Warriors and the Los Angeles Rams, the Legislature passed bills that limited the challenges and the time available to challenge. Extending that across the board and reforming other burdensome aspects would be a welcome next step.