The belief that California has a profound housing crisis took hold in the state’s media and political establishments in recent years after Census Bureau statistics showed the Golden State had the highest effective rate of poverty once cost of living was included.

The view was amplified by stories about four-hour commutes forced by housing costs and about shocking numbers of poor college students who struggled to pay for food.

That’s why the decision last week by state Senate Appropriations Chairman Anthony Portantino, D-La Cañada Flintridge, to kill Senate Bill 50 – the latest attempt to spur housing construction by limiting local control of approvals
– came as a surprise to many. That included the bill’s sponsor, Sen. Scott Wiener, D-San Francisco. His push to ease rules to allow four-to-five-story apartment buildings near public transit centers and to allow construction of such units in many zones previously reserved for single-family homes had won support from not just developers but construction labor unions, several large-city Democratic mayors and some activist groups. Many were skeptics of Wiener’s and Gov. Jerry Brown’s previous attempts to limit local control.

Stories about Portantino’s decision focused on the fact that leaders of cities in his district, starting with Pasadena, had been vociferous opponents of Senate Bill 50. Reports also focused on the formidable influence of environmental groups, which prefer strict zoning rules to give them more clout to block development.

These arguments are common. In August 2016, when Brown’s attempt to sharply streamline the approval process for housing projects died in the Legislature, Shamus Roller, executive director of Housing California, blasted “the political gamesmanship of powerful interests.”

Californians ‘must be convinced of benefits’ of adding housing

But another view is that then-state Legislative Analyst Mac Taylor knew what he was talking about in March 2017 when he issued a report on the failure of local governments to meet housing mandates that said major change was unlikely “unless Californians are convinced of the benefits of more home building.” Instead of seeing the failure of housing reforms as a result of special-interest machinations, Taylor argued that elected leaders who backed such measures hadn’t cultivated the public support necessary to enact major changes.

Taylor’s thesis was supported by a USC Dornsife/Los Angeles Times poll of Californians released in October that found little belief that the housing crisis was due to a lack of building. It was the sixth-most cited reason, falling far behind the top two: the lack of rent control in much of the state and inadequate “affordable housing” programs. Two-thirds of those surveyed supported local control of housing approvals even if cities or counties weren’t meeting state mandates for new housing construction.

Still, Wiener said he wasn’t daunted by Portantino’s decision. He said he would bring another housing reform measure to the state Senate in 2020. The former San Francisco supervisor, a Harvard law graduate, also said he thought Senate Bill 50 had a chance of being resurrected this summer, even though appropriation chairs of the Senate and Assembly have a long history of making their decisions stick.

“We’re either serious about solving this crisis, or we aren’t,” he told reporters in Sacramento last week. “At some point, we will need to make the hard political choices necessary for California to have a bright housing future.”

The California Legislature’s adoption of Senate Bill 100 – committing the state to have an electricity grid powered by 100 percent renewable energy in 2045 – was billed by Sen. Kevin De León, D-Los Angeles, (pictured) as another landmark triumph for the environmental movement in the Golden State.

But the measure’s relatively narrow adoption in the Assembly – on a 44-33 vote – carries loud hints from Democrats who represent poor communities that they see environmental policies that add to the cost of living as increasingly problematic in the state with the nation’s highest level of poverty.

A Los Angeles Times interview with Assemblyman Adam Gray, D-Merced, hammered home this point:

“This is yet another in a laundry list of bills that are discriminatory to the people I represent,” Gray said. He was paraphrased as “saying that supporters were motivated to impress national progressives rather than poor residents in rural communities who would face higher electric bills as a result of the legislation.”

The Assembly Democrats who opposed SB100 besides Gray: Anna Caballero of Salinas, Jim Cooper of Elk Grove, Tom Daly of Anaheim, Jim Frazier of Oakley, Mike Gipson of south Los Angeles, Sharon Quirk-Silva of Fullerton, Blanca Rubio of the San Gabriel Valley and Rudy Salas of Bakersfield.

The issue of how poor people would be affected was very much part of the debate in the run-up to the 2006 adoption by the Legislature of the landmark anti-global warming Assembly Bill 32, which mandated the use of costlier but cleaner energy sources. As a result, a portion of cap-and-trade fees on pollution permits are designated to go to “disadvantaged” communities.

A 2017 report by the California Climate Investments state website said that $614 million in cap-and-trade fees had been spent on these communities, including helping nearly 30,000 homeowners with solar panels and other energy-efficient projects, as well as funding more than 2,600 affordable-housing units.

Energy costs contribute to state’s high poverty rate

But most of the 20 percent-plus of state residents who are impoverished get relatively little direct help in dealing with overall energy costs that aren’t just higher on average than any other state with a relatively temperate climate; they’re also higher than states with harsh winters like Montana and Colorado. And because of unique state rules and fees, gasoline costs more in California than any state but Hawaii.

California’s emergence as the nation’s most impoverished state only became evident in 2011, when the U.S. Census Bureau began issuing state-by-state poverty statistics that included the cost of living. This has helped create an appreciation in the Legislature of the need to add housing stock to try to slow the sharp increase in rent and home prices over the past quarter-century.

But a recent study by Chapman University’s Center for Demographics and Policy found that state energy policies were also a major contributor to high poverty rates.

The study faulted state agencies, starting with the California Air Resources Board, for their impact studies which have consistently minimized the effects of laws like AB32 on the less affluent.

“Notably absent [in the air board’s ‘scoping plan’ for AB32] is any discussion of how the state’s existing costs, let alone additional burdens, severely harm lower-income and historically disadvantaged communities and households,” the study noted.

Gov. Jerry Brown has so far declined direct comment on SB100, but most Capitol watchers expect him to sign the bill. The governor has called climate change the state’s and nation’s most pressing problem.

When Gov. Jerry Brown’s aggressive proposal to jump-start housing construction by sharply streamlining the approvals process for urban housing projects that met certain conditions

Coverage of the “by-right” proposal had emphasized that both unions and environmentalists didn’t want the California Environmental Quality Act to be weakened – even if the Golden State had the nation’s highest effective poverty rate because of sky-high home prices and among the nation’s highest rents. That’s because CEQA lawsuits enable the groups to win concessions from developers and government agencies or to block projects they don’t like. In an op-ed in the Sacramento Bee, Shamus Roller, executive director of Housing California, lamented the proposal’s failure and complained about “the political gamesmanship of powerful interests.”

But now there’s push-back against this tidy assumption about what’s driving the housing crisis, and from an unlikely source: Legislative Analyst Mac Taylor. In “Do Communities Adequately Plan for Local Housing?” – a report prepared by LAO staff but carrying Taylor’s byline – the first central conclusion is that the process under which the state Department of Housing and Community Development works with cities and counties on their general plans to ensure adequate housing isn’t working. It cites little follow-through from many local governments on past promises and notes that many development plans are badly outdated and unusable. It offers suggestions on how the process might be improved to speed construction of housing stock.

Local officials do bidding of local housing opponents

But then Taylor offered his theory about why state housing policies have failed to address the housing crisis: because foot-dragging local officials are doing the bidding of their constituents.

When it comes to rule changes to speed up construction, “many local communities have fervently opposed, obstructed, or even disregarded such changes in the past. … Any major changes in how communities plan for housing will require their active participation and a shift in how local residents view new housing,” Taylor wrote. “There is little indication, however, that such a shift is forthcoming. Convincing Californians that a large increase in home building – one that often would change the character of communities – could substantially better the lives of future residents and future generations necessitates difficult conversations led by elected officials and other community leaders interested in those goals. Unless Californians are convinced of the benefits of more home building – targeted at meeting housing demand at every income level – the ability of the state to alter local planning decisions is limited.”

The governor is trying again, however, to change the status quo. In January, his office unveiled a legislative package meant to streamline the approvals of building permits and to give incentives to local governments to reduce permit costs.

Democratic lawmakers, meanwhile, continue to focus on affordable housing projects to ease the crisis. State Sen. Toni Atkins, D-San Diego, has proposed Senate Bill 2 which would add fees of $75 to $225 to property transfers, with the exception of home sales, with some of the proceeds going to pay for housing for poor families and migrant workers.

So far, this has led many state politicians to call for doubling down on conventional means of providing affordable housing: using government subsidies to build homes for a relative handful of residents. New York Mayor Bill de Blasio, however, believes the biggest impediment to affordable housing is the lack of new housing stock. He backs a plan to repeal regulations and allow 160,000 new dwellings to be built in his city.

Now there’s another prominent East Coast liberal weighing in with a similar view: Vox’s Matthew Yglesias, among the most influential policy wonks in liberal circles. Yglesias’ comments come in a discussion of Thomas Piketty’s ballyhooed book “Capital in the 21st Century” and the criticisms of it by MIT graduate student Matt Rognlie, which centered on Piketty not grasping the relevance of extreme housing costs to income inequality. Yglesias’ key point:

Yet if labor’s falling share of national income is entirely accounted for by the increased returns to housing capital, then it seems we should be looking at housing-specific trends to explain the problem. Rather than robots [taking away jobs], the problem is almost certainly snob zoning rules that prevent the construction of new affordable housing in expensive areas.

Rognlie cites work by economists Ed Glaeser, Joseph Ryorko, and Raven Saks to argue that exclusionary zoning practices have contributed greatly to lack of housing affordability and that this should be more central to the wealth inequality debate. Lawrence Summers, likewise, argued in a review of Capital that “an easing of land-use restrictions that cause the real estate of the rich in major metropolitan areas to keep rising in value” should be an important element of the policy agenda to address Piketty’s concerns.

East Coast vs. West Coast policy gap on housing as well as schools?

It is nothing new for Yglesias to make the point that more housing stock is badly needed. He’s been doing it for years, most notably in his book, “The Rent is Too Damn High.” But what’s interesting is how in this case he explicitly links income inequality to the modern regulatory state.

By contrast, many California Democrats argue that the impact and cost of regulations is exaggerated, starting with leading environmentalists.

When it comes to housing policy, we could see stark regional differences that amount to a replay of the education reform debate. East Coast liberals have been far more receptive to school reforms like teacher competency testing and use of metrics in measuring student and teacher performance than West Coast liberals. Massachusetts arguably has the best-run public education system in the nation, and its landmark education reform measure was adopted in 1993.

There’s also a long history of East Coasters understanding that union interests are not aligned with student interests. In Woody Allen’s 1973 movie “Sleeper,” about a New Yorker in suspended animation who wakes up 200 years in the future, the lead character learns that America was destroyed when “a madman named Albert Shanker got hold of a nuclear weapon.”

The joke was aimed at New Yorkers, many of whom loathed a teachers union leader named Albert Shanker who led a 55-day citywide teachers’ strike in 1968. This New York Times obit of Shanker reflects on the strike’s rancor and mentions the “Sleeper” reference.

The prime cause of the strike was Shanker’s objection to a pilot program in which local communities were allowed to take over three struggling schools in minority neighborhoods. Nearly a half-century later, similar issues are at play in the Vergara case involving Los Angeles schools. The lawsuit centers on the plaintiffs’ claim that union-backed state laws protect teachers and hurt struggling minority students.

Brown’s response — he really said this — “People come here from all over in the world, close by from Mexico and Central America and farther out from Asia and the Middle East. So, California beckons, and people come. And then, of course, a lot of people who arrive are not that skilled, and they take lower paying jobs. And that reflects itself in the economic distribution…. So, yeah, it’s there, but it’s really the flip side of California’s incredible attractiveness and prosperity.”

So we’re poor because we’re rich.

But the poor also are attracted to Texas — bad weather and all — which has a poverty rate of 16.4 percent. That’s because it has two things California doesn’t: cheap housing and plentiful jobs. So in the Lone Star State the poor have a chance, if they work hard, to lift themselves up.

Reasons

Here’s why, despite the gleaming billionaire future promised by Silicon Valley, poverty is so high in California:

1. High housing costs. This stems from extreme restrictions on new construction by the California Coastal Commission and innumerable regulations of every kind. The median price of a home now is more than $1 million in Silicon Valley and San Francisco; and more than $650,000 in Orange County.

2. High taxes. The top rate now is 13.5 percent, but that starts at $250,000. The hefty 9.3 percent rate starts at about $55,000 of income. So once you hit the middle class — and $55,000 is the lower middle-class here — you get hit hard.

3. Preposterous regulations, such as AB 32, the Global Warming Solutions Act of 2006. The regulations hamstring manufacturing, whose jobs used to be the main way the poor lifted themselves up into the middle class.

4. Schools near the bottom on national testing. California schools recently were dumbed down by the adoption of the federal Common Core curriculum. The ultra-powerful teachers’ unions buck any reforms, denying way too many kids the skills necessary to compete in a high-tech economy.

I don’t see any of those things changing. If you’re poor, you get a lot of benefits. If you’re rich, you can enjoy California as the perfect playground. If you’re middle-class, you have trouble paying the housing and tax bills, and every day are at risk of dropping into poverty — as you check the price of renting a U-Haul.