California Insider: Interview With Peggy Huang on the Housing Crisis

October 11, 2019 Updated: October 13, 2019

Siyamak Khorrami: Welcome to California Insider.

Peggy Huang: Thank you for having me. I’m excited to be here.

Siyamak: It’s great to have you on the show. You’re involved in a variety of different organizations in in the county. And I want to talk to you about your experience with housing. You are actually in this on the city council of Yorba Linda, as well, as you chair, the Southern California Association of Governments. And you’re involved with evaluating the housing needs, regional housing needs. So tell us a little bit more about housing in Southern California and California. Why is the cost of housing so much?

Peggy: Well, that’s a very good question and very complex. We have very different reasons for why housing costs is going up. Obviously, there’s a shortage. But the shortage is not because it just happened yesterday, it took about two decades to get to the point where we are today. California has not been building enough to meet the demands of the population for over 25 years. And as a result, now we have a huge backlog of what we call existing needs. That means that somebody out there needs this unit, but they couldn’t move into one. So they’re living somewhere else, maybe causing what we call an overcrowding condition. So that’s one of the reasons why now we have a supply issue, and when we have a supply issue, then housing costs goes up. Another reason for such high cost of construction is we don’t have a lot of available land, it’s getting harder and harder to find the flat land with very little problems above ground or below ground. A lot of our available building places happen to be hilly or may have some kind of other use, they were used for other purposes, industrial purposes. And so it makes cleanup difficult or more expensive before they can actually put housing on there. And we have a lot of unnecessary state regulations. There’s this drive for green energy, like LED, double pane for environmental purposes, but at the same time, that creates higher costs of construction. So we have a lot of various issues that are the causes for high construction cost.

Siyamak: So you touched a little bit on regulation. And in terms of regulation, from what I’ve seen is the restrictions in California is three times the rest of the nation on the construction code. And how is that? Is there any examples of that? Is that true? Is that affecting the cost?

Peggy: Absolutely. We have regulations, like I touched upon, this drive for green energy and greenhouse reduction. So as a result of of those high-tech items that are used to drive down the greenhouse emission, it increases your cost of construction. So those regulations do have an impact. And another thing is that as we are looking at meeting our housing demands, people are talking about building high rises. Well, after four levels, okay if you’re going into the fifth level of construction, you have to be steel beamed. It can no longer be wood, and whatever you have for steel beams, wherever it goes up, an equal amount of that steel beam must be underground. So now you have the additional cost of making sure that it’s very environmentally sound, it’s on solid bedrock, you don’t want a building to start shifting until like what happened in the Millennium tower in San Francisco where it’s now sliding, you have those issues. California is an earthquake country. So we have those additional stringent earthquake requirements after four floors, a lot higher standards, stricter standards. And then on top of that, as we are building into what we call wildlife urban interface, that increases the chances of wildfire. So now we have to look at additional regulations like enclosed eaves. So this way, we don’t have any sparks that land into those gutters around this roof that would cause them to catch on fire. Every house needs a fire sprinkler. So now we just found different regulations that would increase the cost of construction.

Siyamak: I see. And what about the zoning? So I’ve been hearing about not in my backyard and people is it? Is it that people don’t want to have more development in their areas? Or is it just the fact that as you touched on, there is not enough land.

Peggy: There’s a, you know, it’s a little bit above? You know, if you have existing neighborhoods where it’s one story, and you put in a four story next to it, there is an essence of violation of privacy because you’re looking into their home. So there’s that concern, people said, hey, not in my backyard in terms of, I don’t want it something taller than where I’m living. One of the problems that we’re facing as well is transportation. Right? When you build more homes, higher density homes, you’re going to put more cars on the streets. And people don’t want more cars on their street. If they’re used to driving 30 miles per hour on their street, they don’t want want to have it become 10 miles per hours just because you built in more homes. So you have those issues. The other problem that we are seeing for a lot of our neighbors is just concern over parking. There are been many efforts from Sacramento to limit the city’s ability to restrict construction based on parking requirements. Well, parking is very important to a lot of homeowners, they don’t want strangers to park their cars in front of their homes. They also want to be able to park their cars on the street. When you have housing, high density housing put in, not enough parking spaces, they start intruding into existing neighborhoods and making existing neighborhoods their parking lot. And that does disturb the neighbors quite a bit, because they have an unknown car in front of their house. Why is that car there, a lot of questions will be asked. So yes, zoning is very challenging far a lot of the cities and a lot of the neighbors complaints are valid over privacy concerns, as well as traffic.

Siyamak: Okay. Now let’s move on to the solutions. There’s been some solutions proposed, what are your thoughts on those?

Peggy: You know, some of the solutions I’ve been looking at from Sacramento has not been what I call city-friendly. It’s too much a one size fits all. What works in San Francisco and the Bay Area does not work in Los Angeles, or Orange County. In the Bay Area, it’s very transit oriented. But here in Southern California, we don’t have that transit infrastructure in order to build the type of housing that Sacramento was talking about. The new housing element, affordable housing element that’s going through right now, for the next four years, for Southern California, is to have housing in what we call high quality transit zones. Most Southern California cities do not qualify as a high quality transit zone. Okay, so where are you going to put those affordable housing, that’s a huge problem of why the one size does not fit all. And the importance of the local jurisdiction maintaining control. The other problem with the housing element of high quality transit is that when you want to build affordable housing next to those transit areas, it creates sort of, you know, a gentrification of an area, right? Well, at the same time, the housing element law says you cannot concentrate affordable housing in one place. So now you see the conflict in the law. And Sacramento does not give local jurisdictions the ability to choose what is good for their neighborhood, right? Where do we put a lot of these housings if we have that issue? And another problem that we have that’s different than the Bay Area is the Bay Area has, a lot of their companies are sort of in this one area, and with a lot of homes near it. That’s not true here in Southern California, you see the high tech hub being here in Irvine. But a lot of affordable homes are in Riverside, Corona, or San Bernardino. So now you got the pressure on the freeways to move them to Irvine, for those high tech jobs. So we have these really complex environments here in this region in Southern California that’s not met elsewhere.

Siyamak: Okay, and what do you think the best solution would be to these to these problems? Do you have any proposals and your ideas on how to solve these problems?

Peggy: Well, one of the things I’ve been working on at SCAG through my committee, which is the Community, Economic, and Human Development Committee, is to drive the conversation of having jobs and housing being in the same spot, in encouraging local governments to bring businesses to their cities, at the same time having the adequate housing to support it. And we need to have that conversation. Because our roads no longer can support those living in suburbia and going into a job center, we need to put them closer together. And that’s something that I’ve been working on over at SCAG to really help the local jurisdictions start talking about this issue, and how can we develop or redevelop our cities that could better bring about a job housing concentration, rather than urban sprawl? What we have. So in Southern California, we have 197 cities in six counties that belong to SCAG, and we are having that conversation. And that’s been my platform for my committee for the past two years, and we’ve had good conversations, talking to demographers, talking to various economic organizations to figure out how we can better our cities, so that the jobs and the housing are closer to each other.

Siyamak: Okay. And is that gonna? Is there going to be any any proposals to the state? Is there any, out of these conversations? What’s what’s going to come out of it?

Peggy: One of the good things that we’re doing as a committee is that, and what I really enjoy working with my fellow city council colleague, is this is a nonpartisan committee, where we are not talking about politics, we’re talking about solving a common problem. And we’re coming together with some ideas. So how it will work is that if the committee itself comes up with a policy, that we will make that recommendation to the Regional Council, and the Regional Council, if once it’s approved, it’s a policy that we will distribute to the membership. And it’s up to the 197 cities to adopt it. We’re hoping that through our the fact that we’re having this conversation at the committee level, sharing ideas, which is what really a policy discussion should be all about is sharing the ideas, best practices of each jurisdiction and sharing all that to come up with a final proposal that we can take to the Regional Council.

Siyamak: One thing I want to ask you is about the code. I mean, there is a lot of work that’s happening, but nobody, is there any, are there people seriously looking at all the regulations? And obviously we do we need regulations and housing, we don’t want the builders to develop something that’s going to have the ceiling fall on us. But at the same time, we need to make sure what we’re doing is actually logical. Is there anybody looking into that?

Peggy: No, I don’t think people are looking at the codes comprehensively. When I was going through this process of affordable housing, one of the requirements for affordable housing is that your homes have to be near high quality transit areas. Okay. So we want to promote this urban idea of, you know, work, transportation, and housing being close together, and using transit instead of cars. However, in that same piece of legislation, there is a separate part that said, but no more than a third of those affordable housing can be in a high quality transit, can be in a concentrated area. All right. So on one hand, you want me to put as many homes as possible near a high quality transit. And at the other hand, you’re saying, but you cannot put more than a third of it in one area. This is inconsistent, right, I can’t fulfill it, but and so when I brought it up, the response I got was, well, that’s for you to figure out how to, I think the response was, well, you wanted local control over how to implement the plan. So you go figure it out? Well, that’s not answering the problem. That’s not solving the problem, I just identified a conflict for you, state of California and Sacramento. What is wrong with your housing requirement? And you’re telling me this is good for local control, you can figure it out.

Siyamak: So why do such conflicts exist in the law?

Peggy: My personal opinion is that you have complex issues, and too many hands in the cookie jars, and everybody wants to please each other. Okay, so a legislator has a specific agenda, and brought all his special interest fronts together. And he wants to please them all. And not recognizing that there is conflict. The other problem is, I think a lot of times people don’t spend enough time going back to see if there’s already something written. Or I’ve also said, well, I know it’s written that way. But I’m writing it better or more clear. And oftentimes, it leads to conflict in the law. And no one’s going back to clean it up and really do a comprehensive study of, hey, this is what the problem is, you can’t do both. You know, there’s so many different conflicts in the law, that we can spend hours on terms of regulations. It’s not that regulations is bad. I completely agree with you, you know, the regulations exist for health and safety reasons, and we need to keep them there. But they can’t be unreasonable. Another unreasonable regulation, I think, is the idea of the definition of overcrowding. Okay. Overcrowding means having more than one person in a room. Okay, so each room in that house is habitable, except for the garage and the bathroom. All right, and the kitchen, right? So it’s habitable, okay, you can live in it. What happens if you live, you can only afford to be in a three bedroom house with a great room, and you have four kids? Are we going to say? Well, your house is overcrowded by this definition. So you need to split up the housing, you need to buy another home. So you split up your house so it’s not overcrowded, but that’s illogical, but yet we use that statistic to say, well, in that region, it is now overcrowded. Okay, but not taking into account the change in housing design. See before, it would probably be less likely to be overcrowded, because your great room was actually a living room, a dining room and a kitchen. So the living room can count, right, as a room, your dining room technically counts as a room, just not the kitchen. So now you got two extra rooms. But when you have a great room, it becomes one room. Or one can argue because the kitchen is in there, it cannot even be counted as a room. Then what do you have left? You have three bedrooms? So it’s this definition that is so outdated, it doesn’t keep up with current housing design.

Siyamak: So going back and looking into these definitions and auditing them, that that must be a big project that needs to get done at some point.

Peggy: Yes, absolutely. And I think for us elected officials, we have to have courage to do it. You know, one of the things in Yorba Linda that we had to go through, that I am inspired by the courage of the prior city council members, was they knew the importance of meeting those housing elements. And so they took the courage and went ahead to build it. But unfortunately, two of them were subject to recall. It was all about the fact that residents were mad at them for wanting to build the affordable housing projects that meet the state mandate. Right, and and all they’re doing is meeting the state mandate, but they have the courage to move forward and say it’s the right thing to do, otherwise, the state will sue us. And as a result, a group of citizens wanted to recall them. And it was very painful and expensive process for the city, because you have the people who are not in my backyard versus people who just said, I just want to meet the state requirements. So I think we need as politicians, we need to be forthright, we have to be courageous and doing the right thing. Even sometimes if you know the residents will vote you out of office, because you know that you need to do that. But most importantly is, we need to go back and really look at where the conflict is and not have to the excuse of, well I identify the problem, you could go solve it, we identify the problem, have the open mind to solve the problem, because we are behind in housing. The governor gave Southern California 1.3 million housing units that we need to build. That’s a very high number. I can tell you, if I demolish every single commercial building in Southern California and make them homes, I would not be able to provide 1.3 million. But what would that mean? It also means I just completely destroyed the economy of Southern California. Right? And that’s also making the assumption that all land is buildable. Some land is just not buildable because of contamination or geological challenges. So in Yorba Linda, we have a lot of hills, go ahead and go build. But now you have natural habitats you have to deal with. But how do you build into hills without causing danger? Those are the challenges. So not everywhere is buildable right? As we look at these, dealing with the challenges ahead.

Siyamak: Do you have any anything else to touch on?

Peggy: Well, I think that the best way to move forward in all of our problems that we’re facing locally and nationally, is we need to approach everything from a economic point of view, that if we can solve, give people economic security, which will lead to food security, and leading to housing security, then we will see a growth in terms of wealth, from the bottom up, as well as the reduction of homelessness, and in all this space, also the ability to afford the housing that we’re looking at.

Siyamak: That’s excellent. Thank you. Thank you so much. Thank you for being on the show. It’s great to have you.

Peggy: Thank you.