The Hill: California reparations task force should tackle root of housing crisis

July 05, 2022 | By ANDREW QUINIO
Gavin Newsom speaking at bill signing

A house divided cannot stand, and at today’s prices, it can’t be afforded either. That is especially true in California, where the dream of homeownership has failed to materialize for individuals of all backgrounds. Home prices are undeniably prohibitive for many Golden State residents; California has the second-highest median home price and one of the lowest homeownership rates in the nation. But instead of focusing on policies to make homeownership affordable for all Californians, the state seeks to grow the divide with race-based solutions that fail to address the primary causes of today’s high home prices.

On June 1, the California Reparations Task Force, established in 2020 to study and develop reparations proposals for African Americans, released an interim report with recommendations on various issues affecting Black Californians, including homeownership. The report recognizes that the government at all levels historically enacted or enabled discriminatory practices such as racially restrictive covenants and redlining that prevented Black residents from owning homes. Even though many of these discriminatory practices ended, the report posits that these “badges of slavery” resulted in a wealth gap that has prompted Black Californians to leave unaffordable cities or move out of the state entirely.

While historic discriminatory housing policies may partially explain why many Californians cannot afford to own a home, the ongoing causes of home unaffordability are much closer than the task force acknowledges.

California does not have enough homes, causing prices to skyrocket out of reach. The culprits are current government policies that hinder new construction, including stringent land-use regulations, exorbitant building fees, and protracted environmental reviews under the California Environmental Quality Act (CEQA). New houses cannot be built fast enough because of these restraints, making the few homes in existence too expensive. If its goal is to increase homeownership among African Americans, the task force should be keen to resolve these impediments since all Californians feel their impact.

Instead, one of the task force’s solutions is to subsidize these costs, rather than reduce them. They recommend establishing a state-subsidized mortgage system that guarantees low-interest rates for Black mortgage applicants. This models other reparations efforts across the country that merely pay the housing costs instead of changing the policies that make those costs so high in the first place.

In Evanston, Ill., where the median home price is five times the median household income, eligible Black residents will receive vouchers for down payments, mortgage payments or home repairs but cost-increasing tax rates and restrictive zoning rules go unchanged. In Washington, D.C., a $10 million fund was unveiled to support Black homeownership investment, while zoning and other regulations limiting the housing supply linger. Like Evanston and D.C., California will throw more money at the symptoms of supply-killing policies. Having Black purchasers pay the same high prices as everyone else is not a solution.

California’s task force does not have to continue this trend of accepting high housing costs. Their report recommends eliminating anti-Black housing policies and practices, but expanding this effort to all anti-housing policies would help all residents, including Black Californians. The California Building Industry Association has some suggestions on where they can start. The group identified several pending “housing killer” bills that would further restrict the home supply. They include AB 1001 and SB 1404, which expands CEQA, and AB 1771, which imposes an additional tax on home sales. Such policies cannot be good for anyone in California trying to own a home, no matter their skin color or ancestry.

Housing policies that expand opportunities for all Californians do not exclude Black residents. The state can still raise awareness of past discrimination while advancing solutions that benefit every Californian, but neither will happen if it continues indulging the Reparations Task Force’s divisive and recycled policies.

California’s diverse residents, many of whom probably also could claim the impact of past discrimination, will not accept being saddled with remedying those past wrongs while being excluded from policies designed only for some. Solutions for all Californians is the better way forward, as we cannot afford a housing crisis divided.

This op-ed was originally published at The Hill on July 5, 2022.