Waiting For Apartments Where The Pavement Ends

By Nigel Duara Orlando Mayorquin Nigel Duara Araceli Martinez Ortega Jackie Botts, CalMatters

February 23, 2021

In summary

State housing planners continue to allocate tens of thousands of low-income units in Riverside County despite a lack of suitable land, let alone any willing developers. The broken zoning process is a lose-lose for state and local governments alike.

MORENO VALLEY, CA — The red flags are everywhere for a builder staring out at wide swaths of Riverside County’s second largest city: grassy lots, bumpy dirt roads, entire blocks without streetlights and an unreliable water system where water pressure drops without warning.

“Sometimes cabs won’t come if you call them here,” said former Moreno Valley councilwoman LaDonna Jempson about the low-income area called Edgemont, which she used to represent.

Still, the lack of infrastructure, from roads and electricity to water and sewer, hasn’t stopped state housing planners from earmarking some 14,000 low-income units in Moreno Valley to help address the state’s housing crisis — even if none of it ever gets built.

Local officials say what happened here has happened across Riverside County and other parts of California over the last eight years, and it’s likely to happen again over the next eight. State auditors note it’s the result of California’s ineffective affordable housing plan, which allows communities across the state to set big goals without offering an incentive to follow through on building more units. It assumes that local markets will magically solve an expensive problem that’s been simmering for decades.

So far, the process is lose-lose: Developers don’t want to touch density housing projects that usually deliver a very low return, local communities oppose tall, busy apartment buildings and, though the state can make demands, its housing allocation process gives it no way to enforce the construction of actual units.

Allocating affordable housing

Under the state’s Housing Accountability Act passed in 2017, the Legislature was mostly concerned with punishing communities that zone out affordable housing. Lawmakers didn’t foresee the practical effect of that policy: Today, if a community creates zoning for affordable housing and no one builds, the community simply gets another dollop of affordable housing in the next allocation.

That’s what happened in Riverside County. During the state’s last Regional Housing Needs Allocation process (a series of eight-year cycles that takes into account a host of factors to determine regional housing needs, including population, employment and household growth), the county was allocated more than 30,000 units across all income levels between 2011-2019, and 40,000 units allocated between 2021-2029, with 17,000 of those units designated for very low- and low-income housing.

To build those units, the county zoned more than 1,000 parcels and thousands of acres for high-density housing and waited. And waited.

“To date, no developments have been approved or applied for that took advantage of the previous effort,” the county wrote in its appeal of its latest allocation.

‘It doesn’t pencil’

Housing of any kind gets exponentially more expensive the higher you build, said Nick Cammarota, general counsel for the California Building Industry Association. And density housing projects of several stories with 20% set aside from very low- or low-income housing units are going to pass the costs on to tenants paying full fare.

“The reason (affordable housing) doesn’t get built is because it doesn’t pencil,” Cammarota said.

Then there’s local opposition. “Density attracts opposition,” Cammarota added, “even if it’s just the same density as what’s surrounding it.”

A last barrier: the cost of infrastructure. In a place like Riverside County, a desert spread across 7,300 miles that shares an eastern border with Arizona, developers are responsible for paying for new water and sewer lines to housing projects, a cost that stops most projects in their tracks.

Before the coronavirus pandemic upended nations and sent the core of California’s social safety net into freefall, affordable housing and homelessness were at the top of Gov. Gavin Newsom’s agenda. A major vehicle for advancing that agenda was the construction or conversion of new affordable housing.

The main barriers to new affordable housing are finding sites close enough to transit and jobs to create housing where low-income people will want to live. Then, local governments have to get developers to bid and build on those sites.

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Zoning doesn’t spur building

Riverside County is home to four of the newest California cities, and when those cities incorporated, the county was left without four of its largest transit and employment hubs.

“We identified land, but the market is just not there,” said Riverside County interim CEO Juan Perez.

It’s going to take money, and lots of it, to fix the broken road from zoning to building, Perez said.

The state’s Housing and Community Development spokesperson Tressa Mattingly concedes her department’s enforcement is mostly limited to zoning.

“Local governments have far less influence over whether developers come in with applications,” Mattingly said. “If developers do not bring forward applications, this in itself is not a violation.”

The RHNA process allows for rich municipalities to argue down their allocations, based on an appeals process that is subject to intense lobbying. That’s partly how Beverly Hills and Newport Beach ended up with tiny affordable housing allocations.

Cities appeal allocations

Cities across Southern California made pleas for smaller allocations. Downey contends that the cost of improving its water lines will fall to developers, who will choose not to bear the cost and refuse to build. Orange County argues that its sewer system can’t bear the increased influx of proposed housing allocations in its unincorporated areas. Pico Rivera says it has no excess land to rezone. And Barstow’s appeal of its allocation closely mirrors that of unincorporated Riverside County.

“The city has plenty of affordable land and vast areas zoned for housing,” the city of Barstow wrote in its appeal letter. “We are pro-growth, but the demand is not present.”

For newer cities without much power, the allocations remain high. Moreno Valley, known as MoVal to locals, received an allocation of 13,627 very low-income units and 3,779 low-income units.

Dirt roads, potholes

Former city councilwoman Jempson doesn’t think they’ll ever get built.

While hotels are going up at busy intersections and $400,000 homes are rising behind a golf course, the district’s edges have the same beige and ochre color scheme as the better part of town, with the same palm trees and a more distant view of the mountains.

But as Jempson drives deeper into the district, the roads get bumpier, the houses bunched more closely together. A rooster crows in a dusty front yard. There is little sign of public transit.

Finally, she reaches the block she wanted to show. A sign says “Pavement Ends,” and indeed it does. The dirt roads line the poorer parts of Moreno Valley, juddering drivers with large potholes carved into the earth by rain.

“Don’t drive down here if you’re expecting,” Jempson said with a laugh. “These potholes will send you right into labor.”

Jempson sees potential in this area. But for now, the state hands down the number of affordable housing units it wants, cities and counties appeal their allocations and California’s affordable housing crisis continues with no end in sight.

This article is part of the California Divide, a collaboration among newsrooms examining income inequality and economic survival in California.

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