Some High-Rent California Cities Aren't Building Enough Apartments, And Zoning Is Part Of The Problem

Cities near some of California’s biggest job centers are discouraging the construction of new apartments despite high rents and strong housing demand, according to a recent Brookings Institution report.

It found several affluent, smaller cities near Silicon Valley and Los Angeles went years without building a single apartment, even though they were home to the highest rents in the state. The report said strict local zoning rules prevented development, partly by limiting the amount of land reserved for apartment buildings and by restricting height and density.  

“Unfortunately, a lot of the most expensive places where there’s the most demand for people to live are actually doing the worst job at building apartments,” said Jenny Scheutz, co-author of the July report. “They’ve put in place a bunch of regulations that essentially make it hard or impossible to build apartments there.” 

The Brookings Institution is a nonpartisan research center. 

The report examined cities across the state, and found higher rents don't necessarily lead to more construction of apartment units.

Of the 12 cities with the highest median rents as of 2012 — all more than $2,000 per month at the time — researchers found nine failed to build a single apartment from 2013 to 2017. Those include Atherton, Hillsborough, La Canada Flintridge, Los Altos Hills, Monte Sereno, Rancho Palos Verdes, Rolling Hills Estates, Ross and Westlake Village. 

Over the past decade, California has built an average of about 75,000 homes per year, according to data cited by the California Building Industry Association. That includes single-family homes, condos and apartments. 

But it's far from the pace researchers and state leaders say is needed to meet demand. It’s also far from the promise Gov. Gavin Newsom set during his campaign of building 3.5 million new units by 2025. 

The building industry data also show California produced more multi-family units than single-family homes in five of the past six years. But, as the Brookings report demonstrates, that growth hasn’t been evenly spread out.

Scheutz said California’s housing growth has been concentrated in two places in recent years: Urban metros, which are building apartments, and in exurbs, communities beyond the suburbs where single-family homes are still being built. Closer-in suburbs aren’t building as much.

Those larger metros “can’t bear all the weight of this,” she added. “The suburbs need to do their part.” 

Los Altos City Manager Chris Jordan said his Silicon Valley community, has approved several apartment complexes over the past year, adding more than 80 units to its housing stock. He said it’s received applications that, if approved, could add another 300 apartments. 

Both Los Altos and Los Altos Hills were among the 12 cities in the study with the highest rents, though Los Altos had approved some apartments during the study period. 

“Cities don’t build. Developers build,” Jordan said. “All we do is create a regulatory environment that allows them to do so.”

He said the Los Altos City Council has encouraged developers to build rental apartments rather than condos, but has not recently reformed its zoning rules to spur apartment growth. 

Several cities listed in the report did not return requests for comment. A spokesperson for the League of California cities, which advocates for local governments, said no one was available on Friday or Monday to discuss the report’s findings.

Scheutz, the report’s co-author, said all of this matters because apartments and duplexes are cheaper than single-family homes. They offer more people an affordable option as California’s housing crisis continues. 

She said local governments across the state have “systematically put in place barriers through their zoning regulations that make it much harder to build apartments than to build single family houses. So, that effectively blocks the cheapest kind of housing especially in places that really should be building more of those.”