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I keep seeing folks showing RHNA numbers and a clear skew of new construction towards above moderate income units. It’s sometimes then asserted that we have built enough market rate housing and it’s only affordable housing that is needed. I think this is misleading. 1/8
As it was conceived, RHNA never really envisioned cities would build enough new units to satisfy each income category. It was intended to be a zoning exercise. It ensures cities zone to ALLOW for enough higher densities, should an affordable housing builder come forward. 2/8
To me, of course new construction favors higher incomes, it’s brand new! In the same way it’s unusual for brand new cars to be affordable to lower-incomes, I don’t know if it’s realistic to assume that new construction will be evenly distributed across all income levels. 3/8
In reality, many of the new market rate multifamily units age into the other categories as the structure gets older. The vast majority of lower-income households live in unsubsidized older housing stock that was built at market-rates but aged into lower rents over time. 4/8
Back to the car analogy, just because most folks can’t afford to buy a new car doesn’t mean we should stop building new cars. In fact, that would be bad for the non-rich because the rich folks who now can’t buy new cars would then bid up the price of used cars. 5/8
Now days, no unsubsidized new construction is affordable at the lower-income categories. As such, in order to actually hit the lower-income RHNA goals, every single unit needs subsidy. In the current RHNA cycle, that’s 350,000 affordable units across the big four regions. 6/8
There simply is not enough $ to subsidize that many units, and that’s just the big four CA regions. At $350,000 a pop, that’s over $120 billion. At current funding levels, we will never hit our lower-income RHNA targets. We need more funding for affordable housing! 7/8
Bottom line, we should not be surprised when new construction trends toward higher incomes. Do we need dramatically more funding for lower-income units? Yes. However, we should also be focused on building significantly more multifamily units at all income levels. 8/8
