A major contribution to the solution to California’s chronic housing shortage has been obvious and inevitable for two years now, and should never have been the least bit controversial:
Since the early days of the shutdowns of the COVID-19 pandemic, when millions of white-collar workers were sent to work from home instead of the offices of law firms, insurance companies, stockbrokers and many other businesses, most of these workers have loved the change. Companies that want them back in the office, even part-time, have seen resignations by the score as workers move to employers that allow unlimited work from home.
Among other things, this creates billions of unused square feet in office towers and sprawling commercial complexes, even as developers continue to build new and new office space, much of which remains vacant long after completion.
Meanwhile, housing demand estimates have ranged from 1 million to 3.5 million units over the past five years, but fewer than 400,000 new units have been added in that time.
Back in April 2020, this column began urging lawmakers to add two and two and get four: Convert vacant office space into housing of all types and prices, from ground-floor studio apartments to 30th-floor penthouses with sweeping ocean views and more. the housing crisis can be solved. They can be rental units or condominiums. Either way, people would be housed without new construction footprints or the ransacking of existing neighborhoods where homeowners have invested their life savings.
Sure, there will be complications. Building conversions will require revisions to plumbing and electrical wiring, changes to existing floor plans, and the construction of new elevator shafts so that lazy upper-floor residents don’t have to mingle with lower-income people below.
But this is much easier, cheaper and less controversial than tearing down existing homes or building new subdivisions, which involve buying up land at high prices in California.
There may also be local zoning complications.
However, any bureaucratic issues could be quickly resolved by state lawmakers — and now they have. Already at the beginning of 2021, draft laws have begun to emerge in the legislature that make all of this possible, and the approval of building permits for conversions is almost automatic. Before this fall, they all died in committee, generally against union building, which wanted all conversions to pay union wages. The unions also believed that new housing would create far more jobs than redevelopment.
Meanwhile, the share prices of many real estate investment trusts that own office buildings and other now-vacant commercial properties fell as leases expired and were not renewed or had to be revised to include less space. At the same time, local property tax bases are threatened by reduced values of the same properties, including stores of all sizes vacated by pandemic shutdowns and growing online commerce.
All of these real and nascent crises eventually forced legislative leaders to act. Two proposed bills to allow for the rebuilding of both the big box office and office space have been held up by the fact that unions fund many Democratic campaigns and the Democrats who run Sacramento have been reluctant to cross them. That has changed. One new law, passed as AB 2011 by Oakland D-Assemblywoman Buffy Wicks, allows virtually unlimited conversions along main streets, but does not require union labor, only “prevailing wages.” The Carpenters’ Union supported this because they thought their members would get a lot of work doing the rebuilds.
The other, passed as SB 6 by D-Salinas state Sen. Ana Caballero, requires both union hiring and prevailing wages. AB 2011 requires redevelopments to include a large portion of affordable housing in redevelopments, while SB 6 promotes market-rate housing. Both will take advantage of high vacancy rates, allow real estate trusts to sell unused properties at decent prices and create tens of thousands of units much faster than building in new areas or redeveloping older neighborhoods.
The bottom line: It took years for lawmakers and their union supporters to understand and capitalize on the housing solution created by pandemic-induced workplace changes. However, these two measures should prompt the state to move towards a real solution to housing and to abandon the failed convoluted approaches.
Elias is the author of the current book, “Burzynski’s Breakthrough: The Most Promising Cancer Treatment and the Government’s Campaign to Suppress It,” now available in an updated third edition. Email him at [email protected]