Schniepp: Cities’ Denial of Home Building Caused Crisis

The South Coast’s leading economist says municipalities that deny housing are to blame for California’s housing crisis. 

In his monthly newsletter,, Mark Schniepp, head of the Goleta-based California Economic Forecast, wrote, “Cities that deny housing are a principal and direct cause of the housing crisis.” 

Gov. Jerry Brown and top state lawmakers are working on legislation aimed at dealing with the housing crisis, which Schniepp said include: SB3, the Affordable Housing ($3 billion) Bond Act; SB35, aimed at streamlining the affordable housing approval process; and AB1505, which would require new rental housing developments to include a certain percentage of affordable homes. 

“The general notion prevailing today is that the state needs to do more to penalize cities and counties that are blocking development before agreeing to spend more dollars subsidizing projects,” Schniepp wrote. 

Schniepp noted that the Santa Barbara City council considered a rent review and stabilization ordinance in March 2017, but declined to make it into a policy and will consider rental mediations and inspections issues instead. 

In this Santa Barbara city election year, with the mayor’s job and several council posts up for grabs, some controversy has been generated from the Average Unit Density ordinance, which has fast-tracked several hundred small housing units. 

Earlier this year, Schniepp said he supported the notion of housing units being used to replace empty retail spots along State Street. As of late, the city has not taken action on that idea. 

“For California, the ‘housing crisis’ is a direct consequence of the state’s economic boom,” Schniepp wrote. “And 30 years of resistance to housing development has resulted in an onerous environment for the creation of new housing today. … (A) booming economy and the lack of construction of homes and apartments have conspired to produce the current housing crisis.” 

He wrote that many experts consider the current crisis a “bubble” and expect another crash like the one that preceded the start of the recession in 2007. 

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