California Zoning Reform and Housing Justice

Source: cayimby.org/sb-9

On Sept. 16, California Governor Gavin Newsom signed off on a variety of new initiatives designed to address the state’s housing affordability crisis, including the California Comeback Plan and Senate Bills 8, 9, and 10. In this post, I offer my thoughts on Senate Bill 9. This new law, in conjunction with several laws passed in 2019 to ease restrictions on the creation of accessory dwelling units, is a good example of the principle of “bundle flexibility” that I describe in my book, Just Housing.

During the Progressive Era, property theorists recognized that the right to own property was best understood as a bundle of rights that protect different types of privileges, claims, powers, and immunities. John Christman (1991) differentiates two distinct types of rights in this bundle: control rights (rights to use, possession, management, modification, and alienation) and income rights (rights to the increased benefit from relinquishing ownership temporarily or permanently).

In Chapter 7 of Just Housing, I define a “property regime” as the bundles of income and control rights held by property owners, inhabitants, and investors; the public regulations that constrain certain bundles of rights; and the tax and subsidy policies that redistribute income rights to property. A “secure tenure” residential property regime is one that recognizes the right to housing, understood as a control right to residential property, as the most important stick in the property rights bundle.

The idea behind the principle of bundle flexibility is that residential property regimes should allow bundles of rights to be easily disassembled and reassembled to promote the expansion of the right to housing. In some cases, it may be necessary to sever, reassign, or eliminate certain “sticks” in property owners’ bundle of rights to facilitate the expansion of control rights to residential property. For example, Washington, DC’s Tenant Opportunity to Purchase Act grants tenants the collective right of first refusal to purchase apartment buildings being offered for sale, thereby enhancing the tenure security of individual tenants. Similarly, rent controls expand tenure security for individual renters by constraining rental property owners’ rights to earn rental income. Inclusionary zoning, shared equity homeownership arrangements, and community land trusts restrict homeowners’ rights to earn equity from the sale of their homes in exchange for deed restrictions that lower the initial purchase price of the homes.

The deconstruction and reassembly of property rights bundles do not always promote the expansion of control rights to secure residential tenure. Single-family zoning ordinances, for example, constrain and collectivize an individual property owner’s right to make decisions over property use, but this reconstruction of the property rights bundle reduces, rather than expands, an insecurely housed person’s right to housing.

Senate Bill 9 is a small step, but an important one, that restructures the residential property regime to put California’s housing market on the path towards housing justice.

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