Panel, Conference Presentation
Strategies for Expanding Affordable Housing | Global Conference 2025
Milken InstituteJennifer Sondag, Stephen J. Cloobeck, Scott Epstein, Martin Muoto, Shane Phillips, Stephanie Rawlings-Blake
- Core Obstacle: The primary barrier to affordable housing is a chronic, decades-long shortage of supply, with the U.S. currently estimated to be over 5 million homes short.
- Regulatory Burden: California is cited as the most regulated state with over 380,000 regulations, creating a process that is "thousand times more difficult" to navigate compared to the 1980s or 1990s.
- Specific Code Issues: Restrictive building codes, such as the requirement for double stairways in every building, significantly limit the number and type of units that can be constructed.
- Permitting Delays: The discretionary entitlement process involves high risks, onerous costs, and exposure to lawsuits, particularly under environmental regulations like CEQA which critics argue inhibits infill housing.
- Public Misconception: Recent studies reveal that while the public correctly predicts price drops from supply shocks in cars and food, they incorrectly assume housing supply increases lead to higher prices or no change.
- Education Success: Educational outreach regarding supply dynamics has been shown to increase public support for housing by 30 to 40 percent, indicating the majority of the public is open to changing their views.
- Legislative Momentum: Senate Bill 79 is moving forward to require cities to allow dense housing near transit, following the precedent of Senate Bill 82 (2017) which forced Los Angeles to plan for 456,000 new homes in its current cycle, up from 82,000 in the previous cycle.
- Zoning Reform Model: Cambridge, Massachusetts, implemented city-wide upzoning to allow four-to-six-story multifamily units, resulting in lowered prices and serving as a national leader in zoning reform.
- Auckland Precedent: New Zealand enacted city-wide reforms in 2016 and country-wide reforms in 2019/2020 after a decade of under-the-radar movement building and education starting around 2005.
- Political Strategy: YIMBY (Yes In My Backyard) movements are shifting from being isolated to gaining traction, with state leaders like the Speaker of the Assembly now identifying as pro-housing advocates.
- Personal Impact: Panelist Martin, a developer, lost his home and possessions in the Palisades fires, using the displacement of 60,000 people in LA as a catalyst to demand urgency in fixing bureaucratic barriers.
- Private Sector Critique: Developers and capital allocators criticize local officials for a lack of trust, untruths, and failure to manage basic infrastructure, citing negative value delivered on life safety issues.
- Cost Disparity: Nonprofits building affordable housing in Los Angeles face costs of $700,000 to $900,000 per unit, whereas disciplined private operators aim to build sustainably for $279,000 to $287,000 per unit.
- Public-Private Partnership: There is a strong call for increased public-private partnerships to leverage private sector efficiency and capital, contrasting with the perceived execution and accountability failures in purely public or nonprofit projects.
- Federal Uncertainty: Concerns were raised regarding federal policies, specifically tariffs described as an "act of war," and the need for a "hard center" approach with certainty at federal, state, and local levels.
- Mayor Criticism: Panelist Stephen Zake, running for Governor of California, proposed pausing CEQA and the Species and Wildlife Act to address the affordability emergency caused by regulatory overlap.
- Institutional Responsibility: Leaders from cities like Baltimore and Los Angeles are calling on mayors to treat housing as critical infrastructure, removing barriers rather than treating it as a niche issue.
- Workforce Housing: A significant issue identified is the mismatch between job locations and housing availability, leading to excessive commutes for essential workers like teachers and healthcare staff.
- Single-Family Zoning: Panelist Scott Epstein identifies the inability to build in single-family zones (which make up 75% of LA land) as a primary driver of development pressure on existing multifamily stock, often leading to tenant displacement.
- Proposed Immediate Actions:
- Declare a federal housing affordability crisis and focus on deregulation that allows good business to operate without inhibiting growth.
- Open up single-family neighborhoods to multifamily development to address equity and carbon emissions caused by long commutes.
- Encourage institutions (universities, hospitals, corporations) to incentivize and build affordable housing for their own workforce.
- Shift narrative from negative "eating vegetables" framing to positive stories of community improvement, parks, and family stability.
- Long-term Strategy: Success requires a "long game" approach where capital providers and operators accept headline risks in exchange for long-term social impact and returns, building trust through consistent, ethical execution.
- Collaborative Culture: The panel emphasized moving away from polarization and "headline risk" avoidance, advocating for a culture where private sector profit motives align with social good through pragmatic collaboration.