California Dreaming

After decades of climbing rents, City Hall is finally treating New York City’s housing shortage with the urgency it deserves. That was the message of City of Yes, the sweeping 2024 rezoning that represents the biggest transformation in the local land-use system since the City’s 1961 downzoning. That misbegotten overhaul helped precipitate the current crisis by constricting the city’s ability to build more housing when its population once again began to grow.

But for all its ambition, City of Yes is still only a first step. The package is expected to yield 80,000 new housing units over 15 years; credible estimates of the city’s actual housing needs suggest a deficit of closer to half a million homes.

Many are the plans to produce more housing. Mayor Eric Adams has what he considers an aggressive agenda, as does Democratic mayoral nominee Zohran Mamdani and former Gov. Andrew Cuomo, running for mayor as an independent.

But the five boroughs’ housing supply problem can’t be solved by the five boroughs alone. Metro areas function as ecosystems, and New York City has long been surrounded by suburbs with terribly restrictive housing production rules (along with a few decidedly pro-growth places like Jersey City). That exclusionary zoning only increases pressure on New York City itself to generate all the new units New Yorkers need.

Not even Albany can touch exclusionary suburbs in Connecticut and New Jersey, but New York lawmakers can certainly upzone Westchester County and Nassau County, which together send thousands of commuters to the city each day, and which could serve as release valves for the five boroughs’ growing population. Only the governor and State Legislature can overcome the collective action problem that throws the burden of solving a regional housing crisis on a handful of individual municipalities — while white, affluent, single-family-only communities free ride off the metropolitan area’s booming economy.

A problem of collective action

How to tackle this problem? Political leaders in Albany can take inspiration from California. California’s major cities are grappling with profound housing shortages and epidemics of homelessness, just as New York City is. And, like New York City, all of California’s high-cost cities are surrounded by suburbs whose exclusionary land-use regimes have only fueled downtown crises.

Yet Sacramento, unlike Albany, has now spent the better part of a decade preempting local zoning and permitting rules in an attempt to open those suburbs up to housing. New York needs to follow this lead.

Albany has already taken the first fitful steps in this direction. Gov. Kathy Hochul has at least talked a good game on housing production. In 2023, before abundance became a hot brand, she proposed a housing compact that would have loosened rules to allow more accessory dwelling units (ADUs or “granny flats”), allowed higher-density construction near train stations and incentivized housing production through tax exemptions. It foundered in the face of legislative opposition from both sides of the aisle. In 2024, her second, less ambitious attempt at statewide housing reform yielded real but woefully insufficient results.

California, in contrast, has now taken dozens of bites at the apple — and has the results to show for it. Sacramento’s pro-housing run began in earnest in the mid-to-late 2010s, when a handful of legislators embraced housing as a top priority. Around the same time, in 2017, a new advocacy organization called California YIMBY (Yes in My Backyard) became the main voice for YIMBYs in state-level politics. (Disclosure: I was California YIMBY’s policy director from mid-2022 until early 2025.)

With the help of California YIMBY and other pro-housing advocacy groups, a herd of housing bills was shepherded to the governor’s desk. Within the span of a few years, California enacted a series of ADU reforms (discussed below) that produced tens of thousands of new units of housing, legalized multifamily housing along commercial corridors, eliminated parking requirements for housing located near transit stops and added serious teeth to the state’s long-neglected oversight powers over local zoning. Most recently, the legislature passed a transit-oriented development bill that automatically upzones parcels near some transit stops. (As I write this, the bill is awaiting the governor’s signature.) That list of examples doesn’t even begin to cover the full breadth of California’s recent pro-housing reforms.

A mix of inside-game and outside-game strategies was key to these successes. Thousands of local YIMBY volunteers across the state contacted their legislators and even flew to Sacramento in order to support specific bills. They also organized their communities, spoke out in favor of individual projects in their towns and rallied to the support of local pro-housing candidates. Many of them even ran for office themselves. The volunteers gave crucial leverage to the professional YIMBY advocates tasked with rounding up votes for pro-housing legislation.

And crucially, pro-housing heroes in the legislature heard them and acted. It was these representatives and their staff who bore primary responsibility for carrying their bills from the first committee hearing to final approval in the second chamber. It was they who had to take most of the heat from both skeptical colleagues and NIMBY constituents.

Sacramento on the Hudson?

There’s no time for victory laps. The long fight to end the Golden State’s housing shortage continues, both inside and outside the legislature. According to the state’s Department of Housing and Community Development, California has a deficit of approximately 2.5 million homes. Homelessness remains at historic levels, and more than half of all renter households are moderately or severely cost-burdened. 

Still, we’ve made enough progress for New York to take a hard look at what’s gone right in California, and why.

Lesson one is that the legislature needs its own housing standard-bearers who know how to navigate both the halls of power and the public discourse and who have a certain appetite for political risk.

Second, work must proceed on multiple tracks at once. Consider the California YIMBY legislative package of 2019. That year, YIMBYs pursued a dual-pronged strategy: They attempted to pass a massive bill that might have single-handedly ended the housing shortage (SB 50, a hypertrophied predecessor of the transit-oriented development bill that passed this year), but they also pursued a set of apparently mundane technical fixes to ADU regulations, which were putatively aimed at adjusting inefficiencies in the process to approve these smaller housing units on the lots of larger, usually single-family, properties.

California, just beginning to grapple with its housing crisis, saw in SB 50 the value in starting out strong: The bill’s ambition matched the scale of the crisis. And while it ultimately died on the Senate floor, the bill helped push housing to the top of the legislature’s agenda and elevate the perceived strength of the YIMBY movement. It also drew fire away from those minor ADU tweaks.

Those relatively modest ADU reforms passed — and showed the power of fine print. In 2016, cities and counties issued 1,336 ADU permits; in 2017, they issued 5,153; in 2023, they issued more than 28,000. That’s thousands of new homes.

YIMBYs in both the legislature and at the local level have been building on ADU law since 2016. Part of the secret to this approach has been that housing advocates approach ADU policy as a single coherent package: they have fought for tweaks related not just to zoning and permitting, but also to utility hookups, parking requirements, owner-occupancy rules and so on. The sheer comprehensiveness of ADU reform is an important takeaway in itself; exclusionary jurisdictions will use every tool at their disposal to block new housing, so any attempt to legalize a particular housing typology must be watertight.

A cautionary note

Not every lesson from California is a positive one, however. Take the story of SB 9, a bill from 2021. That bill, which was hyped as the effective end of single-family zoning in California, was supposed to allow for the construction of duplexes on most single-family lots; further, it would allow homeowners to split those lots in two, effectively legalizing the creation of up to four units of housing where previously only one had been permissible. It was a great idea in concept, but the results have been disappointing: In the first year since implementation, California’s largest cities approved just a handful of SB 9 permits.

SB 9 hasn’t worked for a few reasons. First, the bill is far from watertight: Some jurisdictions have succeeded in keeping out SB 9 projects through tricks like imposing unworkable design standards and making tactical use of historic preservation rules. Second, just because it is legally feasible to build something, that doesn’t mean it is economical: Converting a single-family home into two duplexes tends to cost more money than it is worth. And third, many people who own single-family lots already had an option for adding one or two additional units: It is likely that SB 9 is, to an extent, a victim of ADU reform’s success.

In 2024, a new piece of legislation fixed some of the flaws in SB 9, but most of the underlying problems remain. Cleaning up the legislation has proved challenging, as there appears to be little appetite in the legislature for revisiting the original, fairly bruising fight to pass it. (Another cleanup attempt, this year’s SB 677, didn’t make it out of committee.)

One lesson here is that it is better to underpromise and only ask your allies to take hard votes if there will be a substantial policy or political payoff. Overpromise today; engender cynicism tomorrow.

Another important takeaway is that economic feasibility is everything when it comes to pro-housing legislation: If you want units to get built, you need to make sure that it is worth someone’s while to build them. That means the process needs to be as smooth and efficient as possible, and the rules need to be flexible enough that projects will reliably yield sufficient returns to compensate developers’ shouldered risk. ADU reform satisfied these requirements; SB 9 did not.

If future attempts at state-level housing reform are going to succeed, New York’s pro-housing advocates will likely need to engage in deeper grassroots organizing, especially outside of the five boroughs; they will need to cultivate charismatic and highly sophisticated legislative champions, ideally on both sides of the aisle; and they’ll need to pay close attention to the legislative politics of reform.