Research shows Proposition 15 will not hurt housing

Research shows Proposition 15 will not hurt housing

Access to affordable housing is without a doubt the biggest challenge Californians face.  A 2016 McKinsey report set a target of building at least 3.5 million homes before 2025 to keep up with demand.  The same report also noted that half of California households could not afford the cost of housing in their respective regions.  Polls show that because of these limitations, half of Californians are considering relocating to another state. 

Happy FamilyWith this landscape in mind, it is critical that we carefully consider the impact of potential reforms on the production, preservation and protection of affordable housing.  As a part of a larger package of independent, nonpartisan research into the impacts of Proposition 15, the Schools and Communities First initiative, SVCF and partners commissioned Urban Institute to determine if there will be any adverse impacts on land use and housing if voters pass the measure.

Urban Institute’s reputable scholars conducted extensive research into the zoning incentives created by Proposition 15.  They looked at incentives in four California cities: Los Angeles, Fresno, Berkeley and Chula Vista.  Specifically, they wanted to know if the changes created by Prop. 15 – continued protections for residential properties while taxing commercial and industrial land at market value – would encourage more cities to rezone residential property for commercial or industrial use in order to increase the tax base. Their research found clear results, showing:

  • Cities have few opportunities to rezone residential land for commercial or industrial use.
  • City incentives to rezone to capture additional property tax revenue are reduced significantly by statewide property tax limits.
  • In every city, private owners stand to gain more in tax savings by converting opportunity properties to residential use than jurisdictions could gain by rezoning at-risk parcels.

This research provides clear evidence that Prop. 15, if passed by the voters, will do no harm in California’s quest to build more housing. 

This report by Urban Institute is the result of the final of six studies commissioned by SVCF and partners to understand the impact of Proposition 15.  With ballots being mailed to California voters on October 5, SVCF encourages voters to dig into this objective, independent research and make a fact-based choice. To support informed decision-making regarding Proposition 15, please view the previous studies on SVCF’s Schools And Communities First research page.