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San Francisco Chronicle​

Who are the most powerful NIMBYs in California? Realtors

First-time homebuyers in California face a treacherous path: Inventory is scarce, and the few homes on the market in the state's major cities are likely to run well over $1 million. You've no doubt heard many of the explanations for why it's so difficult to buy a home, including antiquated zoning restrictions and overzealous environmental regulations that have blocked new construction. Yet the headlines often overlook another crucial impediment for prospective homebuyers: California real estate agents. Without the help of creative real estate professionals, my wife and I might never have broken into the California housing market. From 2018 to the end of 2021, single-family home prices in our home city of Los Angeles increased by almost $300,000, or 47.7%. By 2021, a mere 15.5% of people ages 25 to 35 owned their own homes. If that were the only option available to us, we might have been forced to relocate like the 9.2 million California residents who moved to other U.S. states during the 2010s. Thankfully, our real estate agent helped us explore an alternative arrangement, which led to us buying a duplex with a friend. Duplexes, along with townhomes and cottage courtyards, are all forms of ' missing middle housing ' that have historically served as a common starter home for families. Our story should be more common — after all, no one should be more invested in expanding creative home sales opportunities than real estate agents, whose job is to help families realize their homeownership dreams. Instead, the leadership of the California Association of Realtors has used its considerable political lobbying power to consistently oppose reforms that would make homeownership more accessible to families. Zoning is one example. One of the most impactful reforms to unlock homeownership is to make zoning more flexible, increasing the potential supply of homes in existing neighborhoods. My wife and I were only able to own a home because we bought in a neighborhood that had legalized duplexes decades ago. When Auckland, New Zealand, adopted flexible zoning in 2016 to allow starter homes options, such as townhomes and triplexes, buyers of these new homes were most commonly first-time homeowners. Even better, the city has had a much-needed decade of home price stability since those reforms, even while prices rose in the rest of the country. In California, only 7% of new homes in California are built under 1,400 square feet. Increasing the construction of smaller homes would do wonders for first-time homeowners. Yet two bills that would have done this by making it easier to create 2 to 8 unit buildings on all residential land in California — SB677 and AB647 — both failed this spring, in part due to loud opposition from the realtor lobby. Last year, the California Association of Realtors also lined up against legislation to reform construction liability laws to make it more financially feasible to build condominiums. Liability fears have slashed condo construction in California to a fraction of its peak in the mid-2000s, with about 90% of multifamily construction now being built as rental housing. This trend is not driven by interest rates: other places are building multifamily housing. The percentage of new units built as condos is four times higher in Hawaii than in California. Yet, in 2024, when lawmakers considered reforming liability law, the realtors' association played an instrumental part in opposing the bill, which ultimately led to its demise in committee. This opposition harms clients and undermines the association's members. As of March, there were 428,895 licensed real estate professionals in California, and only about 58,000 homes listed on the market — roughly eight professionals per listing. The math does not favor the average real estate professional's success — not due to a lack of effort, but rather because outdated zoning codes restrict supply. Housing reforms would be especially beneficial to younger real estate agents, who often achieve their first sales by helping friends buy a home. Effectively banning starter homes in California will permanently lock them out of the industry. Supporting flexible zoning would allow real estate agents to live up to their commitment to righting historical wrongs. In 2022, the California Association of Realtors officially apologized for its role in the long history of denying access to neighborhoods based on race. Yet racial inequality in the real estate market is ongoing, worsened because of bad policies to restrict supply. From 1980 to 2021, the homeownership rate among Black Californians ages 25 to 35 dropped from 10.8% to 1.4%. Opposing zoning reform, especially changes that would open up high-opportunity neighborhoods, is putting the association on the wrong side of its rhetorical commitments, cheapening any sense that it cares to atone for past wrongs. California's aspiring homeowners and young real estate professionals deserve better. The housing market and economic environment are too complex for such an important institution to take stances that make homeownership more difficult. If the leadership of the California Association of Realtors wants to uphold the group's stated ethics of 'protect and promote the interests of their client,' it should consider embracing housing reforms, not standing in their way. Otherwise, the agents and clients the association serves may start asking harder questions about whose interests are ultimately being prioritized.