https://www.nytimes.com/2021/10/08/business/economy/california-housing.html
WheretheSuburbsEnd
Asingle-familyhomefromthe1950sisnowarentalcomplexandavisionofCaliforniaʼsfuture.
By Conor Dougherty
Oct. 8, 2021
Sixty-fiveyearslater,MargieCoats,79,stillremembersthetour.Herfatherdrovethesixofthem—twoparents,four sisters—toaweekendshowingwhereinherteenagenaïvetésheaskedasalespersonifthefurniturewasincluded. Thefamilypaid$13,250forLot118andayearlatermovedinto5120BaxterStreet.Thiswasin1957,backwhenthe surroundingClairemontneighborhoodwasboomingwithnewsubdivisionsandmass-producedsuburbswerestilla nationalexperiment.
NeighborsinClairemontVillaspickedfromaselectionoffourranchhousesthathadthesamecabinets,similarfloor plansandanoptiontoaddawashingmachine.(Clothesstillhadtobedriedonaline.)Mostoftheresidentswere youngfamilieswithparentswhoworkedamixoftradeandprofessionaljobsthathadroughlythesamepaychecks.
Ms.Coats’sfather,PaulShannon,wasanaeronauticalengineerwhohadlefttheNavytoworkinprivatedefense.This affordedthemtherelativeaffluenceofafour-bedroomhousewithayardthatwasbiggerthananyoftheirneighbors’. Itbecametheblock’ssocialcenter.
“Thatwaswhereeverybodycongregatedontheweekends,”Ms.Coatssaid.“Peoplewouldpitchin:Somebodywould bringbeer,somebodywouldbringhamburgers,somebodywouldbringhotdogs,andwewouldjustallgather.”
Ms.Coatshasnotventuredfarsince:Shemovedabout40feetawayandhasspentalmostherentireadultlifeliving acrossthestreetfromherchildhoodhome.Herformeryardisthefirstthingsheseeswheneversheleavesthehouse,a viewthatallowedhertofollowthedailyprogressofaconstructionprojectthatoverthepastfewmonthstransformed 5120Baxterfromthesuburbanvisionofthe1950stoaprojectionofCalifornia’stighter,tallerfuture.
InJune,asMs.Coatstoldmeaboutthehouseandtheneighborhoodfromherdoorstep,shegazedtowardafresh foundationthathadentombedthebackhalfofLot118inconcrete.Overthenextfewweeks,aconstructioncrew erectedatwo-storybuildingthatfilledinagreenrectanglefromtheClairemontVillasbrochure.Afewfeetaway,the originalfour-bedroomhousewasloudlygut-renovatedintoapairofapartments.
MargieCoatsinfrontofherhomeintheClairemontneighborhoodofSanDiego. SandyHuffakerforTheNewYorkTimes
Whentheworkersheadtotheirnextjobthismonth,theywillleavewhatamountstoatriplexrentalcomplexonthe typeoflotthatinthesevendecadessinceMs.Coats’sfamilymovedinhadbeenreservedforsingle-familyhouses.It’s partofapushacrossCaliforniaandthenationtoencouragedensityinsuburbanneighborhoodsbyallowingpeopleto subdividesingle-familyhousesandbuildnewunitsintheirbackyards.
DanLogue,60,ateacherwholivesonBaxterStreet,saidhewasexcitedabouttheproject,andbackyardhouses generally,becausetheyallowedhomeownerstodeveloptheirownland.(“Neighborhoodschangeaspeopledieoff,and that’sjustreality.”)Ms.Coatswasso-so.ShesaidshewasworriedaboutlessparkingbutalsoaboutSanDiego’s housingproblemandhopedthenewunitswoulddosomegood.(“I’mnotgoingtogodowntotheCityCouncilandbeat myheadagainstthewallandsay,‘No,no,no.’”)
CaryGross,63,whoownsatilecompanyandlivesnexttoMs.Coats,isagainstit.Heinvestedonasingle-familyblock 25yearsagowiththeexpectationthatitwouldstaythatway.“Theysaythey’redoingthissoeveryonecanhavethe Americandream,”hesaid.“ButwhatabouttheAmericandreamoflivinginasingle-familyneighborhood?”
Thehouseat5120BaxterStreethasbeenhometothreefamiliesandcontainsanynumberofstories.TheoneI’mgoing totellyouisaboutthehouse’splaceinCalifornia’sspiralingaffordablehousingcrisisandthestate’seffortstohaltit.
ThesuburbandreamthatMs.Coats’sfamilyboughtintohasbecometheAmericanhousingsystem.Reformingitiskey toanynumberofexistentialproblems,includingreducingsegregationandwealthinequalityorcombatingsprawland climatechange(transportationaccountsforaboutathirdofthenation’scarbondioxideemissions).Buttheprocess willbelonganddifficult,assingle-familyneighborhoodsareAmerica’spredominantformoflivingandhomeowners broadlyenjoythem.
Theimplicationsgowaybeyondgeography.TheAmericathatprevailedwhenMs.Coats’sfamilyofsixmovedto BaxterStreetwasamoremiddle-classcountry,wherewomenhadabout3.5childrenonaverage.Todayinequalityis muchstarker,andthefertilityratehasbeencutinhalfasadultsremainsinglelongerandhavefewerornochildren aftertheypairup.Membersofthemillennialgenerationcontinuetolagtheirparentsinhomeownership,and20 percentofU.S.householdsaremultigenerational—upfrom12percentin1980—asfamiliesgrapplewiththecostof living.
Inotherwords,thepressuretoremakeneighborhoodslikeClairemontisduenottosomesuddenshiftinwhatpeople wantoutofahomebutrathertothesweepingsocialchangesthathavealreadyplayedoutinsidethem.Asthe ColumbiaUniversityhistorianKennethJacksonwrotein“CrabgrassFrontier,”hisseminalhistoryofAmerica’s suburbs:“Nosocietycanbefullyunderstoodapartfromtheresidencesofitsmembers.”
WhenMs.CoatsmovedintotheBaxterStreethouse,afamilyneededrightaroundthearea’smedianincometoafford the$82monthlymortgagepayment—thedefinitionofmiddleclass.TodayatypicalClairemonthomecosts$850,000, up30percentfrom2019.AfamilywouldneedtomakeaboutdoubleSanDiego’smedianincometoaffordone, accordingtoRedfin,therealestatebrokerage.Anditwouldn’tbeanewplace.
ThatinflationallbutdefinedthelivesoftheReecefamily,whichmovedinto5120BaxteradecadeaftertheCoats familymovedoutandstayedthereuntillastyear.JohnReecewasaretiredmasterchiefpettyofficerintheNavywho spentfiveyearssavingforadownpaymentbylivinginatrailerparkwithhiswife,Barbara,andbabydaughter, Patricia.TheReecesenteredthehousein1976asrentersandboughtittwoyearslater.
PatriciaReecewouldspendmostofheradultlifestrugglingtoleaveforahomeofherown.Shemovedintoandoutof BaxterStreetseveraltimeswhilesheraisedkidsandcompletedcollege.In1993,theyearahousedowntheblockfrom BaxterStreetsoldfor$117,000,sheandherhusbandatthetimemovedtoPennsylvaniawithaplantoemulateher parents’strategyofsavingmoneyinatrailer.(“Wewerelike,‘Hey,myparentsstartedinatrailer—wecangetour trailerandmakethishappen.’”)Whentheyreturnedtwoyearslater,thesamehousewasonthemarketfor$168,000, Ms.Reecesaid.
ClairemontVillasin1955. SanDiegoHistoryCenterCaliforniahomepriceshaveonlyrisensince,resultinginaworst-in-the-nationaffordablehousingcrisis.Juxtaposed againstlargenumbers(amedianpriceover$800,000)andzanystories(sales$1millionabovetheaskingprice)are thescenesofabjectmiserythatunfoldinthedailylivesofthe100,000soulswholivealongitsfreewaysandstreets.
Therootofallthisisadecades-oldhousingshortage.Sincethemid-1970s,whenhomepricesbeganoutpacingwages, plannersandeconomistshavearguedthatCalifornia’shousingproblemswillpersistaslongasitremainsoneofthe hardestplacesinAmericatobuildshelter.Nevertheless,citycouncilsandtheStateLegislaturemoreorlessignored thisadviceuntilafewyearsago.
Facedwithballooninghomecoststhatevenapandemiccouldn’ttame,politiciansfrombothpartiesnowroutinelytalk aboutthestate’sandnation’saffordabilityproblemsintermsofalackofhomes.Thedebateisaboutwhereandhowto buildnewones.
BuildingsAreCroppingUpinSanDiegoBackyards
BuildingapplicationsforaccessorydwellingunitsinSanDiegofrom2018through2020, byZIPcode
Theareaaround SanDiegoState Universityhasalso seenanexplosion ofA.D.U.s.
AcrossAmerica,housingisforthemostpartbuiltinoneoftwofamiliarways.Thefirstiswhenacresoffieldsoutside theurbancenterareturnedintowidestreetsandcul-de-sacsnamedaftertrees.Thesecondiswhenadeveloper descendsonanalreadyurbanizedneighborhoodand,afterdonatingtoafewcampaignsandfeudingwithantigentrificationactivists,buildsaglasscondominiumtowerorhigh-rentapartmentbuilding.
Inthevastzonebetweenthosepoleslieexistingsingle-familyneighborhoodslikeClairemont,whichaccountformost oftheurbanlandscapeyetremainconspicuouslyuntouched.Theomissionistheproductofapoliticalbargainthat sayssprawlcansprawlanddowntownscanrisebutsingle-familyneighborhoodsaresealedofffromgrowthbythe cudgelofzoningrulesthatdictatewhatcanbebuiltwhere.Thedealisalmostneverstatedsoplainly,butitisthe foundationoflocalpoliticsinvirtuallyeveryU.S.cityandcutstothecoreofthecountry’sdeepestclassandracial conflicts.
Andnowit’sbeingtornup.Theloudestripcamelastmonthwhen,twodaysaftersurvivingaCaliforniarecallelection, Gov.GavinNewsomsignedSenateBill9.Bylegalizingduplexesstatewideandallowingpeopletosubdividesinglefamilylots,S.B.9effectivelyendedsingle-familyzoninginastateof40millionwhoseidentityispredicatedonthe suburbanidyll.
Butthatwasjustthelatestinayearslongeffort—onemirroringeffortsaroundthecountry—thatusheredindozens ofstatehousinglawsthatstreamlineconstructionofbackyardunits,requirecitiestoplanforhigher-density developmentandstripthemofpoweriftheyfailtocomply.
WhenyouaddS.B.9toearlierrulesforbackyardunits,Californiahaspavedthewayforsome2.5millionnewhousing units—about25years’worthatthestate’scurrentpaceofbuilding—inexistingsingle-familyneighborhoods, accordingtoananalysisbytheTernerCenterforHousingInnovationattheUniversityofCalifornia,Berkeley.
“Theselawshaveopenedupentirecommunitiesthathadbeenlargelywalledoff,”saidBenMetcalf,managingdirector oftheTernerCenter.“Evenifitstartsslow,wearesolidlyonapathtoaverydifferentCalifornia.”
Clairemontisatthecenterofthisretrofit.Theneighborhoodisaclassicpost-WorldWarIIsuburbbuiltaroundcurved streetsandstripmalls.Inthe’50sitwaspromotedasahamletoutsidethebustle.Nowitiscentrallylocated,between downtownSanDiegotothesouthandthenorthwardclusterofbiotechnologycompaniesexpandingaroundthe UniversityofCalifornia,SanDiego.Thecityisrecastingtheareaasatransithubwherepeopleliveclosertogetherand commuteviaa$2.1billionexpansionoftheSanDiegoTrolley.
JohnReecewas82andstrickenwithParkinson’sdiseasewhentheCaliforniaLegislaturebeganitshousingpushin 2016.PatriciaReecewasinher40swiththreechildrenandhadreturnedtoBaxterStreetonceagain,thistimefrom Missouri,whereshehadfinallyboughtahomebutwasforeclosedonduringthefinancialcrisis.Shehadadoctorate andwasworkingasapsychologist,butsavingforadownpaymentinSanDiegostillfeltlikeanexerciseinfutility.
WhatwouldtheydowhenMr.Reecepassedon?Thequestionlingeredinthebackgrounduntil2019,whenthe inevitablehappenedandMs.Reeceinheritedtheproperty.Lowonsavingsandheavyonstudentloans,shedidwhat middle-classCaliforniansdowhentheywantabiggerhomeandneedtopaydowndebt:Shesoldherparents’house andmovedtoTexas.
“Icouldgetmoneyunderneathmybeltsothatmykidscouldgettheireducationsunderneaththeirbelts,”Ms.Reece said.“InCalifornia,wecouldn’tdoit.”
Ayearlater,5120BaxterpassedtoalimitedliabilitycompanyoperatedbyChristianSpicer,alongtimehome-flipper lookingtogetinonthebackyardboom.
TheBloodyShirt
ChristianSpicer,34,beganhisrealestatecareerinthethroesoftheGreatRecession,whenmillionsoffamilieswere beingforeclosedonandinvestorswerebuyinghomesoncourthousesteps.Hewastheguywhoshowedupatpeople’s doorstotellthem,inthenicestwaypossible,thattheirpropertybelongedtosomeoneelseandthattheyhadtowork outarentalagreementorfindanotherplacetolive.
Mr.Spicerisamellowpresencewhospeaksinavoicethatcouldgethimcastinamovieaboutpeoplewholiketoget highandsurf(“I’mdefinitelyonthechillvibeofthings”).Butheisalso6-foot-3and250pounds.Thehomebuyershe workedforduringtherecessionthoughtthismadehimagoodcandidateforhousecalls—incaseanyonegotmad, whichofcoursepeopleoftendid.Mostofthetimethismanifestedinaprofaneversionofthewords“screwyou,”but oncesomeonestabbedhiminthearmwithapen.Hewenttohisnextappointmentinabloodyshirt.
“Itdidn’tfeelgreat,”Mr.Spicersaidofthejob.“ThefunpartwasnowIgottogoinandturntheunit.Igottodecidethe colorofthecabinetsandcleanitup,puttheflooringin,andI’dhavethisproductIwasproudtogoandlease.”
Hisprofessionallifehaseversincebeendictatedbyacoldcalculationofwhichsortsofpropertiesaregeneratingthe bestreturnsforhisinvestors.Hewaspartofthenationalfrenzytoturnforeclosuresintosingle-familyrentals.After thehousingbust,whentheeconomyandtherealestatebusinessimproved,heshiftedtowardhouseflipsand“valueadd”apartmentdeals,aeuphemismforbuyingarun-downcomplex,clearingoutthetenants,thenrenovatingand raisingtherent.
ChristianSpicerdiscoveredaccessorydwellingunitsafterafortuitousencounterwithacityinspector,anditledtoanewlineofbusiness. SandyHuffaker forTheNewYorkTimesIt’sanequationofriskversusprofit:Inaworldinwhichtheneedforhousingishighbutit’shardtobuild,upscaling propertiesisasaferwaytomakemoneythantryingtodevelopnewones.
Mr.Spicerdiscoveredbackyardunitsafteraserendipitousencounterwithacityinspector.Theinspectorcamebyto checktheelectricalworkatahousehewasrenovating(andplannedtoflip),thenbustedhimfortearingoutthe kitchenwithoutapermit.Mr.Spicerhadtopayayearofextramortgagepaymentswhiletheworkwasstalledforcity approval.Duringthewait,adrafterhehadhiredsuggestedthatheconvertthedetachedgarageintoaseparateunit, whichwouldincreasethepurchaseprice.
Itwassoeasytobuildandthepermittingsofast,Mr.Spicersaid,hefollowedthereturnstoanewlineofbusiness. Now,forthefirsttimeinhiscareer,heistryingtomakemoneybybuildingnewhousinginsteadofbymakingexisting housingmoreexpensive.
DeliveringApartmentsonaTruck
Duringavisittosomeofhisprojects,Mr.SpicerdrovearoundtowninadustyblackTeslathathaduncashedchecks scatteredaroundthecenterconsole.DressedinshortsandaT-shirt,heplayedaversionofanHGTVhost,takingme throughrecentlypurchasedhousesandusingamixofimaginationandfingerpointstoexplainhow,withawallhere anddoorthereandtwounitsbackthere,therentalvaluecouldbemultipliedseveraltimesover.
Insteadofhuntingforeasyhouseflips,Mr.Spicersaid,he’sonthelookoutforhomesonabnormallylargelotswitha flat,neglectedyardthatisprimedtostartbuildingon.Anythingwithapoolisoutofthequestion,hesaid.Ahomewith anelaborategardencanworkbutcostsextratoripout.
“Ifit’salldirtbackthere,that’sthegoldenticket,”hesaid.
Mr.Spicer’sturnoffortunewasabyproductofCalifornia’seffortstofillitshousingshortage.Overthepastfiveyears theLegislaturehaspassedahalf-dozenlawsthatmakeitvastlyeasiertobuildaccessorydwellingunits(A.D.U.s)—a catchalltermforhomesthataremorecolloquiallyknownasin-lawunitsandgrannyflats.
Citieshavelostmostoftheirpowertopreventbackyardunitsfrombeingbuilt,andstatelegislatorshavetriedtospeed constructionbyreducingdevelopmentfees,requiringcitiestopermitthemwithinafewweeksandprohibitinglocal governmentsfromrequiringdedicatedparkingspots.IncontrasttothebattlesoverS.B.9—thisyear’sduplexlaw, whichwasbrandedabillof“chaos”thatwould“destroyneighborhoods”andbe“thebeginningoftheendof homeownershipinCalifornia”—theA.D.U.lawspassedwithnocomparablecontroversy.
“‘Grannyunits’doesn’tsoundintimidating,”saidBobWieckowski,astatesenatorfromtheBayAreacityofFremont, whohaspassedthreeA.D.U.billssince2016.
Lastyear,SanDiego’sCityCouncilvotedunanimouslytoexpandonstatelawbyallowingbonusunits,sometimesas manyasahalf-dozenperlot,ifaportionaresetasideformoderate-incomehouseholds.Developmenthasexplodedon cue.
Californiacitiesissuedabout13,000permitsforaccessoryunitsin2020,whichisalittleover10percentofthestate’s newhousingstockandupfromlessthan1percenteightyearsago.TheeffectisalreadyvisiblethroughoutSouthern California:four-unitbuildingsrisingbehindone-storybungalows;prefabricatedstudioapartmentsbeinghoistedinto backyardsviacrane;blockswhereanewfront-yardapartmentsitsacrossthestreetfromanewbackyardapartment downthewayfromanewside-yardapartment.
Inresponsetothenewlegislation,entrepreneurshavestartedahostofcompaniesthatspecializeinhelpingpeople plan,designandbuildbackyardunitsandthecomingwaveofduplexes.Venturecapitalistshaveputhundredsof millionsofdollarsintostart-upslikeAbodu,whichisbasedinRedwoodCity,Calif.,andbuildsbackyardunitsina factory,thendeliversthemonatruck.Untilrecently,theirbusinesswasdrivenbyhomeownersbuildingA.D.U.son theirproperty.ButoverthepastyeartherehasbeenasurgeininterestfromupstartdeveloperslikeMr.Spicer, accordingtointerviewswithplanners,lendersandcontractors.
ScrawledacrossawhiteboardinMr.Spicer’soffice,justpastthreeRedBull-quaffingemployeeswhositinfrontof double-screencomputerssearchingforpropertyandmanagingrenovations,wasalistof32newunitsthatwere finishedorbeingworkedon.That’stheequivalentofamidsizeapartmentbuilding.Exceptunlikeamidsizeapartment building,whichcouldtakeyearsofpermittingandenvironmentalreviewsbeforeconstructionevenstarted,Mr. Spicer’sprojectsrequireabouttheamountofbureaucracyofakitchenandbathremodel.
Hiscompanybought5120BaxterStreetfor$700,000.Heestimatesthehousewouldrentfor$3,300amonthwithafew renovations.Insteadhespentabout$400,000buildingthenewunitsandsplittingthehouse,andbelieveshewillget between$9,000and$10,000amonthinrentacrosstheproperty.
Thatreturnwouldincreasetheproperty’svaluetoabout$1.7million.Thepricewouldbegallingtoanaspiring homeownerwhomighthaveoutbidanotherfamilybeforelosingtoMr.Spicerandnowfeelscheatedoutofthe Americandream.Butofcoursethe10to12peoplewhomoveinareunlikelytothinktheworldwouldbebetteroffif theirhomeshadremaineddirtandonlyonefamilylivedthere.Housingiscomplicated.
NeighborsforaBetterSanDiego
Nobackyardapartmentbuildings.
Theyardsignshavestartedtoappear.ThisparticularonewasonBuddStreetinClairemontMesa,abouta10-minute drivefromthehouseonBaxterStreet.WhenIarrivedontheblocktoasktheneighborsaboutSanDiego’ssurgein backyardapartments,onediscontentedresidentbecametwoandtwobecameahalf-dozen.SuddenlyIwasina semicircleabsorbingdarkprognosticationsfromhomeownersinshortsandgardeningclothes,alongwitha grandmotherholdingababy.
“Itdoesn’tfit.”“It’saddingpeople.”“Wedon’twantthathere.”“There’sotherplacesforthat.”“Wejustwanttokeepour neighborhoodlikeitis.”“Theywanttopushusoutandtearourhousesdown.”“Parking.”“Parking.”“Parking.”
ThesignsweresuppliedbyNeighborsforaBetterSanDiego,anonprofitthathascalledonthecitytorescindits expandedA.D.U.rules.It’strickypolitics,requiringlegislatorstograpplewiththehousingcrisisbyplanningformore unitswhilealsodealingwithblowbackfromtheconstituentswhovotefortheminthepresent.
Tryingtothreadthisline,SeanElo-Rivera,a38-year-oldSanDiegocouncilman,recentlyintroducedaseriesof proposalsthatwouldlevyinfrastructurefeesonA.D.U.developerslikeMr.Spicer,limithowmuchon-streetparking theirresidentscoulduse,andlowertheincomethresholdthatdevelopersneededtomeettoqualifyforthecity’s densitybonusprogram.Butduringawalkaroundhisneighborhoodhereiteratedhissupportforhigherdensityand illustratedthisfactbystoppinginfrontofasix-unitapartmentbuildingonastreetofsingle-familyhouses.
Alawnsignopposingadditionaldwellingunitsintheneighborhood. SandyHuffakerforTheNewYorkTimes“Thisisthenightmarescenarioforalotofthemorevocalopponents,”hesaid.
Henotedthebuildingwaswherehelivedinaone-bedroomwithhiswife.
Housingpoliticsarenonpartisan:ThetermNIMBY,shortfor“notinmybackyard,”appliestoDemocratsaswellas Republicans.InterviewswithmorethanadozenA.D.U.opponentsthroughoutthecityreturnedanideologically scatteredmixofcomplaintswithacrosscurrentofmotivations.
Theydon’twantlow-incomehousingintheirneighborhoodandalsowantnewunitstobemoreaffordable.Somewant backyardstoremainopen.OthersarebuildingA.D.U.sbutthinkaddingmorethanoneunitistoomuch.One complainedaboutAirbnbrentals.AnothercomplainedthatnoisefromaneighboringA.D.U.hadmadeithardertorent hisAirbnb.Theywereferventlyfor,andagainst,theattemptedrecallofGovernorNewsom.
Ifthereisonethingtheyallseemtoagreeon,avillainwhoseactionselicitsomuchragethatitunitesthisdisparate group,it’sthatChristianSpiceristhebadguyhere.
“Mybiggestfearisdevelopersarepricingeverybodyoutofthemarket,”saidPattieEstrada,a59-year-oldcommercial loanprocessor.
Ms.EstradawaspartoftheBuddStreetscrumandhaslivedontheblockfor30years.Aswewalkedawayfromher angryneighbors,shetoldmethatheroldestdaughterlivedinamanufacturedhomewithherhusbandand3-year-old andwantstoupgradetoahouse.Thedaughter’sfamilycan’taffordClairemontwhenhousesaregoingfor$850,000.
AfewdoorsawaystoodahousewithaForSalesign.Ms.Estradapointedtoitandsaidshewantedtohelpher daughterbuyit,butwasworriedaninvestorwouldoutbidthem.Thiswouldbeahugedisappointment,becausethe househadayardwiththepotentialtohelphersolvetwoproblemsatonce.
“Mydaughterwillbe30,andIhaveanotherdaughterwhois21—shestilllivesathome,”Ms.Estradasaid.“I’m thinkingwecandoanA.D.U.backthereforher.Shecanhaveherownlittleplace,too.”
