Affordable Housing and the Coastal Act

The California coast belongs to all the people. So why are coastal communities wealthier and less racially diverse than the rest of the state?  

The coast is a desirable place to live, and developable land is limited, so coastal real estate generally costs more than property further inland. But the extreme wealth and housing gap in the coastal zone has many root causes, starting with over a century of racially exclusionary land use and banking policies that have shaped California’s demographics since statehood. Although outright discrimination is no longer legal, land use patterns were already well established before those practices were outlawed, and little was done to affirmatively reverse the damage. In more recent decades, gentrification has steadily transformed historically diverse, blue-collar communities and erased communities of color in traditionally working-class coastal areas, usually as former industrial areas are cleaned up and redeveloped, or the cost of public services increases.

Historically, restrictive covenants were used in the U.S. real estate market to segregate neighborhoods and restrict people of color from living in certain areas. This example Grant Deed (left image) from Los Angeles highlights a racially motivated restrictive covenant. It specifies: "This property is conveyed subject to the following conditions and covenants: … That said premises shall not be leased, sold, conveyed or rented or occupied by any person other than one of the Caucasian race.”

Restrictions like these effectively excluded people of color from owning or renting property in certain neighborhoods, which has left a lasting effect across many communities in California.

The State of California is experiencing a critical shortage of housing. California has some of the least affordable housing in the United States.

In 2023, the average Fair Market Rent (FMR) for a two-bedroom apartment in California was $2,197. To afford rent and utilities without being cost-burdened, a household needs to earn $7,323 monthly or $87,877 annually. But the median income for renters in California is only $70,299. This means that most California renters are cost burdened.

A household is considered cost burdened if they are spending more than 30 percent of their gross income on housing.

Finding housing in California is most difficult for lower income households. Over 1.3 million low-income households do not have access to an affordable home.

And 79% of low-income households are paying more than half of their income toward housing.

The burden of unaffordable housing is not felt equally across households, even when household income is considered. Households of color are more likely to be cost burdened and to face hardships from housing than white households. For example, nearly two-thirds of Black households are cost-burdened, compared to less than half of white households.

The legacy effects of discriminatory land use practices continue to perpetuate racial, socioeconomic, and environmental inequities across California. The practices of redlining, a historic banking practice that barred people of color from receiving mortgages in white neighborhoods, is one example of a land use practice that caused non-white communities to be disproportionally impacted by adverse environmental and health impacts stemming from the intentional siting of hazardous industrial facilities, such as wastewater treatment plants, oil and gas refineries, and landfills.

In the early 1930s, the  Home Owners' Loan Corporation  (HOLC), a United States government program, created a housing appraisal system of color-coded maps that ranked the riskiness of lending to households in different neighborhoods ranging from “least” to “most risky”. The maps utilized housing and economic metrics, in addition to demographic information to categorize their "creditworthiness." The “most risky” neighborhoods were marked red on these maps and indicated areas where property values were assumed to decrease and, therefore, unworthy of inclusion in the home loan programs. Most of these “redlined” neighborhoods were predominantly inhabited by Black residents. Without the ability to build equity that white homeowners were able to acquire through homeownership and generational wealth, predominantly non-white neighborhoods still often lack access to resources, investment, and decision-making processes. This has been shown to increase their vulnerability to multiple environmental hazards compared to other, better resourced neighborhoods.

In addition to redlining, other discriminatory land use policies led to segregation, disinvestment in and fragmentation of communities of color, and a gap in wealth between white households and households of color that all continue to persist today. For example, after the U.S. Supreme Court banned zoning laws that explicitly prohibited households of color from living in certain areas, many local governments turned to other exclusionary housing policies that did not explicitly discriminate based on race but that were racially motivated and still had that effect. For example, many local governments zoned white neighborhoods to only allow single-family houses on large lots, which restricted the development of multi-family developments and was meant to exclude many households of color.  

At the same time, many local governments designated neighborhoods of color for industrial or commercial uses, which changed the character of these neighborhoods and led to households of color being exposed to higher levels of pollution. Public health research shows a higher rate of reproductive health disorders and respiratory issues resulting from industrial land uses that are sited near low-income communities of color, also known as “environmental justice (EJ) communities.” These practices have also been shown to negatively impact low-income people and communities of color by keeping their children out of the more resourced public schools, which are financed through local property tax dollars.  

The Fair Housing Act of 1968 prohibited housing discrimination based on race, color, national origin, religion, sex, and as later amended, ability or familial status. But this did not reverse the effects of a long legacy of housing discrimination. One hundred years of divestment and discrimination, combined with the current wealth gap and the ongoing housing crisis, continue to make coastal residence unachievable for many Californians of color. Viewed through this historical lens, it becomes evident that there is a direct through-line from the overtly racist policies and actions of the previous century to the modern-day barriers that maintain the status quo. 

To learn more about the nexus between affordable housing, environmental justice, and historic housing inequities, check out the  Report on the Historical Roots of Housing Inequity and Impacts on Coastal Zone Demographic Patterns . 

The Coastal Act of 1976 originally contained policies intended to promote more equitable coastal communities. Along with policies to protect natural resources, water quality and public access, the Coastal Act also included the legal charge to protect and provide for “housing opportunities for persons of low and moderate income.” The drafters understood that balancing housing with resource protection was “essential to the economic and social well-being of the people of this state and especially to working persons employed within the coastal zone.” (30001 (d)). To learn more about the past and present Coastal Act affordable housing polices and implementation, check out the  Report on Coastal Act Affordable Housing Policies and Implementation  . 

From 1977-1981, the Commission saved approximately 1,100 existing affordable units from demolition, and required the construction of approximately 5,000 affordable, deed-restricted units built alongside new market-rate units. Unfortunately, affordable housing was as controversial then as it is now. In every legislative session over the next four years, there was at least one new bill introduced to repeal the Coastal Act’s affordable housing policy.

In 1980, Senator Henry Mello (D-Monterey) introduced SB 626, the bill that successfully repealed the Commission’s authority over affordable housing. It expressly allowed the demolition of existing affordable housing in the coastal zone. Replacement units were required only if “feasible,” as far as 3 miles inland of the coastal zone boundary and up to 3 years after the new development was built.  SB 626 also amended the Coastal Act to prohibit the Commission from requiring local governments to include housing policies or programs in their  Local Coastal Programs  (LCPs), and it also allowed developers with approved coastal permits to build their projects without the affordable units required by the Commission. As a result, only about 1,500 of the 5,000 affordable deed-restricted units required by the Commission were ever built.

SB 626 has made it more difficult to protect existing affordable housing in the coastal zone. The Commission has supported several bills that would have reinstated the Commission’s affordable housing policy, but so far none have been successful. Nevertheless, the Commission remains committed to affordable housing, and has found other ways to protect and encourage it.

For instance, the Commission has never denied a 100% affordable housing project, has approved multitudes of mixed-rate housing projects, and continues to certify LCP policies promoting affordable housing, density bonuses, accessory dwelling units (ADUs) and other types of flexible design standards that provide “affordable by design” housing stock. The Commission has also relied on the “community character” policy in the Coastal Act to push back on gentrification in some areas, denying requests to demolish older, smaller duplexes and triplexes to build large single-family homes.

In addition to Coastal Act requirements, the Coastal Commission, like all state and local governments in California, has a duty to affirmatively further fair housing.  Government Code Section 8899.50  requires every public agency to administer its “programs and activities relating to housing and community development in a manner to affirmatively furthers fair housing, and take no action that is materially inconsistent with its obligation to affirmatively further fair housing.” This means that the Coastal Commission and local governments in the coastal zone must do more than just refrain from discrimination—they must take meaningful actions that, taken together, address significant disparities in housing needs and in access to opportunity, replace segregated living patterns with truly integrated and balanced living patterns, transform racially and ethnically concentrated areas of poverty into areas of opportunity, and foster and maintain compliance with civil rights and fair housing laws.

In 2019, the Coastal Commission unanimously adopted its first  Environmental Justice Policy  to provide guidance for Commissioners, staff, and the public on how the Commission will implement its environmental justice authority and integrate the principles of environmental justice, equality, and social equity into all aspects of the Commission’s program and operations. For more information about the Commission’s Environmental Justice Policy, check out this  webpage .

Fortunately, public resistance to affordable housing is beginning to change. An emerging social consensus recognizes that in order to sustain vibrant communities and functioning local economies, cities and counties need a range of housing options so that more people can afford to live in the communities where they work. The Legislature has passed more than 125 housing laws in the last five years, and some of them are beginning to deliver results. Many of these laws have increased incentives to encourage developers to build more affordable housing within market rate units. Others have restricted or eliminated local governments’ ability to deny or modify proposed housing projects. Some have overridden local planning standards to accommodate greater density. It will be important to monitor new construction in the coastal zone and develop reliable data to analyze effectiveness.

In the meantime, opportunities to increase the amount of affordable housing in the coastal zone remain. Because housing disparity in the coastal zone has been exacerbated by decades of intentionally exclusionary land use policies, disinvestment, and gentrification, a truly equitable approach to the coastal housing crisis will require the state to take action to correct the imbalance and injustices. The Coastal Act can and should be used as an instrument for achieving this goal, but solving this complex problem will require multiple approaches, including incentives, investments, and other types of regulatory support.

• Gochfeld, Michael, and Joanna Burger. “Disproportionate exposures in environmental justice and other populations: the importance of outliers.” American journal of public health vol. 101 Suppl 1, Suppl 1 (2011): S53-63. doi:10.2105/AJPH.2011.300121.  

• Swope, C.B., Hernández, D. & Cushing, L.J. “The Relationship of Historical Redlining with Present-Day Neighborhood Environmental and Health Outcomes: A Scoping Review and Conceptual Model”. J Urban Health 99, 959–983 (2022).  https://doi.org/10.1007/s11524-022-00665-z . 

• Taylor, Dorceta E. Toxic Communities: Environmental Racism, Industrial Pollution, and Residential Mobility. NYU Press, 2014.  http://www.jstor.org/stable/j.ctt9qg1v9 .