Exploring the Changing Faces of Housing Development and Demand in California: Millennials, Casitas, and Reducing VMT

Changes are coming to housing development and demand in California. The state’s sprawling development patterns have come under increasing scrutiny as the state struggles to reduce its greenhouse gas emissions, abate a decades-long housing supply and affordability crisis, and meet the needs of the largest generation in American history – the millennials (Generation Y). In this dissertation, I explore three ways in which residential development and demand in California could change going forward. In my first study (Chapter 2 of this dissertation), I investigate how an upcoming change in California’s project-level environmental review law (the California Environmental Quality Act or CEQA) could affect the approval process for urban development. The state recently mandated that local, regional, and state agencies must replace “level of service” (LOS) with vehicle miles traveled (VMT) as the primary measure – and basis for mitigation – of transportation impacts under CEQA by July 1, 2020. I use a historical counterfactual approach to assess how replacing LOS with VMT could have impacted the approval process for 153 land development projects over 16 years in the City of Los Angeles. I find that most projects could have qualified for at least some environmental review streamlining under the VMT-based framework recommended by the state, including over 75 percent of residential-containing projects. My results suggest that swapping LOS for VMT could reduce the environmental review burden for development in urban areas and provide some of the approval process streamlining necessary to increase housing production in California. And because the streamlined development would be in areas characterized by lower VMT per capita than the regional average, it would likely contribute to reducing VMT per capita in line with state targets. In my second study (Chapter 3 of this dissertation), I look at accessory dwelling units (ADUs). How much ADUs can help with California’s housing supply and affordability crises depends on the homeowners who do not yet own one – their willingness and ability to build an ADU will determine the ceiling for ADU construction. I use a survey of 502 single-family homeowners in the Sacramento metropolitan area to investigate homeowners’ willingness to consider building an ADU, and the motivations and barriers they face. I find that as many as 54.1% of Sacramento city single-family detached homeowners could either have an ADU or be open to creating one. Familiarity with ADUs has the strongest association with openness to building an ADU in my logistic regression model. And homeowners’ top-ranked motivation for creating an ADU is housing family or friends. Cost-related concerns ranked as the biggest obstacles to creating an ADU, followed by permitting and regulatory issues. My findings suggest that ADUs have significant potential to help California close its housing supply gap. In my third study (Chapter 4 of this dissertation), I explore how millennials – people born between 1982 and 2000 – choose where to live. Surveys suggest that millennials have a stronger preference than previous generations for urban amenities. But studies also indicate that most millennials will eventually settle in a suburb. That raises big questions for urban planners and policymakers, as well as for the future of sustainable urbanism. If most millennials will end up suburbanizing, what happens to their erstwhile preferences for urban amenities? Do they seek out suburban neighborhoods with urban amenities? Do their preferences simply change with time and major life events? I use in-depth interviews of 20 households who recently purchased homes in the San Francisco Bay Area to explore how millennials choose where to live when they reach the life cycle stages typically associated with bigger homes in suburban areas. I find that life cycle effects emerged in different ways for the households I interviewed. As they partnered and began having or thinking about having children, most households suburbanized or planned to suburbanize in the future. The households still valued urban amenities, but they generally did not prioritize urban amenities when searching for their suburban homes, with one exception – proximity to commuter transit.