A small community of tract homes in Signal Hill Thursday, April 28, 2022. Photo by Brandon Richardson.

Long Beach, along with so many other cities across the state, faces a tough task in addressing its housing needs.

The city has won state approval for its 2021-2029 Housing Element, a document that lays out where new housing can be built. In Long Beach’s case, the city had to show how it would make room for 26,502 more housing units over those eight years.

It’s an important process, and the state has cracked down on cities for failing to comply, as officials and experts agree that significantly ramping up the housing supply is the only way to address the affordability crisis.

Looking at Long Beach’s Housing Element, though, it struck me how nearly all of the zoning changes the city has proposed are to allow for more multifamily housing to meet the need. Of course, it makes sense—there’s essentially no land left in the city to build new single-family homes. But the development of more than 20,000 new multifamily units by 2030 would mark a significant shift in the balance of the city’s housing stock.

I reached out to some local real estate experts to try to make sense of all this—and what it will mean for the value of Long Beach housing in the long term.

Edward Coulson, the research director for the University of California Irvine’s Center for Real Estate, said a heightened supply of multifamily housing specifically could mean even higher values for single-family homes.

“Some people are only going to want single-family property, and to the extent that demand is going to increase over time and supply is not, that’s going to put even more pressure on single-family houses,” Coulson told me. “It has struck me as being kind of an ironic thing—even as we solve the affordability problem, we’re probably making single-family less affordable because we’re not doing that kind of development in the places that people want to live.”

And it’s still an open question whether most existing single-family neighborhoods in Long Beach will, in the long term, maintain the character that has historically made them so desirable.

“Multifamily has a tendency to affect the single-family home values, but that’s kind of dependent on whether it’s being built in your neighborhood or not,” said Rick Payne, a professor in Long Beach City College’s real estate program. “If there’s new multifamily housing, there’s a tendency to create more people in the same area, more traffic, and so it can have somewhat of a sobering effect on single-family pricing.”

Efforts at the state level to allow for more development on single-family lots, like Senate Bills 9 and 10 that Gov. Gavin Newsom signed into law last year, will also have impacts of their own. SB 9 allows for the construction of duplexes on single-family lots and for single-family lots to be split in two. SB 10 gave cities new authority to upzone near job centers and transit lines.

And while Long Beach officials, including Mayor Robert Garcia, have expressed a desire to focus new development in areas like Downtown rather than change the character of single-family neighborhoods, plenty of property owners are still going to take advantage of more relaxed rules that allow them to generate more income by converting a house into a duplex or building a backyard granny flat.

Still, Richard Green, the director of the USC Lusk Center for Real Estate, is unconvinced that these types of laws will have a widespread impact in most neighborhoods, at least in the short term.

“I don’t think you’re going to see much of an immediate impact, because in order to tear down a single-family house and replace it with a duplex, the land underneath the single-family house has to be more valuable than the land and the house together,” Green told me. “I would guess that the impact of SB 9 will be very slow.”

But given the current trajectory of housing policy, Green said it’s likely that more aggressive laws will be passed over the next 20 years that could have a larger impact on single-family neighborhoods.

“But I think that’s a good thing,” he said, “because we need the new units.”

For the time being, though, it seems Long Beach officials are intent on allowing more development in areas that are already dense, rather than spreading out new housing evenly across the city.

An earlier draft of the city’s Housing Element, in fact, was rejected by the state because it lacked sufficient new housing in “high resource” areas like East Long Beach.

The document the state ultimately approved still includes very little new housing in East Long Beach relative to the rest of the city, but the newly proposed conversion of certain parcels—like the Marina Shores retail center near Seal Beach—from commercial to multifamily residential use was enough to satisfy state officials.

Based on that process, it appears Long Beach officials would rather reimagine existing commercial areas to include residential uses than build up its low-density neighborhoods.

The strategy would seemingly offer a win on two fronts: Single-family neighborhoods can largely maintain their character, and more construction in high-density areas could help bring down housing prices overall.

If Coulson’s analysis is correct, though, single-family homes in particular may become less and less accessible.

Because of that, Coulson told me it’s likely the concessions so many people are already making—moving farther inland, say, for more space at a lower cost—are here to stay, no matter how much Long Beach builds.

“We can’t satisfy everybody’s demand for everybody’s housing at affordable levels everywhere,” he said. “There will always be a tradeoff between location, prices and the types of housing that people want to live in.”

Hayley Munguia

Hayley Munguia is editor of the Long Beach Business Journal.