This year is shaping up to be transformative for housing affordability in California, marked with a record proposed Governor’s budget, an influx of new housing and homelessness dollars from the November 2018 ballot, and an ambitious legislative agenda. Amongst this ambitious agenda are Senate Bill 50, introduced by Senator Wiener, and Assembly Bill 11, introduced by Assemblymember David Chiu. Both bills aim to address the housing shortage and spur new construction in the State. Housing underproduction is the leading cause of the affordability crisis in California, and the bills hope to counter that effect. Governor Newsome has set a goal of building 3.5 million new residential units by 2025, and legislators hope that this will fill some of that gap.
SB 50, the More HOMES Act of 2019, focuses on increasing housing opportunities near public transit. This entails upzoning, or allowing taller apartments, within a certain radius of a transit station: ½ mile for rail transit stations and ¼ mile for high-frequency bus stops. The bill also includes upzoning for “job-rich” neighborhoods, as more housing in these areas will reduce reliance on public or solo transit in general. The upzoning would allow for four- or five-story residential buildings, often without parking, in areas that have traditionally housed lower-rise residences. Developments are still required to meet state- and local-level affordability requirements, including any inclusionary zoning ordinances. This ensures that both affordable and market-rate housing is developed under this program.
These requirements would act as minimums for local governments – while they are able to zone up from these requirements, they cannot reduce the zoning. This is important in the numerous cities throughout that have historically fought against increased density. SB 50 does maintain a level of local control, though. The bill maintains the local jurisdiction’s right to restrict demolition of existing housing, their affordable housing policy (if more restrictive than the state’s), their height limits in areas further from transit, and any local incentive for transit-oriented development. It also creates a delayed implementation for sensitive communities, or areas at higher risk of gentrification and resident displacement. These communities can delay the upzoning by five years and utilize that time for a community-led planning process.
AB 11, the Community Redevelopment Law of 2019, reintroduces redevelopment in California. Redevelopment Agencies (RDAs) were shut down in 2011 by then-Governor Jerry Brown. RDAs aimed to combat blight and develop new residential and commercial space through tax increment financing, a process in which the RDAs issued debt and then paid of the debt through property-tax revenue increases. RDAs received strong criticism for their inefficient and irresponsible use of tax dollars and eminent domain during the Great Recession.
The new law implements new agencies that would utilize tax-increment financing, but it further prioritizes affordable housing by mandating that 1/3 of the program’s money is invested in affordable housing projects. It also creates an oversight governing board and puts further restrictions on the agency’s power in place.
The legislators’ efforts are coupled with Governor Newsom’s prioritization of housing and homelessness. In his State of the State remarks in mid-February, the Governor announced he was investing $500 million into new funding for homeless navigation centers, as well as appointing a new Commission on Homelessness and Supportive Housing. Additionally, the Governor noted the need for more stable rental rates and promised to sign a reasonable rent stabilization package if legislators passed one. Together, the Governor and legislators could make a dent in housing affordability and push the state closer to the Governor’s vision – a “California for All.”