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Solimar Research

Package of Housing Bills Heads to Governor (Updated)

Josh Stephens on
Sep 15, 2017
Update: In a single singing session, Gov. Jerry Brown approved 15 new laws aimed at increasing production of housing, including market-rate and affordable, across the state. The laws address housing from a variety of angles, from funding to zoning to the state's authority to track and oversee local housing production. 

After weeks of anticipation and intra-chamber lobbying in Sacramento, a suite of bills aimed at alleviating California’s housing crisis passed the Assembly yesterday. The bills, which were presented as a package, include both funding and regulatory changes to encourage the production of both market rate and subsidized housing to help make up for the state’s estimated annual deficit of 90,000 homes and a total deficit of 1.5 million affordable units. 

The bills, whittled down from 130 housing-related bills introduced at the beginning of the legislative session, include the following: 

SB 2 “The Building Homes and Jobs Act”: Places a $75 fee on all mortgage refinances and other real estate transactions, aside from sales of homes and commercial properties. The measure is expected to raise $250 million annually and will be dedicated to subsidized low-income housing. 

SB 3 Veterans and Affordable Housing Bond Act: Places a $4 billion bond to finance affordable housing on the 2018 statewide ballot. 

SB 35 Planning and Zoning: Affordable Housing: Streamlined Approval Process: Requires cities to streamline certain approvals, and limit certain types of review, for housing developments that conform with cities’ existing zoning regulations. It also includes requirements to compel cities to meet their respective Regional Housing Needs Allocations. 

SB 166 Residential Density and Affordability: Amends California’s existing “No Net Loss” zoning law, ensuring that cities maintain an ongoing supply of identified sites for housing construction at each income level. For instance, if a city rezones a parcel from residential to commercial, it must add residential zoning elsewhere. 
SB 167 Housing Accountability Act: Complements SB 166 by strengthening the state’s existing Housing Accountability Act, which limits a local entity’s ability to stall a housing project that otherwise satisfies city planning and zoning requirements.

SB 540 Workforce Housing Opportunity Zone: Authorizes local agency to establish "Opportunity Zones" by preparing an EIR and adopting a specific plan that meets specific requirements. The local agency would be prohibited from denying a development proposal within the area that meets certain criteria. Environmental review would not be required for qualifying housing developments and the agency would have to approve, or disapprove, the project within 60 days.

AB 72 (Santiago) Attorney General: Enforcement of Housing:
Provides the Department of Housing and Community Development broad new authority to review any action by a city or county that it determines is inconsistent with an adopted housing element. 

AB 73 Housing Sustainability Districts: Allows a city or county to create a housing sustainability district to complete upfront zoning and environmental review in order to receive incentive payments for development projects that are consistent with the district's ordinance.

AB 879 Planning and Zoning: Housing Element: Requires the California Department of Housing and Community Development to undertake a study to make recommendations regarding potential amendments to the Mitigation Fee Act to substantially reduce fees for residential development. 

AB 1397 Housing Element: Inventory of Land for Residential Development: Requires lands in a city’s housing element to include vacant sites and sites that have “realistic and demonstrated potential” for redevelopment to meet a portion of the locality’s housing need for a designated income level.

AB 1505 Land Use: Zoning Regulations: Would allow local governments the opportunity to create inclusionary zoning ordinances, which could require market-rate housing developers to provide up to 15% of rental homes in their developments at a below-market rate without the requirement for state government oversight.

AB 1515 Housing Accountability Act: Allows a court to determine whether a project is consistent with local zoning and general plan by selecting the substantial evidence it wishes to rely on rather than reviewing whether the city council relied upon substantial evidence. 

Among the bills, SB 2 was arguably the most contentious. Because it imposes a fee, it required a two-thirds majority. With two Democrats holding out, the bill’s backers sought support from Republicans and eventually got a vote from Brian Maienschein of San Diego. The bills received widespread support from housing advocates. The League of Cities did not support the regulatory bills, out of concern that they constrain cities’ local control, but did support the funding measures. 

Though the two funding measures, SB 2 and SB 3, have received the most attention in mainstream press, the other bills — dealing with zoning and approvals — are most likely to affect planners. 

The Construction Industry Research Board estimates that the legislation could spur construction of an additional 14,000 units per year, over the anemic 100,000 currently being produced. That still puts the state well short of its needs. 

“Today we took a step toward addressing a housing crisis that has been plaguing California for years. The package of bills we approved today addresses funding, project streamlining, stricter enforcement, and real accountability – all the affordable housing elements necessary to help more Californians pay the rent or buy a house," said Assembly Speaker Anthony Rendon in a statement. This isn’t a package built of straw or twigs – this package is brick solid."

The bills face votes in the Senate today, though previous versions have already passed and today’s votes are considered relatively perfunctory. Gov. Jerry Brown has indicated that he supports SB 2 and SB 35, and is expected to sign the other bills as well. 
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