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CP&DR News Briefs June 26, 2019: Google Housing Investment; Wiener's Gut-and-Amend; Wildfires & Development; and More

Brett Simpson on
Jun 24, 2019
Google to Invest $1 Billion in Bay Area Housing 
Google pledged $1 billion to create 20,000 new homes in the Bay Area – in an unprecedented move to solve the housing crisis that many believe it helped cause. In a recent blog post, Google CEO Sundar Pichai announced that these funds will target three major investments: first, it will repurpose over $750 million of its own land to build 15,000 units of housing “for all income levels”. Second, Google plans to create a $250 million fund to incentivize developers to build 5,000 units region wide. Finally, it is setting aside $50 million toward solving homelessness and displacement. This announcement comes amid backlash against the company for its major development plans near Diridon Station in downtown San Jose – which a recent report shows will cause major rent spikes throughout the region. The move also follows the example of tech giant Amazon, which similarly pledged funds to support affordable housing in Seattle. “As we work to build a more helpful Google, we know our responsibility to help starts at home,” Pichai wrote in his post. “For us, that means being a good neighbor in the place where it all began over 20 years ago: the San Francisco Bay Area.” 

Wiener Introduces Gut-and-Amend Housing Streamlining Bill
With Senate Bill 50 on suspense for the remainder of the legislative season, Sen. Scott Wiener introduced a new housing bill through the gut-and-amend process. SB 592, The Housing Accountability Act, is designed to streamline housing approvals by complementing the Permit Streamlining Act. It would "provide that the [Streamlining Act] applies to any form of land use decision by a local agency, including a ministerial or use by right decision and a discretionary approval” to prevent local agencies from unduly delaying approvals of certain housing developments. It also includes provisions to prevent local agencies from requiring lower densities than existing plans and zoning allow for. Critics have referred to SB 592 as a partial resurrection of SB 50 and have criticized the use of the gut-and-amend tactic (the original SB 592 referred to cosmetology). SB 50 referred largely to density increases, especially around transit; SB 592 makes no such references. (See prior CP&DR coverage.) 

Poll Finds Opposition to Building in Wildfire Zones 
Three-quarters of Californians support restricted development wildfire zones, a recent survey found. The poll, conducted by the UC Berkeley Center for Government Studies on behalf of the Los Angeles Times, shows broad bipartisan support for imposing state-wide limits on new housing development in high-risk wildfire areas. According to its findings, at least 66 percent of respondents in every region of the state back the idea – enough to approve a bill on the issue. Still, it’s not clear what such legislation would look like, or how it would reconcile with the statewide affordable housing crisis: a recent Cal Fire report said that one in four Californians live in areas considered high-risk for fires. Last year, the recently-retired head of California’s Department Forestry and Fire Protection stated that the government should stop building in high-risk areas. However, Governor Gavin Newsom publicly rejected this suggestion, and instead has focused on public utility companies’ financial responsibility for past fires and future fire safety. "There's something that is truly Californian about the wilderness and the wild and pioneering spirit," Newsom said in an interview with the Associated Press. "I'm not advocating for no building.”

Report: Cities Failing to Provide Affordable Housing 
Major California cities are falling far short of affordable housing demand, according to a new report by nonprofit California Housing Partnership. Most accepted measures consider a home “affordable" when it costs no more than 30 percent of a household’s gross income. Notably, the report found that fewer than a third of low-income families in Southern California have access to affordable housing – amounting to a shortfall of nearly 759,000 available low-income units. These findings point to twin issues statewide: limited housing drives up livings costs, and wage gaps drive down residents’ ability to afford housing. For example, Sacramento County has a shortfall of 63,000 affordable units, which has caused the average rent for a two-bedroom apartment to jump from $950 a month to $1445 a month over just two years. Similarly, according to the report, in L.A. County, the minimum income needed is over $8,200 a month to afford the mid-priced asking rent of $2,471. For this reason, the biggest impact of these shortages fall on the state's poorest renters. The report urged the state to replace the redevelopment funding slashed in 2012, and called for expanding the affordable housing tax credit program by $500 million a year. It also urged cities and counties to adopt rent caps and tenant protections while also granting developers density bonuses to incentivize new housing construction.

California Leads Nation in Rental Rates 
Nine out of ten of the nation’s most expensive counties for renters are in California, and seven are in the Bay Area, according to a recent report. The National Low Income Housing Coalition’s “Out of Reach” report measured the “fair market rent” for jurisdictions across the nation, or how much a family relocating today can expect to pay for a modest rental home and utilities. Using this number, the researchers determined a resident’s minimum possible salary to afford a home without spending more than 30 percent of their income on housing. The report found that in the nation’s three least affordable counties – Bay Area counties San Francisco, San Mateo, and Marin – you have to make $127,000 a year to afford to rent a modest two-bedroom home. Also topping the rankings were Bay Area counties Santa Clara, Alameda, Contra Costa, and Santa Cruz. By comparison, the average Californian has to make $72,165 to afford a similar home; and the average American has to make only $47,756. “On the one hand, it’s shocking,” said Amie Fishman, executive director of the Non-Profit Housing Association of California, according to Mercury News. “And on one hand it’s affirming of the reality that Bay Area residents and Californians are seeing every day."

Quick Hits & Updates

The Coastal Commission fined the Ritz-Carlton Hotel in Half Moon Bay $1.6 million for blocking public access to beaches. According to California law, all beaches are open to the public. However, the commission found that the hotel – which charges $1,000 a room – failed to provide adequate signage and parking to direct the public toward its beach. This is the second-largest fine in the history of the commission.$1 million of the fine will go toward a fund for signs, trails, and stairs near beaches. The remaining $600,000 will go toward helping a land conservation group purchase property north of the hotel.

San Francisco median rent listings have reached an all-time high, according to a Curbed SF analysis of five popular rental platforms. The analysis, which examines the cost of a single bedroom apartment on Zumper, Rent Jungle, Apartment List, Rent Cafe, and Adobo since 2014, found median rents uniformly over $3,500 and as high as $3,777. The numbers differ from U.S. Census Bureau estimates, as they do not include rent-controlled units or older homes that do not appear on apartment listing sites.

Google’s San Jose campus will need to include thousands of affordable homes to avoid causing extreme rent spikes, according to a recent economic analysis. Last December, Google bought $110 million of public land from San Jose and plans to create office space and housing for 20,000 new tech employees and 8,000 service workers. San Jose nonprofit Working Partnerships USA found that unless Google builds 5,000 new affordable homes and more than 12,000 market-rate homes, it will cause one of the most expensive areas in the nation to get even less affordable. (See prior CP&DR coverage.) 

Housing costs in Riverside and San Bernardino counties were up 4.3 percent in May, outpacing the local 2.9 percent inflation rate, according to the latest regional Consumer Price Index data. This new bimonthly data from the Bureau of Labor Statistics also revealed that the Inland Empire’s average 2019 rent increase of 4.4 percent was fifth-highest among the 23 metro areas tracked by the CPI nationwide.

Stanford University is pushing back against Santa Clara County’s demands to build more housing in its planned expansions, claiming that the county itself has not done enough to fix the region's housing shortage. In a recent letter, the university’s Vice Provost objected to the county’s requirement that Stanford quadruple the amount of on-campus workforce housing, and asks that the county grant it permission to build more off-campus housing. Currently, the county requires that it build 70 percent of new housing on campus. The letter comes ahead of the second hearing on a general use permit for the Stanford expansion, the largest-ever development application in the county.

Weeks after the Mid-Market business tax break officially ended, San Francisco supervisors expressed regrets about the 2011 decision to pass the 1.5 percent payroll tax holiday to companies that moved into Mid-Market buildings. At a recent committee hearing to assess the policy, supervisors agreed that the so-called “Twitter tax break” failed to achieve many of its intended goals, including reducing homelessness, crime, and empty storefronts in the area. The hearing concluded with a caution against future handouts to the tech sector.

California's Congressional delegation introduced a bill to safeguard federal funding for disaster-recovery transportation projects statewide. House Resolution 3193, or the Transportation Emergency Relief Funds Availability Act, is designed to prevent the Trump Administration from targeting disaster-recovery funding. Current regulations allow the federal government to recover such funds if they are not used within two years of being granted.

The Bay Area Measure 3 bridge toll increases were legally approved by voters and thus cannot be overturned, according to a San Francisco judge’s ruling. This is the second such ruling in the past year, after two separate lawsuits were filed against the Metropolitan Transportation Commission to attempt to kill the measure. The measure, approved by voters in 2016 by a 55 percent margin, aims to generate $4.5 billion for mass transit and infrastructure improvements.

The Governor's Office of Planning and Research's Wildfire Commission on Catastrophic Wildfire Cost and Recovery has released an Executive Summary Discussion Draft to the public. The Commission on Catastrophic Wildfire Cost and Recovery was created in 2018 to provide recommendations to the governor and legislature on how to manage the long-term costs and liabilities associated with utility-caused wildfires. The Executive Summary provides an overview of the work of the commission to date, including key findings and recommendations.