Solving California’s Housing Gap Requires Legislation that Respects Local Ordinances

In a state where homeowners make up the lowest percentage of residents since the 1940s and most tenants spend more than 30 percent of their income on rent[1], housing affordability is a matter of statewide concern as documented by more than 100 bills introduced by state legislators last year, 15 of which were signed into law by Gov. Jerry Brown.

These laws include two funding mechanisms. One of the funding bills, SB 2 named the Building Homes and Jobs Act, added a $75 charge to many recordable documents. This year, half of the money raised by the act is earmarked for local planning efforts and the other half of the money is earmarked for assistance to help homeless back into housing and to help those at risk of becoming homeless to stay in their homes.

The other bill, SB 3 named the Veterans and Affordable Housing Bond Act of 2018, goes to voters in November for approval of a $4 billion general obligation bond. Most of the money would serve to subsidize the cost of building higher-density and affordable units and to provide veterans with subsidized home loans. The rest of the money is for a variety of purposes ranging from home-building grants for below-market income families to financing for housing for agricultural workers.

The legislative focus last year and remaining in 2018, was on limiting local oversight of housing proposals and in some cases, even punishing communities that fail to meet new state mandates. This emphasis stymies both local ordinances designed to provide a framework for the look and location of buildings within a community and efforts to build bridges to more affordable housing within communities divided about the effects of allowing more housing.

Three of the new laws, SB 167, AB 678, and AB 1515, add more teeth to the Housing Accountability Act (HAA), which limits the basis on which a jurisdiction can reject a residential development when it is consistent with planning and zoning laws. The revisions include increasing the standard of proof a jurisdiction must meet to justify denial of a project from the former standard of “substantial evidence in the record” to the new standard of “a preponderance of the evidence.” The three bills also include a raft of new remedies for violation of the HAA, including a court order compelling a jurisdiction comply with a developer’s proposal within 60 days of a court’s ruling of failed by a jurisdiction to show by a preponderance of the evidence that a housing project failed to meet minimum requirements. Violations of the 60-day order start at $10,000 per unit and increase to $50,000 per unit for bad faith.

One of the most concerning of the new laws for local jurisdictions is SB 35. The new law allows developers to bypass compliance with the California Environmental Quality Act (CEQA) and other public hearings for housing projects meeting certain affordability criteria in jurisdictions  that have failed to either meet state-mandated housing goals or provide required reports.

The developer may only select a site already zoned by the jurisdiction for the amount of housing proposed, but this puts a virtual freeze on decisions to rezone more land for multifamily housing since the mere act of rezoning the land to multifamily use extinguishes the power of the jurisdiction to weigh in on what the building will look like, its setback from the road and even its height and size.

In most communities, residents fear the effect of any new development, and their say in its look and feel is critical to making such development acceptable.

Stripping a community of that power to require a promenade, a façade that fits the surroundings or to avoid shadowing a beloved park means that jurisdictions must think twice before subjecting land to SB 35 by rezoning it for multifamily use.

While SB 35’s sponsor Scott Wiener (D-San Francisco) posits that such measures are necessary to assure some communities do not “opt out” of meeting state-required housing goals[2], the position oversimplifies the reasons local communities do not meet such mandates.

For instance, local counties and cities have been (rightfully) encouraged to halt sprawl into the hillsides surrounding Contra Costa County and to preserve open space for recreation and wildlife by pointing development inward toward transit and downtowns. This means more traffic has to be accounted for closer to the urban or suburban core.  Most downtowns in Contra Costa County are hemmed in by decades of existing construction and infrastructure like roads, overpasses and utility facilities.  Demolition of existing buildings to make room for new projects is often financially infeasible, particularly in areas where the cost of real estate is extreme as it is in many parts of Contra Costa and its neighboring counties.

One of the bills introduced this year in the current legislative session, AB 2923, proposes as a solution encouraging development of BART parcels but does so again at the expense of local communities by proposing what amounts to a bypass of local planning processes.

The League of California Cities, the advocacy group for California’s city agencies, suggests that legislators consider a broader picture and create more tools for local governments to fund infrastructure and affordable housing. The League suggests these initiatives could include a restored form of redevelopment and a lowering of the threshold for passage of funding measures for investment in infrastructure and affordable housing.

Threads of cooperation weave through several of the bills passed last year and provide an example of the kind of teamwork that the legislature and local communities must build upon to meet common goals. AB 73 allows local jurisdictions to pre-plan neighborhoods in exchange for housing assistance funds. Similarly, SB 540 provides for pre-planning of what are called Workforce Housing Opportunity Zones, which are designed to bring housing and workplaces together close to public transportation. Zoning remains in place for five years after approval of a Workforce Housing Opportunity Zone during which proponents can bring housing projects forward within the zone.

The gap between income and housing costs is unlikely to narrow in this legislative session or next, and a workable solution requires federal, state and local governments to work together to provide housing that enhances affordability while preserving the look and feel of the community not only for existing residents but also for those who intend to move into the new housing and thereupon join the community.

[1] A 2018 Guide to New Housing Law in California, the California League of Cities, file:///H:/CCLawyer/2018/April%202018/Housing-Brochure-Final.pdf
[2] http://sd11.senate.ca.gov/news/20170914-senator-wiener%E2%80%99s-housing-streamlining-bill-sb-35-approved-assembly-part-broad-housing