The California Chamber of Commerce supports language proposed by Governor Edmund G. Brown Jr. in a budget trailer proposal that allows new market-rate housing projects to be approved.
“This is a very important first step to addressing the state of California’s unprecedented housing affordability crisis,” says CalChamber Policy Advocate Anthony Samson in the latest Capitol Report video. “Specifically, the proposal will expedite certain types of housing developments that meet established criteria, including being consistent with zoning and general plans and being located within urban infill settings.”
The proposal allows the new housing projects to be approved “as of right” so long as the projects:
• are multifamily housing developments surrounded by urban uses;
• have affordable housing components of 5% to 20%, depending on access to transit and the income levels targeted;
• conform to local general plan and zoning standards; and
• provide relocation assistance to displaced households.
Housing Crisis
California is currently facing a significant housing crisis—a crisis not only concerning the affordability of housing, but the supply of housing, the two of which are inextricably linked.
In fact, in a February 2016 report, the Legislative Analyst’s Office (LAO) noted that “California’s high housing costs denies many households the opportunity to live in the state and contribute to the state’s economy. This, in turn, reduces the state’s economic productivity.”
According to the LAO, policies that seek to address housing affordability without addressing housing supply do “very little to address the underlying cause of California’s high housing costs: a housing shortage.” Rather, the LAO opined that policies promoting additional housing supply are the only way to chip away at California’s housing affordability crisis.
Step in Right Direction
The Governor’s “as of right” proposal is a welcomed step in the right direction to address California’s housing affordability crisis, as it will incentivize and streamline the development of certain housing developments and thereby contribute to increased housing supply.
Importantly, while the “as of right” proposal will eliminate the need to conduct project-level environmental review under the California Environmental Quality Act (CEQA), the proposal expressly requires each project to be consistent with the relevant General Plan and zoning requirements.
General Plans and zoning policies are required to undergo separate CEQA review subject to robust public review and comment. Accordingly, the streamlining approach in the Governor’s “as of right” proposal strikes an appropriate balance by expediting housing development while continuing to retain robust environmental protections for qualifying housing developments.
California’s current housing crisis, in which the bottom 25% of income earners are spending 67% of their income on housing, is unsustainable and must be addressed with multiple commonsense reforms. The Governor’s “as of right” proposal is one such reform, and for this reason, the CalChamber is urging the Budget Conference Committee to approve it while continuing to explore additional ways to increase housing supply and affordability throughout the state.
The proposal is currently the subject of legislative negotiations and CalChamber hopes that this will come to a final resolution by the end of the legislative year.
Action Needed
CalChamber is encouraging members to write legislators to support the proposed language, and has posted a sample letter.
