With the amendments, the California Chamber of Commerce has no position on AB 725 (Wicks; D-Oakland), now a former job killer.
Before the January 6 amendments, AB 725 would have exacerbated California’s housing crisis by restricting suburban and metropolitan jurisdictions’ share of regional housing need for above moderate-income housing to only 20% single-family homes.
This indirect inclusionary housing requirement would have substantially reduced single-family home construction throughout California.
Approximately half of all residential permits issued in California in 2018 were for single-family homes. AB 725 would have placed income restrictions on 40% of all residential housing built in suburban and metropolitan California jurisdictions, in effect creating an 80% inclusionary housing requirement that would have had a negative impact on thousands of California families who have the means to buy a single-family home.
After amendments, AB 725 balances the state’s goal of promoting the construction of multifamily development in moderate- and above moderate-income sites with Californians’ desire to buy single-family homes.
Decades of empirical evidence have shown that housing affordability and displacement problems are due to significant long-term shortfalls in new housing construction.
The single most important factor driving high housing costs “is the significant shortage of housing,” as the nonpartisan Legislative Analyst’s Office (LAO) acknowledged in its February 21, 2019 report on housing, “California’s Housing and Homelessness Challenges in Context.”
California must pass legislation that encourages the development of all types of housing. California’s housing shortage remains a classic example of a supply-demand mismatch that is driving home and rental prices to all-time highs.