Amendments Neutralize Housing Job Killer Bill

Changes adopted last week have removed onerous provisions from an inclusionary housing requirement bill.

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.

Staff Contact: Adam Regele

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Adam Regele
Adam Regele joined the CalChamber in April 2018 as a policy advocate specializing in environmental policy, housing and land use, and product regulation issues. He came to CalChamber after practicing law at Oakland-based Meyers, Nave, Riback, Silver & Wilson, PLC, where he advised private and public clients on complex projects involving land use and environmental laws and regulations at the local, state and federal levels. Before entering private practice, Regele served as a federal judicial law clerk to the Honorable Edward J. Davila of the U.S. District Court, Northern District of California. Regele earned a B.S. in environmental science at the University of California, Berkeley, and a J.D. from UC Hastings College of Law, where he was symposium editor and research and development editor for the Hastings West-Northwest Journal.