Governor Signs CalChamber-Backed Bills to Boost Construction of New Housing

In recent weeks, Governor Gavin Newsom has signed five California Chamber of Commerce-supported bills that will increase housing production in the state.

The bills are part of a suite of housing legislation signed into law in September that complement the Governor’s $22 billion housing affordability and homelessness package. According to the Governor’s Office, these actions represent a comprehensive housing vision and the state’s commitment to create more affordable housing, faster and cheaper.

The CalChamber urged support for the bills in conjunction with the California Home Building Alliance, a coalition including trade associations representing small and large businesses, for-profit and not-for-profit home builders, realtors, developers, employers, affordable housing infill builders, and nonprofit research, education and advocacy organizations.

Signed Legislation

Signed on September 16 were:

Housing Crisis Act of 2019

SB 8 (Skinner; D-Berkeley): Provides technical cleanup and extends the sunset date to January 1, 2030 for SB 330 (Skinner-2019), a law that promotes more affordable housing development in California by reducing permitting delays and unexpected fees levied during the housing development permitting process.

Housing Development Approvals

SB 9 (Atkins; D-San Diego): Streamlines more infill housing while providing substantial local control to land use development by allowing property owners to convert single-family homes into multiple units or divide their properties and build up to two residential units on each lot, all without triggering the California Environmental Quality Act (CEQA) so long as all units are consistent with all local land use laws.

According to McKinsey Global Institute, nearly 800,000 units could be developed by adding units in existing single-family zones. These small-scale development policies build upon successful state housing measures, like the promotion of Accessory Dwelling Units (ADUs), which grew to make up one-fifth of all new housing stock in Los Angeles in just two years.

Local Control for Increased Housing Density

SB 10 (Wiener; D-San Francisco): Provides local cities and counties with full authority to streamline upzoning in their jurisdiction for up to 10 additional middle-income density housing units per parcel without triggering CEQA, if they choose.

SB 10 creates a path to adding modest density to address California’s housing shortage, preserves significant local control for local jurisdictions, and makes it faster, less expensive and less risky for a city to undertake a community process to increase density. It is a step forward in fixing what has been a historic problem throughout the state.

In his September 16 statement announcing the signing of SB 8, SB 9 and SB 10, Governor Newsom said: “The housing affordability crisis is undermining the California Dream for families across the state, and threatens our long-term growth and prosperity. Making a meaningful impact on this crisis will take bold investments, strong collaboration across sectors and political courage from our leaders and communities to do the right thing and build housing for all.”

Signed by the Governor on September 28 at an affordable housing development in Oakland were:

Density Bonus Law

SB 290 (Skinner; D-Berkeley): Removes four barriers that limit density bonus applicability in California by allowing low-income student housing projects to receive up to one incentive, aligning the density bonus approval requirements with those in the Housing Accountability Act, expanding the definition of for-sale projects beyond common interest developments, and adding a parking waiver for housing developments within one-half mile of transit that include 40% moderate-income units.

California is facing a massive shortage of housing at every level—from affordable to market rate. One tool the state has to increase the production of affordable homes is the density bonus law. It currently allows affordable and senior housing developers to increase a project’s density by up to 35%, depending on the amount of affordable housing being built. The density bonus law, however, is underutilized due to significant barriers, making its application infeasible.

According to the University of California, Berkeley, Terner Center for Housing Innovation, less than half of California cities and counties have had a development project that used the density bonus, and most jurisdictions have had only one or two projects.

SB 290 addresses four barriers that limit density bonus applicability.

Planning and Zoning

AB 215 (Chiu; D-San Francisco): Helps ensure more housing units are constructed by requiring any localities not meeting their regional average production requirements to consult with the Department of Housing and Community Development; incentivizes local governments to amend local requirements to encourage more housing production; and empowers the Attorney General to enforce the Housing Crisis Act of 2019. The Housing Crisis Act of 2019 prevents cities from reducing their overall development capacity and from approving the demolition of rental housing without in-kind replacement.

Combined, these three accountability strategies will better ensure the alignment of state and local goals. By increasing accountability at the local level, the state and cities can continue to work together to facilitate the necessary production of homes for Californians of all income levels

In his September 28 news release, the Governor acknowledged that the “acute affordability crisis we are experiencing in California was decades in the making, and now we’re taking the necessary steps to fix it.”

In interviews with news outlets, the Governor has committed to continue working to address the state’s housing shortage.

The CalChamber supports more legislation to build on the first steps taken this year and continue streamlining housing production and reduce the cost of housing for the workforce.

Staff Contact: Adam Regele

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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.