In my last blog post, I wrote about AB 1482, the statewide rent control bill adopted by the California legislature, which Governor Gavin Newsom has just signed. Awaiting action by Newsom momentarily is the Housing Crisis Act of 2019 (SB 330), a measure intended to promote California housing construction by suspending certain local limitations on housing construction. While municipal restrictions arguably have been the most significant impediments to building housing in the Golden State, it is unclear whether this legislation will correct this situation, as more fully discussed below.
The Housing Crisis Act is intended to speed up the development of housing throughout California by (1) reducing the amount of time required for obtaining building permits for housing, (2) putting caps on housing development fees, and (3) prohibiting local jurisdictions from lowering the number of housing units allowed to be built. The bill would, inter alia, ban cities and counties from placing moratoriums on building new housing, changing their codes to mandate less intensive housing uses (“downzoning”), and raising fees during the development approval process. “Our failure to build enough housing has led to the highest rents and home ownership costs in the nation,” said State Sen. Nancy Skinner, the author of the bill. According to Sen. Skinner, “My bill, SB 330, gives a greenlight to housing that already meets existing zoning and local rules and prevents new rules that might limit housing we so desperately need.” If signed, the law would remain in effect until 2025, when it is scheduled under its own terms to expire.
Among the supporters of the bill are housing developers, technology companies, and environmental and affordable housing advocacy organizations, who contend that “NIMBY” (“not in my backyard”) residents and local governments are at least partly responsible for imposing obstacles to housing construction in California. Opposition to the proposed law consists primarily of the cities and counties up and down the state that are against outside control over housing within their jurisdictions, especially those wealthier ones that enjoy lower population density.
I’ve written before in my blog about the tensions between state and local governments over housing development issues. Local control advocates argue that this bill allows the state to force the burden of infrastructure costs on cities and counties, favoring local autonomy over these issues. “Decisions around land use and planning and accounting for the quality of life in a community, I think those decisions rightfully belong at the local level. And frankly, I think the voters feel the same way,” noted Carolyn Coleman, executive director of the League of California Cities.
Despite these issues, the Housing Crisis Act is consistent with California housing development policies supported by Governor Newsom, who pushed during his 2018 gubernatorial campaign for construction of 3.5 million new housing units in California by 2025, and who has publicly supported this bill. Due in no small part to the crisis atmosphere regarding housing in this state, the bill was passed by the Assembly on a vote of 67-8 and by the Senate on a vote of 30-4. Advocates for housing development assert that, with the enactment of this bill, cities and counties will be compelled to approve more housing more quickly.
Despite the near-unanimous support for this new law in state government, there remain substantial questions about its potential efficacy for promoting housing development in California. There are still many market barriers to building housing in California, especially low labor supply and high construction costs, and state and local governments continue to impose the cost of below market rate housing on the development of market-rate housing, apparently banking on the likely continued profitability of housing development even with these costs. While this bill appears to curtail some local government barriers to building housing, the market realities of housing development in this state remain true still.
The full text of the Housing Crisis Act of 2019 can be found here.