With California Lawmakers Back from Recess, Housing Crisis Is in the Crosshairs

State Senator Scott Wiener and Assemblymember Richard Bloom discuss housing legislation at an event Thursday co-hosted by Abundant Housing L.A. and USC Department of Urban Planning and Spatial Analysis. Photo via Abundant Housing L.A.
State Senator Scott Wiener and Assemblymember Richard Bloom discuss housing legislation at an event Thursday co-hosted by Abundant Housing L.A. and USC Department of Urban Planning and Spatial Analysis. Photo via Abundant Housing L.A.

Cross posted from our sister-site, Santa Monica Next.

California state legislators are back in Sacramento after a month-long summer recess and they are looking to tackle the state’s growing housing crisis with a package of bills that could generate more than $3 billion for affordable housing as well as streamline new housing approval and construction.

But lawmakers and political observers alike have noted that it won’t be an easy task to get the votes necessary to pass some of bigger-ticket legislation, like S.B. 2 and S.B. 3, both of which have passed the State Senate but still need to get through the Assembly. And both require a two-thirds supermajority to pass.

S.B. 2, introduced by State Senator Toni Atkins (D-San Diego), would place a $75 fee on real estate transactions and generate roughly $250 million a year annually. State Senator Jim Beall (D-San Jose) introduced S.B. 3, which would put a housing bond before the voters in 2018 that would generate $3 billion.

“We need every single Democrat to vote yes on those bills,” State Senator Scott Wiener (D-San Francisco) told a crowd Thursday at an event co-hosted by Abundant Housing Los Angeles and the USC Department of Urban Planning and Spatial Analysis. He urged the audience to contact their representatives in the State Assembly.

As Los Angeles Times reporter Liam Dillon noted in this Twitter thread, even $3 billion is a fraction of what is needed to meet the demand for affordable housing in California.

Wiener was joined Thursday by State Assemblymember Richard Bloom (D-Santa Monica) who has been another major champion of housing legislation in Sacramento.

Bloom began his comments Thursday drawing attention to several news stories that illustrated the underlying causes of California’s growing housing crisis, including a recent story about the affluent community of Redondo Beach placing a temporary moratorium on new mixed-use development and a recent setback for a new housing project for homeless people in Boyle Heights.

One of Bloom’s dozen housing bills, A.B. 1505, could also help. The bill would “allow any city that wants to to set up a responsible system of inclusionary housing,” Bloom told the audience Thursday.

The bill reaffirms the right of local jurisdictions to require developers to include subsidized affordable housing when they build new market-rate housing.

Another bill Bloom highlights Thursday was A.B. 1521, which would aim to preserve existing affordable housing.

But the crux of California’s housing crisis is that there is a major shortage of homes at all levels of affordability due to decades of underbuilding housing.

Bloom illustrated the problem with an anecdote about a project in his hometown of Santa Monica. A developer proposed 150 new apartments to replace an existing outmoded office park at the corner of Cloverfield and Pico but sold off the property shortly after a contentious community meeting where people voiced strong opposition to the project. The property was purchased and soon rehabbed into a Whole Foods 365, the high-end grocer’s more affordable chain.

This sort of thing happens frequently in Santa Monica and in the past few years has resulted in the loss of at least 1,000 new homes, including low-income apartments. And the city’s new Downtown Community Plan plans for a maximum of 2,500 new homes to be built in the area through 2030. Given that Santa Monica has seen its population grow by fewer than 10,000 people since 1960, it illustrates the underlying problem: coastal California cities are actively impeding the housing growth necessary to keep them accessible to middle- and low-income people.

Venice, which has actually seen a decrease in residential density over the past couple decades, is a more extreme example.

When wealthier communities like Santa Monica and Venice reject new housing growth and drive up housing costs, it pushes people farther into communities that are more affordable, which ultimately raises the cost of housing in those communities.

The idea behind Wiener’s streamlining bill, S.B. 35, is precisely to make it easier for projects that conform to a municipality’s zoning standards to move forward, but it is a controversial measure.

At Thursday’s meeting, a handful of people showed up in opposition to the bill, which they contend will only expedite gentrification in low-income areas, a concern that has been echoed by organizations like Tenants Together.

Wiener responded to those critiques Thursday noting that the bill “contains a categorical ban on using streamlining to demolish rent controlled housing.”

Still, some groups, including ACT-LA, remain concerned that the bill would make it harder for communities facing gentrification pressures, like South L.A. and Boyle Heights, to participate in the planning process and that the bill would not require adequate amounts of affordable housing to be included in new projects. And that it would simply incentivize wealthy communities with strong anti-development constituencies, like Venice and Santa Monica, to zone for minimum new growth, effectively circumventing the bill.

“We worked with anti-displacement and environmental groups on a number of amendments including to prevent the demolition of existing rent-controlled, BMR [below market-rate], or other renter-occupied housing, to require project sponsors use the streamlined approval in a timely manner, and to ensure that projects are occurring in urban infill areas so we don’t encourage sprawl,” Wiener said in an email Tuesday.

“I’m also co-authoring the affordable housing funding bills, meaning I’m committed to a package that both streamlines and funds affordable housing,” he said.

Responding to the concerns around downzoning as a way to circumvent SB 35, he said, “There are existing policies in place to help prevent jurisdictions from arbitrarily down-zoning, but if these communities do start downzoning, it’ll be clear that they don’t see themselves as part of the solution to California’s housing crisis. If that starts happening, we can deal with that.”

It’s also opposed by The League of Cities, which argues that the bill will erode local control.

  • Jeffrey Baker

    I’m never sure about any of these bills. How does a new fee make housing affordable? That seems weird. And my big fear is that allowing “by-right” development will permit mega corporation builders to come in and claim they are entitled to build something totally inappropriate with maxed-out parking garages.

    Our planning process is broken but local governments have used the fact that zoning permits almost nothing in order to extract concessions in return for variances. That is a good feature.

  • JonDubno

    Agreed, the entire mantra of the left seems to be that we can make housing cheaper by imposing taxes and fees that makes it more expensive.

  • MultiKdizzle

    So mandate fees, prevailing wages, and low-income thresholds onto developers, who will pass the cost on to renters and buyers, a ever-so small portion of which will win housing lotteries for affordable accommodations. Ridiculous

    How about we get the NIMBY city councils (and orgs like SF Sierra Club) out of the planning process. SB 35 is the only decent bill, and even it won’t do much. We have the most inflated housing market in the US, $250 million will do absolutely nothing.

  • Richard

    I agree, SB35 is the only bill that seems to have even a slim chance of making most people’s lives better and rents lower.

    The others will just prioritize a select few by taxing the rest of us.

  • Casey Maddren

    Wiener seems to genuinely want to address the housing crisis, and I give him credit for backing efforts to raise money for affordable housing. But SB 35 is based on a one-size-fits-all premise, and not all cities are the same. Wiener dismisses gentrification concerns by saying that SB 35 won’t allow demolition of rent-controlled housing, but he doesn’t seem to understand that new development has been driving up prices dramatically all over the state. This often leads to investors buying up RSO housing and using the Ellis Act to evict existing tenants. A prime example is Hollywood, where currently a developer has applied to demolish 40 RSO units to build a hotel. Given City Planning’s recent history, approval of the project is likely. Wiener’s bill would protect those units if the developer had applied to build housing, but it does nothing to address the ripple effects caused by new development in general. And by cutting public comment and environmental review out of the process, it will accelerate gentrification.

    But the biggest problem with the supply siders’ arguments is that they don’t address speculation, which is a major factor in driving up housing prices. It is true that we need to build more housing, but the supply siders argue that just increasing supply will solve the problem. This is a major mistake, which relies on outdated assumptions about the housing market. It is no longer simply a matter of supply and demand. With interest rates as low as they are, investors are plowing billions into real estate and development, and all they care about are high returns. This means developers mainly want to build high-end housing. The supply siders argue that this is a good thing, as any kind of new housing will increase supply, reduce demand, and that will result in lower prices. But it ain’t working out that way….

    If that were true, housing in Vancouver would be really cheap, since the city has thousands of vacant units. But middle and low-income families still struggle to find something they can afford. Check out this article from the Planning Report.

    Learning from Vancouver: Housing Affordability & the Myth of Supply-Side Densification
    http://www.planningreport.com/2017/08/14/learning-vancouver-housing-affordability-myth-supply-side-densification

    The same thing is happening in Toronto. And in fact, many cities the world over are seeing a glut of luxury units. Here’s an article from the Real Deal that talks about the 11% vacancy rate in Downtown LA. And still City Planning keeps approving high-end high-rises.

    This is why DTLA has the highest resi vacancy rate in LA County
    https://therealdeal.com/la/2017/07/27/this-is-why-dtla-has-the-highest-resi-vacancy-rate-in-la-county/

    Sacramento will never solve the housing problem until legislators acknowledge that speculation is playing a major role in jacking up housing prices. As long as they keep insisting that the crisis is solely a matter of supply and demand, they’ll be ignoring the speculative pressures that are driving up costs throughout the state. And their efforts are doomed to failure.

  • The proposed fee in SB 2 is on real estate transactions besides purchases, so it doesn’t make housing more expensive and does raise funds for badly-needed affordable housing.

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Bloom and his colleagues spoke Friday about action the State legislature will be taking to address California’s worsening housing crisis. Photo courtesy of Assemblymember Bloom’s office.

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