Housing priorities shift amid pandemic
Lawmakers fail to push few housing bills through shortened legislative session
John Geary, co-founder of small construction startup Abodu, watched California lawmakers closely in their final hours this week for bills that might boost or hurt his business.
One hotly contested proposal, SB 1120, would make it easier for homeowners to divide lots, allowing them to build new homes and sell them for a profit. The measure could have dramatically boosted Abodu’s sales of prefabricated accessory dwelling units. Geary spent weeks analyzing the market and preparing information for Bay Area homeowners.
“We had that ready to go,” he said. “But obviously our legislature had other plans.”
The bill stalled, capping a disappointing close to this year’s legislative session for pro-housing forces.
Several months ago, advocates seemed poised for success after Gov. Gavin Newsom devoted much of his state of the state address in February to homelessness and housing. A month later, the state had slipped into a historic health crisis, and unemployment spiked. Lawmakers focused on emergency safety measures and filling a $54 billion deficit.
Sen. Scott Wiener, the San Francisco Democrat who has penned major housing reforms in recent years, shared his disappointment Thursday on social media: “Let’s be straight up: California failed on housing this year. Various factors came into play — some NIMBY, some petty, some legit — & good bills died. We can’t give up this fight. We’ll be back with a strong 2021 housing agenda. Because our housing crisis is untenable.”
The victories for slowgrowth advocates mean the struggle to build more housing in California will continue. Newsom’s aggressive housing production goals have become even more elusive, but advocates insist they’ve gained new legislative support for future battles.
The state faces a shortage of millions of homes and apartments. The imbalance between supply and demand has pushed housing prices to the highest in the country. In the Bay Area, the median price of a home in July was $950,000, about three times the national figure.
The legislative session began with housing bills backed by powerful lawmakers: ambitious proposals to make it easier to subdivide lots, build ADUs and relax single-family zoning restrictions. Nearly all of them failed.
The first to go: Wiener’s broad reform measure, SB 50, which would have allowed high-rise apartments near job centers and transit lines. It also would have allowed the development of multiplex apartments in residential neighborhoods as long as they met some local regulations. The measure died on the senate floor in January.
A subsequent “light-touch density” bill allowing multiplexes in suburban communities also failed to win passage.
In May, Senate President Pro Tem Toni Atkins, D-San Diego, announced a slate of measures designed to boost residential development, including affordable housing projects. The bills would have streamlined state environmental regulations for some projects, encouraged developers to build more affordable units, and made it easier to redevelop commercial sites, such as shuttered big-box stores, into homes and apartments.
Organized labor groups fought efforts to carve out exceptions for affordable housing development from the California Environmental Quality Act, saying the exceptions would not protect construction worker wages.
Assembly member Robert Rivas, D-Hollister, saw his effort to make it easier to build infill housing stymied in committee. The pandemic-shortened legislative schedule forced lawmakers to pare down housing priorities.
“This was supposed to be the year of housing production,” Rivas said. “And I think we failed on that promise.”
Susan Kirsch, a political adviser and leader of a grassroots campaign to defeat the housing bills, said this year’s slate of housing proposals “missed the mark.” Slow-growth proponents watched seven of nine bills they targeted for defeat get killed.
Kirsch expects the battle to continue as housing advocates bring back new, slightly amended proposals next year. “We keep trying to get ahead of the curve,” she said.
Matt Lewis of California YIMBY said advocates saw momentum and forged new coalitions this year, even if several key bills, such as SB 1120, failed to become law. “We’re going to be back next year with something at least this aggressive,” he said.
But Assemblymember David Chiu, D-San Francisco, said not all of the state’s housing issues come with big price tags. For example, policy changes to zoning regulations can have an impact on the housing shortage without state outlays.
“The question really is political will,” said Chiu, chair of the housing and community development committee. “We have an awful lot of work ahead of us.”
Geary was disappointed this year, as well. Abodu and other ADU developers have benefited in the past from new state laws encouraging in-law units.
A recent analysis of SB 1120 by the UC Berkeley researchers at the Terner Center for Housing Innovation found nearly 6 million single-family parcels in California were eligible to be split and developed for new housing.
Geary expected to sell two-bedroom units to Bay Area homeowners looking to split their lots, bringing new homes on the market for around $500,000.
The failed bill “really would have been a monumental step forward,” he said. “This cycle was a tough one.”