New Legislation In California Is Attempt To Combat Housing Crisis

california housing construction > New Legislation In California Is Attempt To Combat Housing Crisis - California Real Estate Expert Robert Wolf - California Real Estate Expert Robert Wolf >

Gov. Gavin Newsom signed a list of bills that would allow more duplexes and small apartment buildings in certain neighborhoods, with the intent to create more affordable housing in California. 

The suite of bills, Senate Bills (SB) 8, 9 and 10 and Assembly Bill (AB) 1174, coupled with the recently announced California Comeback Plan, carry the potential to expand housing production, streamline permitting and promote density closer to major employment hubs.

While the housing deficit in California is undeniable, there is very little consensus on how to combat the crisis. 

Case in point, nearly 250 municipalities throughout the state opposed Newsom’s most recent signing spree.  Led by the League of California Cities, local governments objected that the laws will undermine a local government’s police power, the source of authority for local planning and land use control.  There is also concern that these bills are a significant push towards the elimination of single-family zoning statewide.

SB 8 extends the provisions of Housing Crisis Act of 2019 through 2030.  The Housing Crisis Act of 2019, which was scheduled to sunset in 2025, was enacted to jumpstart more housing production by accelerating the approval process for housing projects, curtailing local governments’ ability to downzone, limit fee increases on housing applications and implementing accountability provisions.

SB 9, the California Housing Opportunity and More Efficiency (HOME) Act, is the most contentious bill in the bunch.  The source of the bulk of the controversy is SB’s authorization for a property owner to split a single-family lot into 2 lots and place up to 2 units on each newly created lot – resulting in the potential for up to 4 units on properties currently limited to single-family houses.  SB 9 also requires cities and counties across California to approve development proposals that meet specified size and design standards. Some of the key actions include:

  • SB 9 mandates ministerial approval of an application for a housing development, including a parcel map, that splits a parcel into 2 separate parcels and contains no more than 2 residential units on each lot without a hearing if the following requirements are met:
    • The parcel is within a single-family residential zone.
    • If the housing development is located within a city, at least some portion of the boundaries of the parcel must be in an urbanized area or urban cluster, as designated by the United States Census Bureau. Or, if the development is in an unincorporated part of a county, the parcel must be wholly within the boundaries of an urbanized area or urban cluster, as designated by the United States Census Bureau.
    • The split results in 2 parcels of approximately equal lot area. A parcel may not be smaller than 40% of the original parcel’s lot area.
    • Each new lot must be at least 1,200 square feet in size.
    • The project will not demolish more than 25% of the existing exterior structural wall unless permitted by local ordinance.
    • A proposed project or property split does not result in the demolition or alteration of:
      • Affordable or rent-controlled housing;
      • Market-rate housing that has been occupied by a tenant in the past 3 years;
      • The property owner exercised the right to withdraw accommodations from rent or lease within the last 15 years; or
      • The property is listed as a historic landmark or is located within a historic district.
    • Any unit created as a result will not be used for short-term rentals, and must be rented for a term longer than 30 days.
    • Property owners have signed an affidavit stating they will occupy 1 of the housing units as a primary residence for at least 3 years after splitting the property or the addition of units.
    • Project adheres to the objective zoning and design review standards established by the local government.
    • The lot split conforms to all applicable objective requirements of the Subdivision Map Act.
    • The parcel being subdivided has not been part of a prior subdivision using the urban lot split process permitted under SB 9.

The State believes these provisions will expand housing options for people of all incomes, create more opportunities for homeowners to add units on their existing properties, all while preventing the displacement of existing renters and protect historic districts, fire-prone areas and environmental quality.  Opponents argue that SB 9 undermines the ability of local governments to responsibly plan for the types of housing that communities need, circumvents the local government review process and silences community voices.  There is also speculation that a space that once hosted a single home could ultimately size 4 comfortably.

SB 10 establishes a voluntary process for local governments to access a streamlined zoning process for new multi-unit housing near transit or in urban infill areas, with up to 10 units per parcel.  The legislation simplifies the CEQA requirements for upzoning, giving local governments another tool to voluntarily increase density and provide affordable rental opportunities to more of California.

SB 10 has attracted much less opposition than SB 9.

In conjunction with the suite of enacted housing bills, California announced the California Housing Accelerator – a $1.75 billion component of the California Comeback Plan.  The California Housing Accelerator fund is intended to expedite construction of affordable multifamily units in projects stalled due to constraints on the supply of tax-exempt bonds and low-income housing tax credits.  Housing officials expect the fund will back 90 shovel-ready projects by the end of the year, creating between 6,300 and 7,200 units of low-income housing – including 1,200 units for homeless individuals. Recipients of the California Housing Accelerator funds have not yet been selected.


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