California Gov. Gavin Newsom’s signing of historic reform bills aimed at easing the state’s worsening housing shortage by overturning decades of policy favoring single-family zoning is seen as a start by leaders and activists to further efforts to curb suburban sprawl, traffic congestion and a surging cost of living in the nation’s most populous state.
Newsom, in one of his first major legislative actions since easily surviving a Sept. 14 recall vote, signed Senate Bill 9, which for the first time in modern California history will allow homeowners to split their single-family lot to build duplexes with up to four units. The governor also signed Senate Bill 10, a measure that creates a streamlined zoning process to allow developers to build up to 10 market-rate multifamily units near transit or in urban infill areas.
The bills, approved by both houses of the Legislature late last month, are part of a broader effort by state and local lawmakers to ease a housing shortage that has driven up rents and home prices, increased homelessness and contributed to businesses and residents leaving California. Officials in California cities such as Sacramento and Berkeley have joined elected leaders from Oregon to Minnesota to Massachusetts, as well as in the Biden administration, in trying to address housing shortages across the United States.
“The housing affordability crisis is undermining the California Dream for families across the state and threatens our long-term growth and prosperity,” Newsom said a statement. “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.”
California YIMBY, a nonprofit group working to end the state’s housing shortage that sponsored the legislation, said the new laws represent major progress on Newsom’s promise to end California’s housing shortage and affordability crisis.
“The end of exclusionary single-unit zoning in California is a historic moment. We’ve taken a huge step toward making California a more affordable, equitable and inclusive state,” California YIMBY CEO Brian Hanlon said in a statement emailed to CoStar News. “We’re grateful to the governor for upholding his promise to make housing a priority, especially with the pressure he’s been under to overcome the undemocratic recall.”
Local government officials, community activists and progressive groups had called on Newsom to oppose the bills. They said the zoning changes would undermine local control over their housing, worsen traffic and parking woes and allow developers to build more expensive rentals when California needs more affordable housing.
Opposition from groups, ranging from tenants’ rights advocates and other progressives to elected leaders in upscale bedroom communities who are leery of giving up local zoning control, has held up several past efforts by state officials, including state Sen. Scott Wiener, a Bay Area Democrat, to pass laws increasing density near transit stops and other proposals to increase housing supply.
“My community will go downhill,” Adrin Nazarian, an Assembly member from the suburban Sherman Oaks neighborhood of L.A.’s San Fernando Valley, said on the Assembly floor last month in opposing the two bills. “In 20 years when we haven’t dealt with the consequences of bills like this on transportation, utilities and parking, we’re going to be devastating these communities.”
The League of California Cities, which opposed SB 9, said the new law will override local control over planning and zoning while failing to require developers to build more affordable housing units.
“We are disappointed in the signing of this flawed legislation,” League of California Cities Executive Director Carolyn Coleman said in a statement. “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. Even worse, there are no provisions in SB 9 that require new housing to be affordable, continuing the cycle of the construction of new units that are out of reach for many working-class families.”
Surging Housing Costs
However, lawmakers face increasing pressure from residents and businesses to find compromise solutions that address soaring housing costs and housing construction levels that are too low to keep up with population growth.
Senate Bills 9 and 10 allow for denser housing in a state where more than two-thirds of the land is zoned for single-family homes at a time when millions of additional units are needed to meet demand, according to recent estimates.
Despite the League of California Cities’ opposition, a growing number of local governments now understand that the zoning changes are necessary to help meet upcoming housing production goals and mandates outlined under the state’s Regional Housing Needs Allocation planning process, Matthew Lewis, a spokesman for California YIMBY, told CoStar News.
The decadeslong focus of California law on preserving low-density, single-family housing has made it expensive and difficult to build enough housing to keep up with population growth, according to a study three years ago by the Terner Center for Housing Innovation at University of California, Berkeley. California needs at least 1.8 million new housing units, or 180,000 new houses annually, to meet demand through 2025, according to the Terner study.
Even with that demand, the state has averaged just over 100,000 housing starts annually in the past few years, according to census data. California cities and counties in 2020 issued permits for construction of 43,215 multifamily units in projects with five or more units, the lowest total since 2014, while total housing starts declined almost 4% to just over 106,000, the lowest total since 2016.
Newsom, who campaigned for office seeking to add 3.5 million housing units to the state by 2025 based on other projections of potential need, noted in his signing message that reforming residential zoning has become a national movement. The governor said the Biden administration this month praised Senate Bill 9 and similar state and local laws that allow more housing units on various land parcels.
Oregon’s Legislature in 2019 passed a law expanding the ability of property owners to build duplexes and other housing in residential zones. Minneapolis, Boston’s Cambridge suburb and California’s Berkeley, Oakland and Sacramento have all made similar zoning changes in recent years.
“These moves offer much-needed potential to increase the housing supply,” members of Biden’s Council of Economic Advisers wrote in a White House blog on Sept. 1.
Newsom said Senate Bill 9 includes provisions to prevent the displacement of existing renters and protect historic districts and fire-prone areas.
State Senate President and San Diego Democrat Toni Atkins, who introduced SB 9, said Newsom’s support is a step toward “solving one of the most vexing issues facing our state — increasing the amount of housing and widening access for more Californians.”
“SB 9 will open up opportunities for homeowners to help ease our state’s housing shortage, while still protecting tenants from displacement,” Atkins added. “It will help our communities welcome new families to the neighborhood and enable more folks to set foot on the path to buying their first home.”
SB 9 “may be the most significant housing bill coming out of California’s current legislative session” this year, the Terner Center at the University of California, Berkeley said in a study last spring.
Transit Emphasis
Senate Bill 10, introduced by Wiener, is aimed at making it easier for cities to pass a local ordinance to zone any parcel for up to 10 residential units if located near transit or urban infill areas.
The law will give local leaders “another tool to voluntarily increase density and provide affordable rental opportunities to more Californians,” Newsom said in his signing message.
Such bills had mixed success in the Legislature over the past few years as California looks to address a chronic shortage of housing that’s affordable to working families. Construction of apartments and single-family homes has severely lagged behind demand for the past two decades in the state with some of the nation’s highest housing prices and most restrictive building standards.
The signings come after several attempts by Wiener and his supporters to pass legislation that would radically change the state’s zoning rules to encourage higher-density housing construction. It’s an effort to counteract decades of single-family growth that has resulted in suburban sprawl across the state under control among local governments.
Wiener’s Senate Bill 50 ignited a political firestorm and stalled in mid-2019 under pressure from tenants’ rights groups, local leaders and affordable housing developers.
However, momentum started to increase last year for more modest legislation that would allow density increases in existing single-family neighborhoods as job losses and other economic effects of the coronavirus pandemic made it more difficult for many residents to buy or rent housing.
The Assembly and Senate passed SB 1120, which would have allowed for up to four new homes on existing single-family parcels, but the measure fell short of becoming law as time ran out at the end of the legislative session a year ago.
Wiener returned with Senate Bill 10 in December as a way to chip away at the housing crisis in a manner that makes sense for each city.
“SB 10 provides one important approach: making it dramatically easier and faster for cities to zone for more housing,” Wiener said in a statement this week. “It shouldn’t take five or 10 years for cities to re-zone, and SB 10 gives cities a powerful new tool to get the job done quickly.”
The shortage has contributed to the nation’s largest homeless population, accounting for nearly a quarter of all homeless people and half the nation’s unsheltered residents, according to the U.S. Department of Housing and Urban Development.
Newsom also Thursday signed Senate Bill 8, a measure authored by Berkeley Democrat Nancy Skinner that extends a law accelerating the approval process for housing projects, curtails local governments’ ability to downzone and limits fee increases on housing applications.
Author Credit: CoStar Group