SB 50 didn’t pass. But California is still considering these housing bills.

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The California Senate voted to reject Senate Bill 50 last week, ending (at least temporarily) a high-profile debate about housing development and density.

That heated conversation has taken center stage at the state capitol since Sen. Scott Wiener (D-San Francisco) unveiled SB 827, a more dramatic predecessor to the more recent bill, two years ago.

But the housing issue isn’t going away.

In Los Angeles County alone, more than a half-million affordable homes are needed to meet demand from low-income renters, according to a 2019 report from the California Housing Partnership and the Southern California Association of Nonprofit Housing.

Even some of those lawmakers who voted against SB 50 last week applauded Wiener’s efforts to promote construction of new homes—something in line with Gov. Gavin Newsom’s proposal to address California’s shortage of affordable housing with a blitz of new development.

Both the governor and Senate president pro tempore Toni Atkins have promised to make housing affordability a top priority this year.

With that in mind, here are some bills now under consideration at the state level that could make a big impact on the cost and availability of housing in Los Angeles and beyond.

AB 1279

Make wealthy neighborhoods build housing? Assembly Bill 1279 is similar to SB 50, but it would apply only in “high-resource areas” that have lots of neighborhood amenities but low residential density.

Proposed by Assemblymember Richard Bloom (D-Santa Monica), the bill would allow developers to construct buildings with up to 100 units of housing in these areas, depending on a project’s proximity to major streets and business districts. Depending on the size of the project, up to 50 percent of those units would need to be reserved for low-income tenants.

Property owners in these areas would also be able to build up to four units on a lot zoned for single-family use, provided they make those units affordable or pay a fee toward future affordable housing.

The bill puts a much smaller cap on the number of units developers can build than SB 50, and it makes no effort to address parking requirements or to facilitate transit-oriented development. But its emphasis on avoiding gentrification could make it appealing to some of those who worried SB 50 would result in rapid community change and renter displacement.

AB 1905

A crackdown on vacation homes? That’s the general principle behind Assembly Bill 1905, introduced last month by Assemblymember David Chiu (D-San Francisco).

If passed, it would eliminate California’s mortgage interest deduction for second homes, meaning that homeowners would only be able to deduct mortgage interest paid on a single property when calculating their income subject to state taxes.

It would also reduce the loan amount that qualifies for the mortgage interest deduction, even for primary residences.

Chiu estimates that making people with multiple homes pay more taxes could generate $400 million to $500 million in revenue that could be redirected toward addressing a statewide spike in homelessness.

“While thousands of Californians sleep on our streets every night, it makes little sense for the state to subsidize the wealthy’s ability to own two homes,” said Chiu in a statement.

Not likely to be popular with the real estate industry, the bill is awaiting its first committee hearing.

SB 795

California’s redevelopment agencies died nearly a decade ago, and, while some of the projects undertaken by those agencies (like the demolition of Downtown LA’s Bunker Hill neighborhood) remain controversial, local officials frequently cite the loss of redevelopment funding as a barrier to constructing more affordable housing.

Senate Bill 795, introduced last month by Sen. Jim Beall (D-San Jose), would create a similar funding source for local governments. It could be used to construct affordable housing and dense developments near transit, as well as infrastructure to mitigate traffic and protect communities from fires and floods.

The money would come from a property tax pool dedicated toward school funding, with the state using revenue from its general fund to ensure school districts still receive money guaranteed to them under state law.

Newsom vetoed a similar bill last year, citing concerns about the potential cost of the proposal. In a statement announcing the new bill, Beall argued it’s a necessary expense.

The solution to homelessness is a home,” he said. “We need an on-going funding source to help local communities if we are serious about addressing this crisis.”

AB 2058

Assembly Bill 2058 is aimed not at building new homes but preserving existing ones—specifically affordable apartments that could soon be converted to market rate units.

Proposed by Assemblymember Jesse Gabriel (D-San Fernando Valley), the bill would give tax breaks to owners of affordable housing developments, provided they make arrangements to keep the units affordable.

Most apartments reserved for low-income renters are kept affordable through multi-decade covenants entered into by developers. Some of those agreements have now expired, or will in the near future.

In Los Angeles, more than 5,000 affordable units were converted to market rate between 1997 and 2018, according to the California Housing Partnership. Over 12,000 more are now at risk of conversion.

Gabriel says his bill could help to preserve up to 25,000 units across all of California. It would also cost the state $500 million in lost tax revenue. In a statement, Gabriel argues the cost (around $20,000 per unit) is worth it. Building a new affordable unit, he points out, can cost more than $400,000.

AB 725

Assembly Bill 725 addresses housing affordable to middle-class residents in particular. Proposed by Assemblymember Buffy Wicks (D-Oakland), it would require cities to make plans for moderately dense residential development available to those earning at least 80 percent of the median income in the county where they live.

Under state law, cities must periodically update land use plans that determine what kinds of housing developers can construct in areas zoned for residential use. These plans must allow for enough new housing to accommodate expected population growth.

The bill would require cities to allow developments with at least two units (but no more than 35 units per acre) on 25 percent of the land they set aside for both moderate- and above-moderate-income housing.

That would facilitate construction of “duplexes, triplexes, and thoughtful multifamily housing,” Wicks said last week during an Assembly hearing. She argued that the bill would obligate cities to increase residential density “while still honoring the fabric of our communities.”

The bill passed the Assembly and will now be considered by the Senate.

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