I’ll be discussing SB 50 (Wiener) on KQED Radio’s Forum this morning from 9am. The bill heads to its final committee hearing this Thursday before a full vote in the California State Senate.
As I’ve written before, SB 50 is the state’s first and only major attempt at comprehensive “upzoning” (relaxing local restrictions on housing) near transit and jobs. It also recently added a provision to legalize the conversion of single-family homes into duplexes, triplexes or fourplexes anywhere in the state.
Tune in at 88.5 FM in the San Francisco Bay Area and weigh in with your questions. Even if you don’t live in the Bay Area, you can stream it live and call in or email with questions.
Yesterday was a big day for SB 50 (Wiener), the bill to upzone residential areas near transit and jobs. The bill faced a potentially hostile Senate Governance and Finance Committee, chaired by State Senator Mike McGuire from Sonoma County and author of the rival Senate Bill 4. Despite the treacherous path, the outcome was a decisive win with only one vote against (Sen. Hertzberg of Los Angeles), albeit with significant amendments to the bill.
The new bill language has not been released, but based on the committee discussion and follow-up statements from Sen. Wiener and his office, the amendments essentially appear to do two big things (among other changes):
- Exempt SB 50 from counties with populations less than 600,000, except for cities within those counties with populations over 50,000 that have rail or ferry stops (see the green/purple parts of the flow chart below)
- Legalize “by right” permitting of single-family homes into duplexes, triplexes, and fourplexes across the state, albeit with only minimal demolition of existing structures allowed.
The amendments now make the overall bill relatively complex, but Berkeley-based artist Alfred Twu drew up this handy flow chart to explain how the bill will now work:
For a graphic on the counties now affected, here is a map from Barak Gila with the counties over 600,000 population (in which SB 50 applies) in yellow:
So did Marin County get a carve out, in a deal to merge the bill with county representative McGuire’s SB 4? Notable cities now apparently exempted from SB 50 include the SMART train and ferry stop in Larkspur and the ferry-stop towns of Sausalito and Tiburon. Yet San Rafael and Novato (two SMART train stops) are still covered by SB 50.
What about Sonoma County? Cities with SMART trains that no longer would be under SB 50 jurisdiction include Cotati, Rohnert Park, Cloverdale, Healdsburg, and Windsor. Still included are Petaluma and Santa Rosa.
In Southern California, Santa Barbara County’s Goleta and Carpinteria Amtrak stations also would not be covered by SB 50, while the City of Santa Barbara would still be affected.
Meanwhile, notable other cities with rail or ferry stops within those non-yellow counties, to which SB 50 will still apply, include Vallejo, Fairfield, Vacaville, Roseville, Rocklin, Madera, Modesto, Merced, Davis, Chico, Redding, and Salinas. And of course the remaining yellow counties represent major population and employment centers that could greatly increase housing production with SB 50 upzoning.
On balance, this new population criteria is not a bad compromise, as it means most of the core areas of California that prevent new housing are still affected. But the SMART train line is pretty well decimated by this compromise, as is the Santa Barbara Amtrak line. It’s a relatively small but painful price to pay, given the potential benefits statewide with the remaining areas.
Meanwhile, the fourplex by-right provision could potentially open up significant densification in California everywhere, a la the recent Minneapolis plan to end single-family zoning and allow triplexes city-wide. But could this new SB 50 provision encourage more high-density sprawl, with fourplexes in outlying areas that don’t have access to transit and therefore lead to more traffic and pollution? The original beauty of SB 50 (and its predecessor SB 827) was that it targeted transit neighborhoods to reduce overall driving miles. The fourplex provision could undermine those environmental benefits. Yet since the fourplexes (or other smaller divisions) can only involve minor demolition of existing structures (or building from the ground up on vacant parcels), the deployment may not be as sweeping as it might initially appear.
Overall, SB 50 cleared a major hurdle yesterday before its eventual advancement to the Senate floor, emerging relatively unscathed and with some potentially major new additions. If it passes that chamber, it will be on to the Assembly, with further carve-outs and compromises likely.
What’s the latest with California’s major proposed legislation to remove local restrictions on new housing near transit and jobs? I wrote back in December about Senate Bill 50 (Wiener), which would relax local requirements on density, parking, floor-area ratio and height (in some cases), for projects near transit and in high income “job-rich” communities that lack commensurate housing (read: Cupertino, home of Apple).
SB 50 also contains provisions to protect low-income renters from eviction from any new development under the bill and takes off the table (at least for the near future) large swaths of urban low-income areas deemed to be “sensitive communities.” For a visualization of what that means on the ground, see p. 11 (figure 5) of the CASA compact for a map of San Francisco Bay Area zones that would be exempted under this provision.
So how is the bill doing? Notably, SB 50 sailed through its first committee hearing last week with overwhelming approval. But it may face critical obstacles in its next hearing at the State Senate Governance and Finance Committee. That’s because that committee is chaired by State Senator Mike McGuire from Sonoma County, who authored a rival bill (Senate Bill 4) which would do much the same to relax local zoning near transit as SB 50, except with the big difference that it would exempt any “city with a population of 50,000 or greater that is located in a county with a population of less than 1,000,000” (which would exempt McGuire’s hometown of Healdsburg from the bill’s provision).
So the politics remain dicey going forward. The difference this year though is that Wiener has lined up powerful political support from organized labor, who like the job opportunities that would flow from more housing projects in urban areas. And by exempting in the near term “sensitive communities” with low-income tenants, Wiener has largely neutralized (for now) opposition from tenant groups who helped sink last year’s version, SB 827.
As a result, the opposition has so far been revealed as wealthy communities up and down California, who are resistant to allowing any new development or letting newcomers move in who can’t afford an expensive single-family home. They frequently use lines of attack like the bill is a “developer giveaway” or that proponents are “real estate shills.”
To counter these voices and win more support from advocates for low-income renters, Wiener has introduced amendments that tighten up the affordable housing requirements for any project that uses the bill’s provisions. Specifically, SB 50 now has ‘inclusionary zoning’ requirements in which developers with projects with between 20-200 units must make 15% of the units affordable to low-income residents (implemented on a sliding scale, with fewer units required if they’re available to extremely low-income residents), while 200-350-unit projects must provide 17% affordable units. Any project above 350 units must have 25% affordable units (also on a sliding scale depending on the income eligibility). Housing projects under 10 units are meanwhile exempt from providing any on-site affordable units, while projects of 10-20 units in size can pay in-lieu fees. With these provisions in place, the bill would likely lead to a significant deployment of subsidized affordable units to accompany new market-rate development.
But what practical effect will SB 50 likely have on the ground, assuming it can survive the messy politics and become law relatively intact? UC Berkeley’s Terner Center for Housing Innovation and Urban Displacement Project conducted an interesting case study policy brief and found that any likely boost to new housing under SB 50 would mostly be small scale and in high-income communities, though that impact varies depending on whether other local restrictions are in place.
The UC Berkeley study involved a parcel and financial feasibility analysis on four representative neighborhoods in the state, with the following highlights:
- Developers will get a much higher return on SB 50 projects in upscale areas, even with the higher land costs, meaning that most projects will be built in these areas and not in low-income areas (as I argued back during the SB 827 debates last year).
- Most of the available parcels (at least in these four study areas) are too small to support big projects, meaning most development will likely be of the 12-unit or less variety; in addition, the bill’s restrictions on developing properties with tenants will likely take a significant number of parcels off the table (a good thing, from the point of view of protecting current tenants from eviction).
- High on-site affordable housing requirements (discussed above) will be financially feasible in upscale areas but could sink projects in lower-income neighborhoods that otherwise barely pencil, so Sen. Wiener may want to consider a less rigid approach to the affordable housing requirements and instead scale them based on the value of the project.
- Remaining local government restrictions, such as high setback requirements and bans on projects that cast too much shadow (which was a dealbreaker for an important housing project in San Francisco that the board of supervisors just killed because it would cast occasional shadows at an adjacent park), will still impede projects, even if SB 50 passes.
- Developers may choose to ignore the benefits of SB 50 if a local government has already made it easy to permit projects at the current, locally determined height and density limits, just to avoid a protracted permitting fight that would come with using new, state-allowed higher limits.
The findings from this study should be clarifying for the SB 50 debate going forward. First, they show the relatively limited impact that SB 50 might have on the ground, at least compared to some of the hyperbolic rhetoric and initial studies about the predecessor bill’s impact in specific areas.
Second, SB 50 will likely end up being a just step (albeit a big one) in the right direction on boosting housing supply to match demand. Further reforms (some under consideration in other bills being debated this session) will need to focus on streamlining the permitting process for projects consistent with this new zoning. Otherwise, local governments are likely to respond to SB 50’s passage by adding more steps to the permitting process in order to kill projects through delay and multiple veto points. State legislation may also need to address the other zoning restrictions on new development that SB 50 leaves untouched, such as the aforementioned setback and shadow limits.
California’s current housing shortage certainly didn’t happen by accident — it’s the result of a complicated web of politics that SB 50 and its backers are trying to undo, piece by piece. We’ll have to stay tuned as more studies assess the bill’s impact and Wiener entertains more political compromises to win over support.
The Two Hundred is a new industry-backed group with a familiar refrain: California’s housing shortage (and overall low level of affordability) is caused by out-of-control environmental laws. The group is now suing the State of California for pursuing “racist” climate policies that they claim primarily displace people of color by driving up basic living expenses.
They have a website, some prominent civil rights advocates that have joined them, and a professional video to make the case that California’s housing production is stymied solely due to environmental review under the California Environmental Quality Act (CEQA). Specifically, they allege that the need to reduce greenhouse gas emissions under the state’s climate “scoping plan” is exacerbating environmental review by saddling new housing projects with requirements to reduce on-site energy usage and vehicles miles traveled. (They also blame high electricity costs for making the state unaffordable, as a result of mandates to procure more renewables and reduce on-site energy usage, even though these policies are enacted under separate statutes from the state’s climate law.)
Does this lawsuit have merit? No, but the group has correctly identified a major problem in California: the state is unaffordable for too many residents, almost exclusively due to high housing costs resulting from a decades-long history of under-building homes relative to job and population growth.
But the problem with their lawsuit is that they are blaming the wrong policies and decision-makers. Instead of starting by identifying what actions most constrain housing growth and affordability in the state, and then asking how the state is addressing or exacerbating these barriers, the lawsuit assumes (without evidence) that CEQA is the prime barrier to housing.
But study after study has debunked the idea that CEQA lawsuits are a major factor impeding new housing. Instead, the real culprit is restrictive local zoning and burdensome permitting processes.
So why isn’t the group suing every NIMBY-captured local government in the state for preventing housing, which drives up costs and forces long commutes? First, they probably don’t have a great legal cause of action against all these cities — or a convenient way to sue hundreds of them — whereas they can go after a state agency like the California Air Resources Board (CARB) more easily in court. Second, given their industry-backed leadership, I suspect that they don’t really care about local barriers to housing. Instead, they are exercising a longstanding beef against CEQA for its role in slowing megaprojects, especially sprawl development.
Yet the lawsuit is worth keeping an eye on, given the savvy of the industry lawyers behind it and the underlying truth of the problem they’ve identified, if not the remedy to address it.
For more information, you can watch their full anti-CEQA video here, complete with multiple Rev. Martin Luther King, Jr. references:
California’s massive housing shortage relative to population and job growth is only getting worse, and the state’s senate will be examining the issue today at a joint hearing of the Housing and Governance & Finance committees at 1:30pm in the Capitol. I’ll be testifying regarding the link between housing and greenhouse gas emissions.
The hearing comes as the San Francisco Chronicle ran a front page story this morning on the vast number of bills introduced this session to address the crisis. Most of the bills are aimed at high-cost, low-growth, job-rich areas, which are predominantly white and high income, filled with vocal residents who don’t want new growth in their exclusive communities.
Yet if California is to have any hope of reducing greenhouse gas emissions by decreasing driving miles, not to mention addressing the extreme segregation and economic inequality, the state will have to intervene in the face of these restrictive local land use policies.
You can tune in to the hearing and watch live here
Governor Newsom’s “State of the State” speech today offered an abrupt scaling back of the state’s vision for its signature infrastructure project, high speed rail from Los Angeles to San Francisco:
[L]et’s level about high speed rail. I have nothing but respect for Governor Brown’s and Governor Schwarzenegger’s ambitious vision. I share it. And there’s no doubt that our state’s economy and quality of life depend on improving transportation. But let’s be real. The project, as currently planned, would cost too much and take too long. There’s been too little oversight and not enough transparency. Right now, there simply isn’t a path to get from Sacramento to San Diego, let alone from San Francisco to L.A. I wish there were. However, we do have the capacity to complete a high-speed rail link between Merced and Bakersfield.
In some ways, his position is a simple nod to fiscal reality. There aren’t enough funds right now to complete the project beyond this initial phase in the Central Valley anyway. Voters approved roughly $10 billion in bond funding in 2008, the 2009 federal “stimulus” bill offered another $3.5 billion, and Governor Brown and the legislature dedicated about 25% of cap-and-trade auction proceeds to continue building the system.
But that’s not enough to connect the Central Valley portion through the Pacheco Pass into San Jose, where it could then connect to the soon-to-be-electrified Caltrain into San Francisco. And it’s nowhere near the multiple billions of dollars needed to tunnel through the Tehachapi Mountains to connect to Southern California.
The key is the federal government: with Republicans in complete control of Congress from 2011 until last month, they were unwilling to match the state’s investment with federal dollars. While highway projects will get 90-100% funding from the federal government and intracity rail transit will get 50%, high speed rail has gotten just about 15% in federal matching funds — and only from that one-time 2009 stimulus grant.
If California had received closer to a 50% match from the federal government, the rail system would have the money to connect to the Bay Area. That link would provide significant economic benefits for Central Valley cities like Fresno and Merced by connecting them to the prosperous coastal economy. And it would create immediate benefits to bolster the long-term political support needed to eventually extend the system to Southern California.
But Governor Newsom’s speech today shows that he’s unlikely to spend much political capital to fight for these federal dollars from a congress that now features many California representatives, including the speaker, in control of the House of Representatives. It’s a position consistent with his 2014 interview in which he stated he would redirect funds from the system to other infrastructure needs.
Instead, his scaled-back vision presents a message that may confirm critics’ charges that the system is flawed and potentially infeasible. Some also worry that the new plan will embolden more litigants, arguing that the change in project vision violates the terms of that original 2008 bond initiative, although the courts have so far been deferential to state leaders on this question.
High speed rail backers will ultimately need a change in federal leadership come 2021 to get the necessary funds to complete the project — but it looks like they will have only tepid support from the state’s new governor in the meantime.
California’s new governor is coming out firing on housing. First, Gov. Newsom’s proposed budget threatened to deprive cities of gas tax money if they don’t allow more housing to be built. And now today he’s suing Orange County’s Huntington Beach, population 200,000, for lack of compliance with state housing laws.
Technically, he’s not actually filing the lawsuit. Instead, he’s referring the case to the state’s Attorney General, Xavier Becerra, thanks to a relatively new state law, AB 72 (Santiago, 2017), which empowers such a lawsuit to be filed over local government intransigence on housing.
So why the need for the lawsuit? According to the San Francisco Chronicle, NIMBY influence on Huntington Beach’s city council caused the city to fall more than 400 units behind its state targets on housing, after city leaders scaled back approval of a high-density development in 2015. That proposal that would have otherwise allowed the city to comply with its housing target.
According to the state, in the three years since the rejection, the city has “taken no action to bring the housing element into compliance.” The city must now build 533 low-income housing units by the end of 2021 to meet updated state quotas.
In the old days, this lack of compliance would have been met with…nothing. There was essentially no penalty for non-compliance, and even when cities or counties complied, they often negotiated down their requirements to trivial amounts of housing or gamed the system in other ways to avoid having to make meaningful changes to their land use rules. But starting with SB 375 (Steinberg, 2008), which linked transportation funding to compliance, up through AB 72, the state has gotten more serious.
Which brings us to today’s lawsuit. It is a big deal, and not just for the potential impact on Huntington Beach’s land use policies, which will have to change if the suit is successful. More significantly, this lawsuit will be a wake-up call to cities across the state, motivating them to action on housing and also providing political cover for municipal leaders who know they need to do more to allow housing but are fearful (and captured by) their NIMBY constituents.
Furthermore, this probably won’t be the end of the lawsuits. According to the California Department of Housing and Community Development, at least four dozen other California cities also have not received state approval of their housing elements, as of the beginning of the year. Newsom is reportedly considering additional litigation against them.
So we can expect Newsom and Attorney General Becerra to be busy on housing in the coming months and beyond, ushering in a more combative era in the state’s effort to get local governments to allow new homes in their communities.
Governor Newsom is making housing a top priority. His proposed budget devotes significant resources to housing production and homelessness, including:
- $500 million for local governments to address homelessness
- $500 million (from $80 million originally) for the state’s low-income housing tax credit
- $500 million for “moderate-income” housing production
- $25 million for homeless Californians to access federal disability programs
But public cash alone won’t solve the problem, given the scale of the need. Along these lines, Gov. Newsom correctly identified local restrictions on new housing as a key barrier. To address the intransigence, he proposed the revolutionary step of limiting local government access to gas tax funds if the jurisdiction is behind on its housing production.
But how do you define a local jurisdiction “not meeting” housing production? Right now, it’s a bureaucratic threshold, set by the state for each region, which then in turn sets housing targets for each city and county in the region. Historically though, these “regional housing needs allocations” have been weak and easily gamed (though this process will become more stringent going forward, based on recent legislation like AB 686 and AB 72).
So if Gov. Newsom relies on an opaque and uncertain state-derived metric, his policy may not be that effective in actually encouraging new housing production. And cities and counties are somewhat limited anyway in how much housing actually gets built in their jurisdictions, particularly if they’re in areas without much housing demand.
A better metric would involve assessing local zoning and permitting processes near major transit stops or in “low vehicle miles traveled” areas (if a local jurisdiction doesn’t have much transit). Cities and counties can certainly control those two aspects of land use. For example, cities that have upzoned and streamlined permitting near transit would maintain their gas tax funding. Cities and counties that restrict what can be built or require multiple layers of discretionary review would then lose access to dollars.
Sen. Scott Wiener’s proposed SB 50 would get the state far down that path already, but Gov. Newsom’s use of that kind of budget mechanism would add political heft to the approach.
And as an added bonus, it might actually work in encouraging responsible local land use policies to boost housing production in the right places.
It took five years, but California has finally ditched an outdated and counter-productive metric for evaluating transportation impacts under the California Environmental Quality Act (CEQA). With the guidelines finalized on December 28th, a mere half-decade since the passage of SB 743 (Steinberg) in 2013, the state will ditch “auto delay” as a measure of project impacts and instead measure overall driving miles (VMT). You can see the new guidelines Section 15064.3.
It’s a big deal. Now new projects like bike lanes, offices, and housing will be presumed exempt from any transportation analysis whatsoever under CEQA if they are within 1/2 mile of major transit or decrease driving miles over baseline conditions. That means significantly reduced litigation risk and processing time for these badly needed infill projects.
Sprawl projects, meanwhile, will need to account for and mitigate their impacts from dumping more cars on the road for longer driving distances. Berkeley Law’s Center for Law, Energy and the Environment (CLEE) explored one such mitigation option in the form of a VMT “mitigation bank” or exchange in the recent report Implementing SB 743, where developers could pay into a fund to reduce VMT, such as for new transit or bike lane projects.
The one caveat is that due to political pressure, new roadway expansions are exempt from this requirement under the guidelines. It’s unfortunate, but those roadway projects will still need to undertake VMT analysis anyway for climate and air quality impacts, so perhaps they are not as exempt as their backers hoped.
You can learn more about these changes and what they mean going forward at a March 1st conference that CLEE is co-organizing in Los Angeles with the Urban Sustainability Accelerator at Portland State University. Shifting from Maintaining LOS to Reducing VMT: Case Studies of Analysis and Mitigation under CEQA Guidelines Implementing SB 743 will be a professional educational program for land use, transportation and environmental planners and attorneys in public, private and nonprofit practice, presented by expert practitioners.
- When: Friday March 1, 2019
- Where: Offices of the Southern California Association of Governments, Los Angeles
Topics to be discussed include:
- VMT impact analysis (methodology; appropriate tools and models, determining impact area)
- VMT significance thresholds (project effects, cumulative effects)
- VMT significance thresholds (project, cumulative)
- VMT mitigation strategies (project level, programmatic, VMT banks and transaction exchanges, legal and administrative framework)
Space is limited to 70 people to attend in person; registrants can view the program online streaming concurrently or subsequent to the program.
Registration Fees:
- Free Staff of state, regional and local governments sponsoring the SB 743 implementation assistance project and of their member governments (use link below for information about affiliations qualifying for free registration)
- $30 General registration, not seeking professional education credits
- $90 Planners seeking 6 AICP credits* ($15/credit)
- $210 Attorneys seeking 6 MCLE credits* ($35/credit)
*The organizer has accreditation for six hours of California Mandatory Continuing Legal Education (MCLE) credits and is seeking accreditation for six hours of AICP credits.
You can learn more about this conference here and can proceed directly to the online preregistration form here.