What Becomes of California Housing Policy After the Recall Election
Lost in the shuffle of ballots being cast for or against ousting incumbent Governor Gavin Newsom was the fact that in August, after years of failed efforts, the California legislature passed two bills that could shift the way housing gets built in California. Senate bills 9 and 10, which together would functionally eliminate single-family zoning across the state, have been sitting on Newsom’s desk waiting for a signature or a veto.
Now that the election is over, the expectation is that he will sign them, ushering in a long-awaited and controversial change: upzoning for the housing-starved state. SB9 allows homeowners to build duplexes and fourplexes on most residential lots that would have previously been zoned for just one home. SB10 would make it much easier for cities to rezone land for small multi-family projects near public transit and jobs. Together, they would allow for denser housing in a state where more than two-thirds of the land is zoned for single-family homes, and where millions of additional homes are needed to meet demand, according to recent estimates.
“These bills, over time, will create more housing,” says Scott Wiener, the California senator who advanced SB10 and has been a champion for upzoning in the state. “There won’t be an immediate shift. Zoning reform is about planting seeds for the future.”
Although housing advocates are divided over how directly SB9 and 10 will spur development that’s truly affordable, there’s widespread agreement among both factions that a Newsom loss could have stalled progress on alleviating the state’s housing crisis.
When the Democratic governor took office in 2019, he set out a goal of building 3.5 million homes by 2025. Two years and a pandemic later, the state has more than 150,000 unhoused residents, and has made little progress towards that high production goal. But progress has come in other arenas: After repurposing vacant hotel rooms during the pandemic into housing for the homeless, Newsom recently announced plans to invest $12 billion of California’s budget surplus into expanding that program, while investing in permanent homeless housing, homelessness prevention and rental support programs. Another $10.3 billion will go into building affordable housing statewide.
Rob Wiener, the executive director of the California Coalition for Rural Housing, said before the vote that a Newsom loss would have been a death knell for “any kind of affordable housing strategy of substance and any transformational housing policy changes for the next year.” Although Wiener questions the effectiveness of SB9 and 10, he said none of the almost 50 candidates had a housing policy that “really makes any sense and that will make any demonstrable difference.”
Two of Newsom’s highest-profile challengers from the right, radio show host Larry Elder and former San Diego mayor Kevin Faulconer, promised to address homelessness by clearing outdoor homeless encampments and building more homeless shelters. But they had less to say about creating long-term housing opportunities for the unhoused. Elder and Faulconer also opposed reform to single-family zoning on the campaign trail, pledging to keep multi-family developments out of low-density neighborhoods.
With a governor opposed to upzoning in office, state policies like SB9 and SB10 could have been weakened or left unenforced, even if Newsom had signed the legislation in the lame duck period before leaving office, said Matthew Lewis, the director of communications for California YIMBY.
Lewis described a potential “apocalyptic scenario” where a governor like Elder could have been locked in a stalemate with the Democratic supermajority over enforcing such policies. “We would lose time that we don’t have,” he said.
For years, efforts to reform zoning in California have met opposition in the state legislature, and from constituents. Most recently, Senate Bill 50, a proposal championed by Senator Wiener that would have allowed dramatically more multifamily construction near public transit or job centers, failed to pass in 2020 in its third iteration, even as other U.S. cities and states, including cities in California, joined a trend of legalizing denser development.
With the passage of SB9 and SB10, the state legislature has signaled a new appetite for using state powers to achieve zoning changes, says Lewis. While the bills are more modest than their predecessors, they could pave the way for more substantial future zoning changes. The Los Angeles Times editorial board called SB9 a “proof-of-concept bill,” writing that rather than transform whole blocks, “[i]t’s about showing people that adding a little density and a few more homes won’t destroy their neighborhood.”
Meanwhile, familiar concerns are being voiced against SB9 and 10, coming not only from those who are resistant to denser development in their backyards, but from affordable housing advocates who argue that building more housing won’t on its own create opportunities for the lowest-income renters, or the thousands who are currently unhoused. “Our belief is that, yes, we need to produce more homes,” said Lisa Hershey, the executive director of Housing California. But she argues that the bills would mostly help people with “middle or higher incomes” because it doesn’t specifically incentivize affordable housing construction.
Hershey says Housing California has instead supported bills like Assembly Bill 1043, which would create a new category of affordable housing for those making 15% of the area median income or below, and Assembly Bill 1304, which she says would strengthen housing discrimination rules.
Housing is a Human Right, an advocacy group that has been leading the campaign against the bills, commissioned its own poll that indicated that a plurality of respondents are against SB9 and SB10. The group has also run ads emphasizing that 46% of Californians said they would be less likely to support Newsom if he signed the bills. (The methodology of the poll, which had 600 participants and was conducted by David Binder Research, has been contested by California YIMBY.)
“We would like a housing bill that helps people who have no housing first, as opposed to folks who are already housed,” said Susie Shannon, the policy director for Housing is a Human Right. “If you’re going to address the affordable housing crisis, you have to require affordable housing be built, and that has not happened.”
Even those most bullish about upzoning acknowledge it’s not a silver bullet to solve affordability. But advocates for the bills argue that loosening those restrictions is an important tool for increasing supply and improving housing affordability. The ambitious housing production goals set forth by Newsom, and local construction mandates outlined under a planning process called the Regional Housing Needs Allocation (RHNA), will be impossible to meet without these changes, said Lewis.
The impact of SB9, which was introduced by Senate President Pro Tempore Toni Atkins, may be initially modest: In July, UC Berkeley’s Terner Center estimated the bill would enable the creation of around 700,000 that would not otherwise be feasible, and Lewis says that amendments to the bill to introduce owner-occupancy requirements may bring that number down to 620,000. Of those, it’s not certain how many property owners will actually build. But already, similar steps California has taken since 2016 to ease restrictions around the building of accessory dwelling units have spurred a backyard building boom: The state saw a ten-fold increase in ADUs constructed from 2016 to 2019.
Meanwhile, SB10 would allow cities to bypass bureaucratic processes like the California Environmental Quality Act (CEQA) in some cases, and act quickly to densify.
“There are definitely cities that want to zone for more housing. And they struggle because of CEQA. It’s just too lengthy and expensive, and they get sued a lot,” said Wiener, the senator. “They told us they want a more streamlined process. And so I think, over time, we’ll see more and more cities using SB10.”
The recall election put some progressive critics of SB9 and 10 in a difficult position: While they shared Elder’s opposition of zoning reform, they acknowledged that a Republican governor would be devastating for the state’s housing goals.
Shannon said last week that even as she pushes for Newsom to veto the bills, she would be voting no on the recall. “I think the governor is going to be much better for renters and for people who desperately need social services and renter assistance, and stimulus bills and packages, than any of the folks who are running,” she said.
The California Coalition for Rural Housing’s Wiener has doubts that the bills will create enough supply to reduce prices, and worries they will instead push investors or owners to squeeze in more market-rate units. But he has hope that with the recall over, Newsom will be emboldened “to be even more proactive and transformational on housing,” he said. “Hopefully, we’ll see real change, because right now, our housing system in California is totally broken.”
Source: Bloomberg CityLab
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