Gov. Jerry Brown has proposed sweeping statewide legislation that would allow new market-rate projects with onsite affordable housing to be approved “as of right,” in potentially California’s most significant housing policy change in years.
The proposal has big ramifications for the Bay Area, where many cities and well-organized residents’ groups have long fought residential development.
The trailing legislation to the state’s 2016-2017 budget would require state assembly and senate approval. Under the proposal, new projects with 20 percent affordable housing for tenants making no more than 80 percent of the area median income or projects with 10 percent affordable housing near transit would be exempt from most local reviews.
That would be a sharp break from the current policy of most Bay Area cities, including San Francisco, where each new housing project is subject to discretionary review and usually takes years for approval.
The move is a major step after Brown has been criticized by affordable housing advocates for ignoring, or even obstructing funding for affordable housing. In 2011, Browneliminated Redevelopment Agencies, which were the biggest source of funding for affordable housing, and last year he vetoed bills that would have provided more funding. Both steps were to improve the state’s finances, he said.
The new measure is consistent with Brown’s fiscal conservatism, as no new funding for affordable housing is proposed. But Brown is taking a significant step to reduce the approvals process for new projects, despite previously saying that potential change was limited.
Brown gave a speech at the Urban Land Institute last October, where he acknowledged flaws in the state’s California Environmental Quality Act, which has been used to sue projects because of so-called environmental concerns after they’ve been approved.
But he said at the time that major reforms were unlikely and that opposition to new projects was just a fact of life. When Brown was mayor of Oakland, “every Oakland project I proposed was opposed at City Council by one group of neighbors or activists,” he said last October.
With indications that businesses and residents are fleeing the state in part because of high housing costs and the state’s Legislative Analyst Office blaming excessive restrictions on development for the affordability crisis, Brown feels the need to act, said members of his staff.
“The general idea is if you want some assisted housing, you’re going to have to reduce some of the regulatory burdens that are faced by developers,” Brown said at a news conference last week.
“It’s really not just a social and economic justice issue. it’s really about the state of California’s economic competitiveness,” said Ben Metcalf, director of the state’s Department of Housing and Community Development. There isn’t enough state funding to subsidize enough affordable housing to meet needs, so the government has to do more to promote supply, said Metcalf.
Some affordable housing projects that do get funding also still draw opposition, said Metcalf, underscoring the need for reforms. “There are just too many examples of projects that suck up hundreds of thousands of dollars, if not millions” and take years to approve, said Metcalf.
The proposal would prevent cities from requiring conditional use permits, planned unit development permits or other discretionary review for new projects with affordable housing. But projects would have to be consistent with local general plans and zoning, meaning that height and density restrictions would remain. Units would be required to remain affordable for at least 30 years to take advantage of the exemption.
If past housing policy battles are any indication, there will likely be a fight over the proposed policy changes. Potential opponents to the legislation include environmental groups, community coalitions that have previously opposed development and supporters of local power over land use.
San Francisco has already seen a strong backlash against a modified version of the state’s density bonus program, which grants additional height to projects with more affordable units.
The League of California Cities has opposed other housing bills that reduce local authority over land use and while it hasn’t taken an official stance on Brown’s proposal, the group is now examining it and has concerns.
“We support local decision-making,” said Dan Carrigg, legislative director of the League of California Cities. “When you have one of these one-size-fits all policies … sometimes what works in one spot doesn’t work well in another.”
The bill has supporters in the state assembly and senate, said Metcalf. Local Bay Area groups are also voicing early support. The Bay Area Council, the region’s largest business group, said the proposal was an important step towards providing more housing supply.
“The Governor’s proposals reflect that he understands California’s housing crisis is reaching new and painful heights. Far from a reversal, the Governor’s proposals appear to represent an appropriate escalation and expansion of his thinking and approaches for addressing the state’s housing shortage,” said Rufus Jeffris, spokesman for the Bay Area Council.
“No one is looking for a battle. We’re looking for solutions. Residents here and throughout the state are desperate for housing that they can afford,” said Jeffris.
Other housing advocates are also behind the change.
“I think it’s great,” said Sonja Trauss, founder of the pro-development San Francisco Bay Area Renters Federation. The group has sued Lafayette over allegedly violating the state’s Housing Accountability Act and Trauss said it would be ready to defend the new measure if it passes. “We’re ready to go. We can file these lawsuits,” said Trauss.
Tim Colen, executive director of the San Francisco Housing Action Coalition, which typically supports more dense housing near transit, called the proposal “very, very exciting.”
A vote on the bill is expected by the budget deadline of June 15, although past trailing bills have been deferred until end of the legislative session, which is Aug. 31 this year.