Gov. Gavin Newson signed more than 800 bills into law by the Oct. 13 deadline. Of those, 18 are designed specifically to increase housing production.
That may not sound like a lot, but these new laws could change the way developments are approved, shifting much control away from local governments.
He also signed legislation funding services for vulnerable homeowners, and strengthening tenants’ rights, including statewide rent control.
“Since taking office in January, my administration has been urgently focused on California’s housing affordability crisis,” Newsom said in a statement released by the governor’s office. “The high cost of housing and rent is putting the squeeze on family budgets, and our housing shortage threatens our economic growth and long-term prosperity.
“In 2019, California has taken urgent action to address this challenge. We’ve invested more in new housing than at any point in our history, and we have created powerful new tools to incentivize housing production. Now we are removing some key local barriers to housing production. This crisis has been more than a half century in the making, and this administration is just getting started on solutions.”
California’s housing shortage has been estimated at 3 to 4 million units, and approvals for new construction are down 12% from last year, in part because many developers are skittish about the near-term economic forecast.
But many contend development is also hampered by overregulation and local slow-growth policies, which this new legislation seeks to upend by removing such barriers to new large-scale development and encouraging the building of accessory dwelling units, also known as ADUs, in-law units or “granny flats.”
According to the governor’s office, new laws intended to encourage housing development include:
• SB 330. Establishes the Housing Crisis Act of 2019, which aims to streamline permitting and approval processes, ensuring no net loss in zoning capacity, and limits fees after projects are approved. The law limits “downzoning,” or reducing the number of units permitted on a particular space. This means, for example, a local jurisdiction cannot limit construction to single-family homes on lots that were previously zoned for multi-unit buildings. It also limits cities’ ability to impose new building standards that would increase construction costs. The bill is set to expire in 2025, unless renewed by the legislature.
• AB 1763. Gives enhanced density bonuses to developments that are 100% affordable housing.
• AB 116. Removes the requirement that Enhanced Infrastructure Financing Districts receive voter approval prior to issuing bonds.
• AB 1485. Builds on an existing environmental streamlining law and encourages moderate-income housing production.
• AB 1255. Requires cities and counties to report to the state an inventory of its surplus lands in urbanized areas, and to include this information in a digitized inventory of state surplus land sites.
• AB 1486. Expands Surplus Land Act requirements for local agencies, requires local governments to include specified information relating to surplus lands in their housing elements and annual progress reports, and requires the state Department of Housing and Community Development to establish a database of surplus lands, as specified.
• SB 6. Requires the state to create a public inventory of local sites suitable for residential development, along with state surplus lands.
• AB 1483 by Assemblymember Tim Grayson (D-Concord). Requires local jurisdictions to publicly share information about zoning ordinances, development standards, fees, exactions and affordability requirements. The bill also requires the Department of Housing and Community Development to develop and update a 10-year housing data strategy.
• AB 1010. Allows duly constituted governing bodies of a Native American reservation or Rancheria to become eligible applicants to participate in affordable housing programs.
• AB 1743. Expands the properties that are exempt from community facility district taxes to include properties that qualify for the property tax welfare exemption, and limits the ability of local agencies to reject housing projects because they qualify for the exemption.
• SB 196. Enacts a new welfare exemption from property tax for property owned by a Community Land Trust, and makes other changes regarding property tax assessments of property subject to contracts with CLTs.
• SB 751. Creates the San Gabriel Valley Regional Housing Trust to finance affordable housing projects for homeless and low-income populations and address the homelessness crisis in the region.
New laws encouraging the construction of accessory dwelling units include:
• MAB 68. Reduces barriers to ADU approval and construction.
• AB 881. Restricts local jurisdictions’ permitting criteria, clarifying that ADUs must receive streamlined approval if constructed in existing garages, and eliminating local agencies’ ability to require owner-occupancy for five years.
• AB 587. Provides a narrow exemption for affordable housing organizations to sell deed-restricted land to eligible low-income homeowners.
• SB 13. Creates a tiered fee structure which charges ADUs based on their size and location. The bill also lowers the application approval timeframe, creating an avenue to get unpermitted ADUs up to code, and enhances an enforcement mechanism allowing the state to ensure that localities are following ADU statute.
• AB 671. Requires local governments’ housing plans to encourage affordable ADU rentals and requires the state to develop a list of state grants and financial incentives for affordable ADUs.
In addition, the governor signed SB 113 to restore $331 million in state funds to the National Mortgage Special Deposit Fund, which had been diverted to pay down state debt.
The state Supreme Court had ordered the transfer of that money from the general fund into the special deposit fund.
The special deposit fund was established through a 2012 settlement with the nation’s five largest banks, negotiated by then-California Attorney General Kamala Harris in the wake of the housing crisis in which millions of homeowners lost their property due to delinquencies and foreclosure.
It provides counseling, legal assistance, fraud prevention services and other services for vulnerable homeowners and renters.
For more information about real estate matters, contact your local Realtor today.
Cher Wollard is a Realtor with Berkshire Hathaway HomeServices Drysdale Properties in Livermore.