Let's talk about what the California Legislature has done recently to make housing easier to build.

Bottom line, up front:

This year, there's been four major reforms that have come out of Sacramento so far.  They're pretty good measures which (1) should make it cheaper to build more housing by eliminating mandatory parking near transit (bill AB2097); (2) make more land available to build apartments on by legalizing apartments in commercial zones (bills SB6 and AB2011); (3) putting a measure on the ballot this November where the voters will decide whether to make it easier for the State to fund affordable housing (bill SCA2); and (4) making student housing exempt from the California Environmental Quality Act (Bill SB886).

In the past few years, the big push to fix California's housing crisis has largely shifted from cities and counties to the State Legislature.  This is partly because local governments were the people who got California into this mess in the first place.  The 88 squabbling municipalities of LA County, and the 101 municipalities of the Bay Area, don't actually want to build more housing, even when it's required by law.  The dynamic is pretty toxic.

Since local governments haven't been willing or able to fix the problem they created, this means that Sacramento has had to assume direct control over local zoning.  They legalized granny flats and backyard cottages statewide with a roll of legislation between 2016 and 2019, legalized duplexes statewide last year, and came close to nuking city zoning regulations from orbit in 2019.

Let's jump in.

1 - No more mandatory parking near transit.

The first (and most important) new law, is that the state abolished the mandatory minimum parking requirement near Metro stations and other places with good transit.  You can build as little or as much as you like, as long as it's within half a mile of transit.

So? Parking lots. Who cares?

This is a big fucking deal.  This is because until now, most cities legally required excessive amounts of parking to be built with any new development, whether it's residential or commercial.  (A good example of the bad old days is the Beverly Center mall in LA, which is 3 1/2 stories of shopping and 4 1/2 stories of garage.)

No joke, if you get into the weeds, the amount of parking required is pretty cray.  (I'm going to pull this from LA County's zoning rules, LA County Code of Ordinances 22.112.070 - the percentages will vary depending on your jurisdiction.)  Most commercial areas require 1 parking space for every 250 square feet; office buildings are required to build 1 parking space for every 400 square feet of space.  A pretty typical parking garage requires 350-400 square feet per car, because you have to provide access into and out of the garage.  So, the baseline rule is that most commercial buildings need to be 62% parking by square footage, while office buildings have to be 50% parking by square footage.  

Housing has similar mandatory parking rules - one parking space per bachelor, two spaces per two-bedroom, and so on.  My old apartment building in K-town, built around 1990, was two stories of garage, for four stories of apartments.

This shit is expensive as hell to build.  If you build a typical 1200 square foot apartment with one space per unit, it raises the cost of a new unit by 6% versus no parking; if you have to build two spaces, it increases the cost by 16%.  Given that the average LA County home is selling for about $950k... yeah, we're talking real money here.

But don't most people use both parking spaces?

No. Not reflected by the data. I'm going to go to actual data here.  I don't have LA figures because nobody's gathered the data, but I think Santa Clara County in the Bay Area is a good approximation of LA's postwar sprawl.  In Santa Clara County, the average amount of parking people *actually* use is about ~1 off-street spaces per housing unit, and about one in four parking spaces goes unused. (I've drawn the figures from the Center for Neighborhood Technology, which did a great job on this.)

For those of you who are freaking out: San Francisco abolished its minimum parking law citywide in 2018;  Sacramento abolished the minimum parking law citywide in 2021; San Diego abolished the minimum parking law near transit in 2019, and expanded it in 2022.  It hasn't been the end of the world, because developers can and do still build parking - they just build less of it.

Okay, but so what does the Legislature's bill do, then?

If you're within 1/2 mile of good transit - train stations and high-frequency bus lines like the F (Orange) Line in the San Fernando Valley - a developer can build as much or as little parking as the market demands. After all, if you're building an apartment building or an office next to a train station, it doesn't make sense to make it 50% parking lot. This was the norm before World War II, when they built places like Santa Monica, Berkeley, and Pasadena, and so it represents a little bit of back to the future.

2 - Apartments legalized in commercial zones.

The other big achievement of this year is that the Legislature has finally legalized residential construction in commercial zones statewide. Many places don't allow you to build apartments over stores, as is the norm on the East Coast and in Europe.  All that went out the window, and good riddance.

There were two bills here, and it was a serious question as to whether these reforms would pass for a while.

Wait, why?

Well, it's because different lobbies supported different reforms.

The first bill, AB2011, offered a simple tradeoff: if you pay prevailing wage (i.e., union-equivalent wages), and make a portion of new units rent-controlled, then you can build apartments in commercial zones on major roads.  You're also exempt from the California Environmental Quality Act (CEQA).  If this plan works, you'll see apartment buildings getting built in strip mall parking lots.  AB2011 was backed by the carpenters' union and affordable housing developers - and of course this led to a bunch of infighting in Sacramento, because...

The second bill, SB6, was backed by the rest of the construction unions and the California Labor Federation.  It takes a different tack: it allows apartments on all commercial- and office-zoned parcels, regardless of the local zoning, if you use union labor (or pay prevailing wage).  But you still have to deal with CEQA, and there is no requirement to make anything rent-controlled.

For months these two sides were at a standoff, and threatened to kill the whole thing entirely.  After months of this bullshit, the Legislature just said, fuck it, why not both?

3 - Streamlining the process to build new public housing.

The California Constitution has a section called Article 34, which requires a citywide vote to fund any new public housing. It's the only state which has this requirement. The text of Article 34 is simple:

"No low rent housing project shall hereafter be developed, constructed, or acquired in any manner by any state public body until, a majority of the qualified electors of the city, town or county, as the case may be, in which it is proposed to develop, construct, or acquire the same, voting upon such issue, approve such project by voting in favor thereof at an election to be held for that purpose, or at any general or special election."
 

That is: if you want more public housing, you have to have a citywide vote to approve it.  This requirement was created because the federal government banned segregation in public housing in 1949.  There was a ballot proposition and everything. Partly it's because Californians were afraid of black people and poor people moving in nearby, but it's also because it was the McCarthy era, and people were afraid of looking socialistic.  The argument against Article 34, made by LA Mayor Fletcher Bowron and others, was pretty straightforward: it was an attempt to get rid of public housing by burying it in red tape.

So what happened next?

Article 34 won at the ballot box, and the results were pretty much what you'd expect: about half of new proposed public housing was rejected outright by the electorate.  The most famous of these housing referenda was the one in LA City in 1952, which was to build apartments in Elysian Park, among other things.  There, the voters got rid of Mayor Fletcher Bowron, voted down the new housing as socialistic, and instead brought in Norris Poulsen, who used the still-vacant land to lure the Dodgers over from Brooklyn.

The Legislature and the courts later clarified that California's governments can fund 49% of a projects without triggering Article 34, and both the State and local governments do fund a bunch of new housing through this loophole.  Similarly, some cities like San Francisco and LA have a periodic ballot proposition approving a particular amount of new affordable housing.  But it's had a chilling effect on affordable housing production, and it makes it harder to build affordable housing at scale.

Why does it matter? Private affordable housing developers still build new apartments, right?

Well, affordable housing developers are operating at a far smaller scale than the gov does, and there's a TON of strings attached to state funding. The extra legal and compliance costs mean you get far less for your buck - the California Coalition of Governments estimates that it adds up to 15% to the cost of each new unit.

This is a huge missed opportunity.  Because the State is actually really good at building quality housing, at massive scale, at competitive prices.  UCLA is currently spending an enormous amount of money to build enough apartments for all undergrad, grad students, and faculty. This university housing is not fancy - no Viking ranges or anything - but it's modern, competently built at a reasonable cost, and basically sound.

Wait, is the gov going to get involved in building public housing again? I remember the projects from the bad old days.

Personally, I think Article 34 repeal is more symbolic than anything at this stage, since there's not much political will at the moment to have the gov build new housing directly.  Everyone remembers the projects.  

That said, public housing doesn't have to suck. In Singapore, the vast majority of residents live in public housing complexes and the program is pretty universally lauded.  There are fairly serious proposals to do the same in the US, like the Hawaii ALOHA Act.  The gist of the ALOHA proposal is that the gov would build apartment buildings on state-owned land near train stations, sell them to the public at low rates, require owner occupancy, and take a 75% cut of any profits if the apartment appreciates in value.  A couple state legislators have proposed things like this in California, but only time will tell if there will be political momentum for this.

OK, so what comes next?

There's going to be a ballot proposition in November, and you can vote yes or no.  If it passes, it'll get marginally cheaper to build new affordable housing funded by the State, and the State can build housing on its own initiative.

4 - Student housing is now exempt from the California Environmental Quality Act.

The backstory of this is that there's a state law called the California Environmental Quality Act (CEQA), which requires the gov (and many private entities) to study the environmental impacts of decisions before shovels get put in the ground.  In practice, anybody can file a CEQA lawsuit, forcing city councils, developers, and nonprofits to put their plans on ice.  Abuse of the system is rife, as half of California's new housing faces CEQA lawsuits, usually by nosy neighbors, but also sometimes by unions who want work for their members.  

One of these CEQA lawsuits was filed by the nosy neighbors in Berkeley in NorCal, who wanted Cal to freeze its enrollment because it hadn't studied the effects of more students moving to Berkeley.  The courts agreed, forcing Cal to issue conditional acceptance letters until the Legislature stepped in to exempt student housing from CEQA. Congratulations, high school senior, you can go to Cal after all.  Go Bears.

OK, so what?  They fixed it.  Problem solved, right?

Well, most people don't think this Berkeley thing is a big deal in the grand scheme of things.  But this is part of a larger pattern of chipping away at CEQA lawsuits' ability to stop new housing and transit projects from going forward.  Mass transit projects are a favorite CEQA target, as well, and the Legislature's response was to exempt bike, transit, and pedestrian projects from CEQA entirely.  It's a sort of death by a thousand cuts for the California Environmental Quality Act, and it's one that I never thought I would have seen in my lifetime.

Honestly, it's something that's long overdue.  Our problems in the 21st century are global warming, fires, and a housing crisis, not people building factories in critical habitat.

~~~

The housing crisis sucks, but it's not as though the Legislature is doing nothing.  They're passing laws for less parking and more housing; more apartments replacing strip malls; they're putting Article 34 repeal on the ballot; creating more CEQA exemptions for student housing.  On top of that, the Legislature has shown an unusual willingness to getting involved in areas which are traditionally the realm of local government because local authorities have screwed the pooch so badly.

But I would caution about expecting to see progress overnight.  This is an issue that took fifty years to get into, and it'll take another decade at least to get us out of it.


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