Big Day for California Housing On Tuesday
An overview of the politics surrounding big zoning laws headed for committee tomorrow.
Disclaimer: The opinions expressed in this article represent only myself. It does not represent the opinions of my employer or any organization, university and institution I’m affiliated with or my employer is affiliated with. It does not represent the opinions of any public commission I sit on. I’m not making any formal endorsements.
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California has a major slate of housing law that’ll significantly push housing production this session and dramatically transform the state. There are three major proposed bills that have caught my eye. The first is Senate Bill 79, authored by state senator Scott Wiener (D - San Francisco), which is his fourth attempt at a transit-upzoning bill. SB 79 would re-zone areas around “high quality” transit stops, primarily rail stations, to allow for 6 - 7 story apartments within a quarter-mile of a major transit stations and 4 - 6 stories within a half-mile. The bill also removes a legal constraint on public transit agencies by allowing them to develop high-density housing and commercial properties on their public property with few restrictions. This is how East Asian countries approach mass transportation and it would provide alternative revenue for public transit by not leaving them dependent on fares and taxes for operations exclusively.
The other notable bill is Senate Bill 607, also authored by Wiener, which functionally exempts nearly all infill sites (meaning areas already developed) from CEQA lawsuits where the proposed project is housing, public transit and green energy related. By default, it declares these things in infill locations as inherently a climate and environmental good. Usage of CEQA to delay housing, green energy and transportation projects by NIMBYs in California was repeatedly cited in Derek Thompson and Ezra Klein’s “Abundance” book. CEQA is also used by the Building Trades to negotiate with non-profit and for-profit developers to use their labor or risk litigation. The last bill is Assembly Bill 647, authored by Assemblymembers Buffy Wicks (D - Oakland) and Mark González ( D - Los Angeles), which would legalize 2-8 unit homes on every owner-occupied parcel in California with 1 low income unit required. This bill will not be at the Senate Housing committee hearing on Tuesday since it’s an Assembly bill, but its significance is worth putting on your radar.
Last week, an op-ed at the San Francisco Chronicle started a lot of discussion over state senator Aisha Wahab, representing the Hayward - Fremont - San Jose area, being appointed chair of the powerful Senate Housing committee. The opinion piece highlighted how Wahab made comments critical of the state’s growing support for housing streamlining and upzoning. Among these comments were that California should look at reducing demand and not just encouraging housing supply, and that laws which ended parking mandates at transit-oriented developments went too far. She made these comments at the first committee hearing and then published them on Instagram.
Aisha Wahab is pretty smart and I don’t think she’s a housing skeptic as pro-growth advocates are worried about. Her comments are rather mixed and it seems like she’s trying to channel multiple sides of the housing argument, although she’ll definitely need to see support especially from Alameda and Santa Clara county supporters of SB 79 and 607. Wahab was endorsed by urbanist groups for state senate but she’s allied with anti-poverty legal groups who do not like the state’s direction in reducing the cost of home construction and streamlining for ideological reasons. I don’t know how much of her statements are highlighting those group’s opinions versus her beliefs on housing. It’s worth noting that she did vote in favor of the major permit streamlining bill SB 423.
The Housing Committee this year is staffed by a decent amount of folks with quite mixed views on housing. These appointments were done by Mike McGuire (D - Marin and Sonoma County). In the battle for SB 79’s earliest predecessor, Mike McGuire had a provision inserted that functionally exempted his home of Marin County from being affected by the upzonings, which likely contributed to the bill’s failure.
The prospects of these ambitious housing laws making it through the Housing Committee have gotten a bit grim in light of the committee staff report on SB 79. The staff report essentially denigrates both the law and the broader concept of transit-oriented development. Here’s an example excerpt of their diagnosis on SB 79:
The committee may wish to consider the implications of granting significant benefits to developers which could result in few, if any, new affordable housing units.
Considering SB 79 just defaults to local inclusionary requirements for which most expensive cities already have high percentages of affordable units mandated, this is remarkably loaded language by staff. The consultants repeat many quotations from SB 79 opposing advocacy groups disapproving of no statewide affordability requirements on top of local ones, but cite no studies on how effective those requirements are at building subsidized housing. The only research they quote is an unstated organization’s misunderstanding of Karen Chapple’s study on migration patterns, implying affordability mandates in market-rate complexes alleviate displacement pressure when the study does not support that claim.
The consultants wrote zero positive insights about transit oriented development or S.B. 79 from the bill’s many supporters and ignored the bulk of housing research on these issues. Bill analysis reports are written by consultants who get some implied directional guidance on what to prioritize by who chairs the committee. The same consultants wrote a considerably more positive report on commercial corridor upzoning in 2022 because the Assembly Housing Committee chair wrote the bill. The staff report may indicate Wahab’s issues with SB 79 and this probably means that absent major outcry from the bills supporters (i.e. the Carpenters Union, YIMBY groups, student groups, transit groups, and people calling in), SB 79 is liable to get snuffed or challenged in committee.
Death by committee was the fate of SB 79’s predecessor, SB 50, when Assembly Appropriations chair Anthony Portantino unapologetically refused to hold a vote on it in 2019. Portantino had alternatively proposed to create car license plates with “housing crisis awareness” on them. Although California’s political zeitgeist was much more frightened by upzoning back then compared to today, license plates slogans over actual proposals was still so baffling to reporters and commentators that Portantino’s legacy is mostly remembered on how he killed SB 50.
The situation in Sacramento today is much different than in 2019. The state has begun passing streamlining laws and zoning reforms with no political blowback as was once feared. After Trump’s 2024 victory, Democrats both at the state and federal level are looking at the grim projections of California’s housing shortage ceding more population to red states, who are rapidly out-building California in homes, which will cause the Democrats to be locked out of the presidency after 2030. This and the devastating fires in Los Angeles explains why so many major housing bills have been introduced this session, and why the stakes are high in the Housing Committee hearing on Tuesday.
With national pressure on California, state legislators are beginning to take this situation seriously and that’s reflected by AB 647, the 8-unit statewide law. What’s unique about this law is that co-authoring it with zoning trailblazer Buffy Wicks (D - Oakland) is Assemblymember Mark Gonzalez (D - Los Angeles), who is the former chair of the Los Angeles County Democratic Party and a former presidential elector of the Electoral College. His co-authoring is a major deal since historically Los Angeles legislators are the most antagonistic to state housing laws due to L.A.’s cultural disposition for single-family suburbanism. Gonzalez’s authoring of such a major law means L.A. legislators are probably thawing in favor of more home construction after years of fighting against the more pro-growth Bay Area represenatives.
I suspect L.A.’s evolution is fueled not only by the overall cultural evolution on housing but the devastating L.A. fires that have wiped out thousands of single-family and apartment housing units, putting an unbelievable squeeze on greater L.A.’s housing market. Los Angeles County is reaching San Francisco and Manhattan prices despite having a median household income of about $87,000. The fact that only 4 (four) housing permits have been issued in Pacific Palisades since the fires has drawn global ridicule and Angeleno legislators are upset.
The opposition of Senate Bill 79 is are the same groups who usually oppose zoning reform, with the only surprise being the Nonprofit Housing Association of Northern California, the lobby group for low income housing developers. Low income housing developers are ordinarily supportive of upzoning laws. Their basis for opposition appears to be that SB 79 allows transit agencies to build commercial and market-rate apartments on public transit property without having to first prioritize low-income housing.
SB 79 does this because it’s based off East Asian transit systems, such as Japan Railway (JR) or Hong Kong MTR, which develop housing and commercial on station property and funnel that revenue into transit operations. These are the world’s most successful and frequent mass transit agencies but this is quite a foreign concept to Californians as indicated by the staff report’s bewilderment at why SB 79 doesn’t mandate transit property for subsidized housing. Subsidized housing pays no property tax and generates no significant revenue for public transit agencies. (I already talked about this though.) The nonprofit housers’ concerns that they would be priced out by market-rate developers doesn’t make much sense because public transit agencies aren’t selling their land and many of them like Muni, BART and LA Metro already require low income housing on their properties.
It’s possible SB 79 could be amended to mandate some statewide affordability requirement for public transit properties. That would make the nonprofit housers happy and put them in the support column. This could reduce the fiscal solvency of public transit agencies, but at this point most transit agencies already prioritize subsidized housing on their properties first and it doesn’t proclude revenue generating projects alongside subsidized housing. What should be avoided is a statewide inclusionary requirement for all projections within a half-mile radius that fails to consider different markets and their existing affordability mandates. Much like tariffs, blanket high taxes on housing usually results in nothing getting built except higher prices for the consumers.
There isn’t much or any upside in the Housing Committee killing or poison pilling these laws, especially if a lot of media and the public is paying attention on Tuesday. If they don’t advance the bill out of committee then not only will they get backlash in California but throughout the nation. The “Abundance Movement” which has gone viral among Democrats nationally has primarily focused on California’s housing shortage as the worst shortcomings of the American liberal project. Governor Gavin Newsom and his presidential ambitions has been confronted over his state’s inability to build homes and he’ll look pretty bad if these bills die on his watch. More focus should be on Governor Newsom whose happy to concede California’s greatest issue is housing, yet has stayed out of endorsing any legislation with his powerful bully pulpit.
If SB 79 or other major housing laws does get neutered on Tuesday it’s definitely because a majority of the Housing Committee personally wanted it and not because of political pressure by their constituents. I’m sure she’s getting pressure but there’s just no political upside to Senate Housing chair Aisha Wahab killing these bills. Political groups in Southern Alameda County and the South Bay which Wahab represents just don’t care about state zoning reform or are supportive. I say that as a former Hayward and Fremont resident. A candidate just ran against rolling back high-density housing in Fremont and barely won a single precinct. Hayward city council has been advancing transit-oriented housing without controversy and developed its two BART station areas decades before most Bay Area cities did. Santa Clara’s transit agency is redeveloping all the future BART stations for high density housing and would benefit from SB 79 upzoning around their struggling light-rail lines deep in San Jose suburbs.
Assemblymember Alex Lee the youngest socialist assemblymember representing Fremont/North San Jose has consistently wanted a major transit upzoning bill. Liz Ortega of Hayward was endorsed by California YIMBY and got equal support in donations from both the pro-streamlining Carpenters Union and the anti-streamlining State Building Trades. Congressman Ro Khanna of the South Bay Area got on Twitter last week asking Aisha Wahab to pass SB 79 this Tuesday. Ironically, the authors of these major zoning bills like Scott Wiener (D - San Francisco), Buffy Wicks (D - Oakland/Berkeley) and Mark Gonzalez (D - Central L.A. City / Boyle Heights/ Koreatown etc.) all live in districts where the housing politics is way more polarized than the committee chair’s.
So will California make 2025 the year for big housing reform and reverse their doomed presidential electoral map? We’ll find out on Tuesday and you can watch here. I think Wahab’s committee will advance most of these bills including SB 79, however the bills might be transformed dramatically in committee. The biggest obstacle to these bills is the Building Trade’s opposition to streamlining, as many Housing Committee members won their elections with strong endorsements by the Trades.
If you have an opinion on SB 79 or 607, you can call or message the Senate Housing Committee yourself. For AB 647, you can contact the Assembly Housing Committee although chair Matt Haney (D - San Francisco) is very much an pro-housing legislator. Considering how evenly stacked the Support and Opposition list is, many members will probably swing based on who contacts them the most on Monday (i.e. the day this is published) and Tuesday.
