California Senate Bill 50: SB 827 Redux

Scott Wiener

California Senator Scott Wiener introduced on December 3, 2018, Senate Bill 827 Redux, as promised. This time around the bill is called Senate Bill 50.

SB 827, Planning and Zoning: Transit-rich Housing Bonus, was rejected earlier this year at its first committee hearing for being too aggressive, for not offering enough protections against displacement of old-time residents, and for being a venue primarily for the kind of luxury housing that affords developers maximum return on their investment. Also, voters who prefer that each neighborhood or local jurisdiction develop its own land-use plans, objected to SB 827’s contention that housing is a matter of state-wide concern requiring state intervention. Senator Wiener was not deterred by defeat of SB 827, and promised a redux, which he delivered on December 3 under the name of SB 50.

As in the case of SB 827, SB 50 is sponsored by California YIMBY. The bill includes wording that could protect existing tenants and that could ensure new dense housing is not limited to lower-income neighborhoods. The bill also contains labor wage protections. Such wording makes SB 50 less perturbing to neighborhood, tenants, and labor advocates.

However, nothing in the bill changes the basic premise contained in SB 827 and other recent housing bills: copious amounts of housing must be built, and local jurisdictions have little or no say as to the amount and location of such housing. Also, nothing in the bill changes, or could possibly change, facts of the market: as everyone else, developers want to derive maximum return from their investment, commensurate with their ability to do so. High-end market-rate housing in the Bay Area is very profitable.

As is the case with current housing legislation, SB 50 suffers from – or enjoys, depending on point of view – extreme micromanagement. There are eligible developments (and by extension ineligible ones), and eligible developments are described meticulously.

Apparently, SB 50 was introduced on December 3 as a work in progress, since requirements for percentage of units affordable to middle, low, and very low income residents are not specifically defined in the bill. Perhaps this lack of definition was intended to allow for negotiation with interested parties until the time the bill is schedule for action on January 3, 2019.

The Basics of SB 50

The bill would require a city or county to grant “equitable communities incentive” to developers who propose construction of residential housing that meets specific criteria, such as:

* Location in a “transit-rich” area. The residential development must be located within a one-half mile radius of a major transit stop or a one-quarter mile radius of a stop on a high-quality bus corridor.

* Location in a “job-rich area.” The residential development must be within an area identified by the Department of Housing and Community Development and the Office of Planning and Research as an area of high opportunity close to jobs, based on indicators such as proximity to jobs, high area median income relative to the relevant region, and high-quality public schools.

* The site does not contain or has not contained housing occupied by tenants within the seven years preceding the date of a developer’s application to build new housing on the site.

* The site does not contain parcels on which an owner of residential property has exercised his or her rights under the Ellis Act (Chapter 12.75, Sec 7060-, Div 7 of Title 1) to withdraw accommodations from rent or lease within 15 years prior to the date of a developer’s application to build new housing on the site.

* The residential development complies with all applicable labor, construction employment, and wage standards required by law.

* The residential development complies with requirements regarding the approval process and the California Environmental Quality Act.

Equitable communities incentive goes beyond density bonus, and includes developer incentives such as:

* Waiver from maximum controls on density.

* Waiver from maximum automobile parking requirements greater than 0.5 automobile parking spots per unit.

Eligible residential development located within a one-half mile radius, but outside a one-quarter mile radius, of a major transit stop and includes no less than ____ percent affordable housing units shall receive additional waivers:

* Waiver from maximum high requirements less than 45 feet.

* Waiver from maximum floor area ratio requirements less than 2.5.

Eligible residential development located within a one-quarter mile radius of a major transit and includes no less than ____ percent affordable housing units shall receive additional waivers:

* Waiver from maximum height requirements less than 55 feet.

* Waiver from maximum floor area ratio requirements less than 3.25.

If passed, all clauses of this bill will become law. However, the bill allows for “sensitive communities,” i.e., residents vulnerable to displacement, to delay implementation until July 1, 2020, if such communities devise plans that meet community needs but accomplish the same objectives of SB 50. The bill also allows local jurisdictions to opt for a community-led planning process aimed toward increasing residential density and multifamily housing choices near transit stops that abides by the minimum standards set forth in SB 50.

Incentives and Activist Fatigue

Backlash against SB 827 was intense and sustained. Whether SB 50, which contains essentially the same core provisions of SB 827, succeeds where SB 827 failed could be the result of Senator Wiener’s inclusion of what he views as increased tenant protections, or the result of activist fatigue.