On September 28, 2022, Governor Gavin Newsom (D-CA) signed two new bills into law, both aimed at addressing housing affordability.
The New Laws
The Affordable Housing and High Roads Jobs Act of 2022 will simplify processes and reduce barriers to multifamily development in areas zoned for commercial, retail or parking use, and make development a use by right. A project hoping to utilize the streamlined review processes contained within this law must dedicate 100 percent of the units as affordable to lower-income households as defined in the state code, excluding managers’ units.
Notably, the law prohibits a local government from imposing additional requirements or fees on the project should it follow the specified, streamlined review process. The law also includes labor and wage standards, clarifies which areas are eligible for relevant development, and sets certain other development criteria.
Similarly, the Middle Class Housing Act of 2022 makes housing development an allowable use on a parcel zoned for office, retail or parking. This law, however, does not include an affordability requirement but specifies additional requirements for the project to proceed, including some relating to density, wages, and sustainability.
Gov. Newsom also signed into law a bill that would prohibit minimum parking requirements for certain types of residential development.
Policy Analysis
“Not in my backyard” (NIMBY) attitudes have been ever-present in many local communities that torpedo multifamily development in their towns, often while acknowledging that more housing is needed regionally. Multifamily developers can face insurmountable opposition, regulation and fees from local governments which increase the cost of housing or otherwise, make the project infeasible. In fact, it’s estimated that government regulation accounts for 40 percent of the cost of developing multifamily housing.
These recent California laws appear to have sprung from the corresponding “Yes in my backyard” (YIMBY) movement, which hopes to ensure that all local jurisdictions participate fairly in the effort to create more desperately needed homes. By reducing fees and regulations, streamlining the permitting process and providing more potential lots for residential use, the laws may be a step in the right direction.
For more information on affordable housing and development, please contact Ben Harrold, NAA’s Manager of Public Policy.