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SB 35’s Proposed Bureaucracy May Not Result in Much Affordable Housing

May 5, 2017
The notion that cities are the major impediment to the state’s current housing production challenges is the underlying rationale behind SB 35 (Wiener), one of the bills moving in the Legislature this year. 
 
However, the measure’s proposed solution will likely result in more bureaucratic activity than additional housing.

SB 35’s approach is very simple and crafted so it will be easy for the state officials to administer: state demographers estimate the state’s annual housing needs across various income (low, very-low, moderate, etc.) categories with specific allocations assigned to individual cities and counties; state officials will then closely monitor each city and county’s housing approvals; if state officials determine that a city or county is not approving housing each year at its assigned level that means it is the local government’s fault and as a penalty it loses community control over certain housing approvals and environmental review.
 
For example: a city is allocated regional housing need numbers that include 1,000 units of moderate-income housing, 500 units of lower income, and 300 units of very-low income housing. The city adopts a state-approved housing element for its eight-year cycle and zones the land. State officials will then calculate their new SB 35 housing approval numbers by dividing each number by eight. 
 
Moderate 1,000/8 = 125 per year
Low Income 500/8    = 62.5 per year
Very Low Income 300/8    = 37.5 per year

If the state determines that the city is not on pace to achieve its allocation for all categories each year, then it loses community approval authority until the city catches up. 
 
While such a process may help for bureaucratic measurement and efficiency, it lacks any connection to private market realities or the availability of resources to construct units affordable to low or very low income households.
 
Local governments have long been required to zone sufficient amounts of land in an extremely detailed housing element process. These plans are subject to state approval by the Department of Housing and Community Development. 
 
State policy makers have also recognized that while locals can plan for housing, they do not control the vagaries of the housing market place. Local governments do not control investment decisions by individual developers and landowners; nor do they control conditions in the national or state economy, interest rates, bank underwriting requirements, construction labor availability, regional water supplies, state environmental policies that may affect housing production and other market factors. 
 
When it comes to affordable housing, it is well documented that with the loss of redevelopment and the decline in available federal and state affordable housing resources, very little resources exist in California to build and maintain affordable units. The political prospects for addressing this problem are not currently good. Gov. Jerry Brown has made it clear that he does not support any expenditure for affordable housing that impact the state General Fund, and additional cuts are more likely from the federal level. 
 
If SB 35 becomes law, many cities and counties would likely become subject to its provisions at some point simply because:
  • They do not control the market and decisions by individual developers and investors;
  • They do not control the availability of affordable housing subsidies or where nonprofits opt to propose projects; and
  • They do not control the pace of housing production that will not occur in linear fashion that would match up with the annual state measurement process. 
Next Steps
 
Cities are encouraged to review SB 35 and submit an opposition letter on the measure. The bill language, the League’s opposition letter and a sample opposition letter cities can use can be found at www.cacities.org/billsearch by plugging SB 35 into the search function.
 


 
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