Housing Policy

For the Third Year in a Row, California Legislators Have Killed a Promising Housing Reform Bill

SB 50 would have legalized mid-rise apartments near transit stops and employment centers. State lawmakers felt it went too far and/or not far enough.

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A major housing reform bill failed in California yesterday. Again.

The bill, SB 50, would have allowed denser housing construction near transit stops and job centers and would have legalized four-unit homes on almost all residential parcels statewide. The California Senate voted 18–15 in its favor, but the bill needed a majority, not just a plurality, of the 40-member Senate to pass. A number of lawmakers were absent or abstained, so the legislation is basically dead. (There's a chance that it could be brought up for a second vote today, but that is very unlikely.)

This is the third year in a row that a version of this bill has failed to pass.

The arguments against SB 50 on the Senate floor were varied, with senators saying it would encourage building in wildfire zones, spur gentrification, take too much control from cities, and/or demonize owners of single-family homes.

Throughout the legislative process, the bill's author, Sen. Scott Weiner (D–San Francisco), kept amending his legislation to appeal to his bill's two biggest critics: local governments and "equity groups." To appease the latter, developers benefiting from the bill's upzoning provisions would have to rent out as many as 25 percent of the new units they'd build to low-income renters at below-market rates. Another provision in the bill would have delayed the bill's effect for five years in "sensitive communities" and prevented the development of new apartments on land that hosted tenants in the last seven years.

In January, Wiener amended SB 50 again to create more flexibility for local governments. So long as they zoned for an equivalent amount of new housing, they wouldn't have to follow the bill's specific requirements about upzoning near transit and job centers.

That was enough to get a sizable number of local officials and local governments on board, including a lot of tightly zoned Silicon Valley suburbs. But Weiner failed to secure the support of a single Los Angeles–area senator. And equity advocates continued to give the legislation the cold shoulder. They argue that Wiener's legislation, by allowing for the development of new market-rate housing, will only allow unaffordable luxury developments being built, doing nothing to help low-income renters.

Last week, a coalition of these organizations sent a letter to Wiener announcing their opposition to the bill. SB 50 "will exacerbate the housing challenges experienced by low-income people, people of color, and other vulnerable people," they wrote.

The concern is understandable but misplaced. It is true that new market-rate buildings will be unaffordable to a majority of renters. But even expensive market-rate housing improves housing affordability for everyone. The more high-end apartments that are built, the fewer high-income earners will be going around bidding up the price of older, lower-rent units. That expands the number of moderately priced units available to people with incomes, helping to keep rents stable.

This process is known as filtering, and it is the foundation of the YIMBY argument for allowing the construction of more market-rate housing as a solution to California's housing crisis.

Some affordable housing advocates, including many of SB 50's critics, argue that the filtering process takes a long time and doesn't ultimately help those at the bottom of the income ladder. Yet recent research suggests that filtering can have an almost immediate, positive effect on affordability. And if the pace of filtering is the problem, the solution is to allow even more market-rate development, speeding the process along.

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  1. “…developers benefiting from the bill’s upzoning provisions would have to rent out as many as 25 percent of the new units they’d build to low-income renters at below-market rates.”

    I can’t imagine why owners of single-family housing would be opposed to such a thing, nor complain to their representatives about it. Nor oppose the second part of the bill not mentioned in the headline, the part that allowed dropping a four-plex within said single-family lot.

    Clearly, the problem behind homelessness in California is the lack of sensible housing regulations like these.

    1. Nothing says ‘Freedom’ or ‘Libertarian’ like state authoritarians, mandates and bans!

  2. We will continue to obstruct building housing until the homelessness problem is solved.

    1. If one person can’t afford it, no one should be able to afford it!

  3. funny thing is no matter how many houses you build Homeless people still can’t afford anything until they get off drugs and get a job. That is until you allow people to build shacks which I’m in favor of but thats not what anyone is proposing.

    1. The tents, General, don’t forget the tents – – – – –

      1. YIYBY = yurts in your backyard

  4. Thank you California for keeping the price of my house high. When I finally retire and sell it to move out of state I’m gonna make out like a bandit!

    Fuck, I see that my friend’s nice suburban two story four bedroom house with half acre front and back lawn is selling for only half the price of my condo!

    1. Have you factored in the exit tax?

  5. As long as states block upzoning measures like this, they’ll have serious housing and economic problems.

    Virginia legislators did the same stupid thing. Many millennials will ever own a home because of our stupid zoning laws, blocking anything besides single-family detached housing.

    1. Yep. Older Americans don’t give a shit about their kids when it comes to public policy. They tend to only care about themselves which is resulting in younger generations over-correcting by going full socialist.

      1. Agreed.
        People are ragging on California for not passing this, but in the most of the country such an upzoning measure has never even been proposed.
        We have a long way to go when it comes to land rights, and it’s ironic that California is beating the rest of the country in many ways.

  6. I always love the argument that “it doesn’t go far enough”.

    Translation: I agree with this bill, but I want more of what I want, and because I can’t have it, the people get nothing.

    1. I think what this article (and almost all of the other reports I’ve read so far on this) misses out on are the Sacramento political dynamics at play. In a nutshell, Gov. Newsome is not getting behind this bill. If he was a supporter, we’d probably see a different outcome. Why is he not getting behind the bill? Couple of reasons. One, he’s on the cowardly side and rarely sticks his neck out for anything of consequence. Two, housing was one of his big election promises so I suspect he doesn’t want to play a 2nd fiddle to a state legislator who for better or worse has been running with this issue for years before Newsome was sworn in. Which means he’s waiting for the right moment to get behind a bill that he can own, or at least claim credit for and play the hero. When that will happen is anyone’s guess, although with his national ambitions he needs to get going soon.

  7. #WhenDemocratsRule

  8. SB50 is terrible bill from a Libertarian viewpoint regardless of any revisions. In Silicon Valley it would actually prohibit private landowners from developing an object that belongs to them, because it was not near a bus stop. It only feeds into NIMBY problems that plague this country. This article should have applauded its failure in the State Senate, and not lauded the 1% of the bill that was libertarian leaning despite the other 99% of its content.

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