California

California Takes a Big Step Toward Legalizing 'Missing Middle' Housing

Legislators advance bills that would allow duplexes statewide and make it easier for local governments to legalize small apartment buildings.

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The headline-grabbing fights in California housing politics over the past couple years have generally been over big, ultimately unsuccessful state bills that would override local zoning restrictions to allow for apartments near transit and job centers.

This year, the state's pro-development YIMBY (Yes In My Backyard) activists and legislators devoted their energy toward wonkier, slightly more marginal reforms. The strategy appears to have paid off.

Last week, the California Assembly passed two housing reform bills. One legalizes duplexes in single-family neighborhoods across the state, and the other makes it easier for local governments to allow "light-touch" density on their own.

"We're headed to an era when we're going to see more of that gentle in-fill housing that was legal in California up until the 1970s and '80s," says Matt Lewis, communications director for California YIMBY. "This is really sort of a Back to the Future week for California housing policy."

The duplex bill, S.B. 9, passed out of the state Assembly on Thursday. It allows homeowners to split single-family-zoned lots and then build two units on each—effectively legalizing the construction of four homes where only one was allowed before. The legislation would also require local bureaucrats to "ministerially" approve permits for lot splits and duplexes, meaning they wouldn't have the discretion to deny or condition those permits.

This follows a growing trend of states and cities legalizing more "missing middle" housing—i.e. two-, three-, and four-unit homes—in what were once neighborhoods of exclusively single-family houses.

Minneapolis legalized the construction of triplexes citywide in 2020 (although the city's preservation of height and massing restrictions means the change has led to very little new housing). Starting this month, developers in Portland, Oregon, are now able to build up to four-unit homes almost everywhere in the city.

The lot-splitting streamlining in California's S.B. 9 is probably the more impactful than the duplex legalization, says the Sightline Institute's Michael Anderson.

"Many banks and credit unions struggle to figure out how to value a lot with an extra rental on site, and therefore can't always offer good loan terms to people looking to build a backyard cottage or remodel into a duplex," Anderson writes. "But every lender knows exactly how to value a little lot with a new house on it. This would make mortgage financing easier."

The bill doesn't apply to lots that are less than 2,400 square feet or that are in historic districts or wildfire zones. It also requires that a homeowner who applies to split up his or her lot also agree to live on-site for at least three years. And it doesn't allow homes to be converted to duplexes if they'd been rented in the last three years.

These provisions were added to pacify critics who claimed the bill would lead to a flood of "greedy and disruptive" investors snatching up single-family plots and displacing tenants in a mass redevelopment campaign.

An analysis by Berkeley's Terner Center for Housing Innovation—before the owner-occupancy requirement was added to the bill—found that S.B. 9 would enable roughly 700,000 new units of housing in the state, particularly in coastal counties and larger cities.

Potentially setting the stage for even more development across the state is California's S.B. 10, which passed out of the Assembly last Monday. On its face, the bill doesn't legalize any new housing. Rather, it makes it easier for local governments to do that themselves.

Typically, local governments trying to change their zoning codes—to allow for denser housing, say—would first have to produce a study on the environmental impacts of the proposed changes. Those studies can cost millions of dollars and take years to complete. State law also enables third parties to sue if they think a study wasn't thorough enough, delaying things even more.

S.B. 10 would speed things up by allowing local governments to legalize 10-unit developments on urban parcels of land without also having to go through the environmental review process.

"You can make a real argument that that kind of housing does not need the same kind of environmental scrutiny," state Sen. Scott Wiener (D–San Francisco) told Reason in January. "It allows cities to do what they want to do, or need to do, quickly and not have to spend ten years doing [environmental impact reports] and getting sued."

Both S.B. 9 and S.B. 10 will now head back to the California Senate, where they already passed, for final approval. That will have to happen before a September 10 deadline. Then the bills will go to the governor for his signature.

Lewis notes that ending California's shortage of affordable housing will require deeper reforms still.

"We're so deep in the hole in terms of the housing shortage that we're still going to need to do more comprehensive reform for even denser buildings particularly near transit and job centers," he says. "What we saw this week is a recognition that the neighborhoods that we have now, which already have duplexes, triplexes, and small apartment buildings are not the end of the world."

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  1. Who would be stupid enough to rent apartments in the first place? Haven’t they been fucked over enough?

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  2. My guess is that property owners aren’t going to sit still for having duplexes built in their neighborhoods.

    1. If you want to get rich in CA, start an environmental review company.
      Everybody will soon be filing the lawsuits over development to say the studies weren’t done right, and have to be done again. And again, And again.

    2. The only sure thing about commies is that once they get theirs, they don’t want anyone else to get anything.

    3. “The legislation would also require local bureaucrats to “ministerially” approve permits for lot splits and duplexes, meaning they wouldn’t have the discretion to deny or condition those permits.”
      They won’t have a choice

  3. Excellent. One hand says we must pull zoning up to the state level. The other hand says we must empower localities.
    Only in California.

  4. I expect that, even after such legislation is passed, municipalities and homeowners’ groups will still find a way to prevent apartments and duplexes from being built. The never ending environmental reviews will probably become even more popular.

  5. /sarc on

    If the supply of housing goes up then the price will go down. That will mean millions of property owners being effectively robbed by greedy developers who just want to make a quick buck building duplexes and apartment buildings. Developers get rich while people depending upon appreciating property values get screwed. Bad deal. Very bad deal.

    /sarc off

    Seriously though, if that argument hasn’t been made I’m sure someone will make it.

    1. You already made it before, and you don’t do sarcasm well, screetch.

      1. Show me the quote or apologize for being a liar.

        1. Is this sarcasm? I can never tell.

    2. In general, the property owners don’t directly approach the value of their houses. Instead they complain that traffic will increase, and there will be increased load on the schools and other infrastructure services. Only then do they maybe note that this ultimately results in decreased housing values- but only because “Developers ruined the neighborhood so they could get more bux!!!”

      1. The schools are closed, the drivers now work from home, lower property values mean lower taxes for the homeowner, so what’s to complain about?
        Besides, it’s just California being California.

  6. Tents are excellent alternatives to houses in warm climates, as the Saudis have documented for centuries, and as so-called homeless folks in California have increasingly done for more than a decade.

  7. Wow, legislation so people can do things they already do elsewhere.

    Only in Cali.

    1. Here in California it has to be LEGALIZED. Does that make it a dopey idea?

  8. Seem like good baby steps to start rectifying the housing situation.

    1. Taking too many baby steps caused the problem.

  9. You would have to be insane to build rental property now.
    Everyone has seen what happened with the eviction moratorium

    I confidently predict rent control to make sure the landlords are not permitted to make profit.
    I also predict expansions of laws forbidding background checks, and forcing you to rent to criminals or people who obviously won’t pay the rent

  10. Cato needs to look deeper than this article suggests

    Shifting power from communities to the state is not really the libertarian dream. The rights of the individual are never supported by centralizing power, especially wrt land use and private property issues

    1. The rights of the individual are never supported by centralizing power

      History is chock-full of counterexamples. Local control often just means local tyranny.

      1. It’s also way easier to overthrow. Especially in the smaller cities, where the asshole on the city council likely lives the next street over.

        Big cities, you’re screwed either way. But a lot of us absolutely do NOT want Sacramento dictating. This is a huge and very diverse state being destroyed by the one-party, state-centric rule.

        1. …supported by the people of the state.

  11. Duplexes are white trash and therefore racist.

    I know a bunch of cities that have also banned mother in law apartments, because they can essentially be used as duplexes.

  12. By the way, this is going to go badly.

    Not that “infill” is a bad idea. I just have been here my whole life and remember the 80s iteration of this, where they called it “Densification”. The idea was to allow denser housing so you could solve the traffic problems, getting more people close to their jobs.

    What they did was NOT infill, but pulled all the density restrictions out in the county, at the ends of the freeways, so what were quaint horsetowns ended up chock full of low-rent, crackerbox apartment buildings. But 30 mile outside of town, so all those people STILL had to get on the freeway to get to work. Low rent apartments bring low rent people, and quaint horsetowns turn into shitty little tweakertowns, yet traffic gets WORSE for the effort.

    Not sure what happens this time, but I’m guessing shithole apartments crammed in next door to formerly quaint 40s and 50s era bungalows, taking up all the street parking because, you know, there’s no viable public transit. Might work in San Francisco, but everywhere else in the state they’ll find a way to make it awful. I’m certain. They always do.

  13. Too bad there isn’t anyone in the Legislature saying, “Instead of passing new laws that we think might increase housing, why don’t we get rid of the old laws we know are blocking increased housing.”

    Besides, the California housing crisis is solving itself, as more and more people move elsewhere.

  14. Too bad for those who sought to live in a quiet, family friendly, residential neighborhood and who now find themselves surrounded by low income apartments shoehorned onto single family lots.

  15. More housing closer in is good but the rights of existing home owners cannot be neglected. Building a multistory unit in a formerly single story neighborhood damages existing homes by reducing privacy. Who wants a new neighbor with high windows looking into bathroom or bedroom windows or into formerly private outdoor spaces.

  16. All of California will eventually look Tijuana under the guidance and direction of Democrat “leadership”.

  17. This year, the state’s pro-development YIMBY (Yes In My Backyard) activists

    Those aren’t “YIMBY” activists, they are “YIYBY” activists (“Yes In Your Backyard”).

    Sorry, we don’t want apartment buildings in our neighborhood, and the state should have no right to override our local decisions.

    All this really does is encourage the growth of HOAs, because HOAs can still impose these kinds of restrictions.

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