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The Senate Housing Bill Is Dead. What Happens Next?

A BART train runs through a neighborhood of single-family homes in Albany. California lawmakers again rejected a bill that would have led to denser development along public transit routes. (Anne Wernikoff for CalMatters)
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Senate Bill 50 would have forced cities to allow more mid-rise apartment buildings around public transit and next to some single-family homes, but it failed to get enough votes in the California Legislature to survive in 2020 before time ran out.

The question now is how Gov. Gavin Newsom plans to meet one of his signature campaign goals: building millions of new homes.

"California's housing affordability crisis demands our state pass a historic housing production bill," Newsom said in a statement shortly after the bill was voted down by Democratic and Republican lawmakers.

Here are some approaches such a production bill might take:

  • Pair zoning changes with redevelopment money: A UCLA analysis found that cities across California would likely have to dramatically "upzone" — allow much denser development where it is legally prohibited now — for Newsom to come close to his goal of 3.5 million new homes. That's exactly what SB 50 attempted to do, but zoning rules put a "mathetmatical cap on the new housing you can build," says Sen. Scott Wiener. To make upzoning more attractive for cities who resent the state encroaching on local control over housing decisions, the package may also have to include funding for redevelopment -- a program Gov. Jerry Brown dissolved nearly a decade ago.
  • Wait for the carrots and sticks to kick in: Newsom administration officials point to state efforts already in place to force cities to allow more housing. Trouble is, Newsom's original proposal to withhold gas tax revenue from cities stubbornly failing to meet their state-imposed housing goals failed to garner much support. A replacement scheme that allows a judge to fine non-compliant cities has yet to be tested.
  • Reform the California Environmental Quality Act: Developers have long contended the act is a burdensome tool that labor and neighborhood groups use to block and delay new developments, adding unnecessary costs to projects. But good luck. If Wiener's bill was comparable to climbing Half Dome, so-called CEQA reform would equate to ascending the Himalayas.
  • Cut impact fees: Fees that local governments impose on new developments for parks, schools and other infrastructure represent another cost that developers say inhibits new housing from being built. Here Newsom may find some wiggle room. Cities could be receptive to lowering how much they're allowed to charge as long as they get that revenue from another source. Still, the impact such a cap would make on California's housing shortage falls far short of more sweeping options.
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