SB 9 and SB 10. A California Housing Solution or Just More Usurption of Local Government?

Unless you have been living under a rock, or totally isolated during the COVID Pandemic, you are aware that the continued need for more housing in California has reached epidemic levels. Beacon Research in 2017 stated that at that time the State had a backlog of 2.3 million housing units and needed at least 180,000 new units per year to meet our population growth. However, only 104,000 units were built in 2018 and 95,000 in 2019 (See Public Policy Institute of California PPCI January 2020). Recently Dan Dunmoyer, President of the California Building Association stated that the State was only going to build 100,000 units in 2022, well short of the 180,000 annual units needed and just increasing the backlog. During the Pandemic construction was an essential business and therefor was not locked down. If you look around Santa Clarita and the Antelope Valley you see new houses everywhere you look. Even in Ventura County along the 126 you see significant new housing. However, even with this visible development, not nearly enough housing units are being built leading to the most unaffordable housing in the Country.

One of the key obstacles to more housing continues to be the requirements of the California Environmental Quality Act (CEQA) which make it very difficult to develop and increases the cost and time for projects. All recent efforts to significantly reform CEQA have either only been successful for mega projects like sports stadiums and or very small or much denser developments. Master Planned projects continue to be at the mercy of the multi year approval process and then litigation which can further delays the project. This is what happened recently to the Centennial Project proposed by Tejon Ranch in Northern LA County.

Instead, of making the larger reforms necessary to ensure we are building enough housing units, the Legislature and Governor have decided to focus on forcing local government to change their existing development rules through a long series of new State Mandates. I previously provided an article on Accessory Dwelling Units, ADUS (provide link) where the State made it almost impossible for local government to deny an ADU on any residential zoned property.

This year the Legislature passed with bipartisan support, and the Governor signed, SB 9 and SB 10, which went even further in mandating local development decisions.

Proposition 9 is the most controversial of the bills. It requires that local agencies, in other word cities and counties, to ministerially approve a proposal to convert a single family residential lot into two residences without discretionary review or any public hearings. The size of each lot is permitted to be as small as 1200 square feet, which is much smaller that most single family lots. Setbacks are limited and requirement for parking is also limited. There can be no requirements of dedications or offsite improvements, but there are limitations that one of the units must be owner occupied and the other unit can not have short term rental. In addition to allowing two unites on an existing residential project, SB 9 allows the construction of two units on existing single family zoned vacant property on the same criteria.

The bill did make an exception to the requirement that local government approve ADUs and stated that if SB 9 is utilized local government does not have to also approve and ADU on the property.

There has been some disagreement about where these new provisions are applicable. It applies to property located within and urbanized area or urban cluster or a city which has an urbanized area or urban cluster. That would include suburban cities such as Santa Clarita, not just large more urban cities like Los Angeles

In addition to the policy argument that the State should not take over the historical power of local government on land use matters , opposition also centers around the fact that these projects would be categorically exempt from CEQA just like the ADU expansion legislation allowed. This means that you will require local government to approve higher density without being able to require the necessary mitigation for environmental impact which they and their residents may believe are necessary and which are applied to normal development projects.

Finally, how many units will SB actually create? One study the Terner Center for Housing Innovation at UC Berkely has cautioned that its analysis shows that only approximately 5.4% of residential properties would be financially able to build two units on lot.

SB 10 was the other major bill this year and created a voluntary, not mandatory, process for local government to streamline the zoning process for new multi-tenant housing near transit or urban infill areas allowing up to 10 units per parcel. There was some CEQA simplification to allow the upzoning if local communities want to voluntarily increase density. While the Governor’s message in support of signing SB 10 state if would increase affordable rental opportunities, this legislation does not have any specific affordable housing requirements.

It is ironic that the State imposes the amount of housing a local jurisdiction needs to provide, but continues to hamstring its efforts on major development projects and instead is forcing more density on smaller lots without adequate mitigation. It is unclear how or if these efforts will work and how many units will be built. However, unless the State takes a more comprehensive approach to the housing crisis and deals with the number of units we truly need, we will continue not to build enough housing and lower its cost.