CA State Bills - Due Tomorrow
California state legislators have been making a mad dash to approve as many bills as possible before tomorrow, September 13, 2019 -- their deadline to get a bill passed, signed by the Governor (before October 13, 2019), and effective by next year
Heading into the ultimate hour, here are a few notable bills related to housing and development:
AB 1482 - Statewide Rent Control
Despite a resounding "NO" from voters, legislators have passed and the Governor has vowed to sign AB 1482, which would enact a statewide rent control in every city. The bill, to go into effect January 1, 2020, would:
Cap rent increases to 5% plus inflationBe in effect through 2030 Exclude housing built in the last 15 years (on a rolling basis)Leave Costa Hawkins Rental Housing Act unchangedRequire "Just Cause" eviction for 1 year+ tenants
SB 5 - Affordable Housing & Community Development Investment Program
SB 5 proposes to create a new program to meet the financing needs of housing development. "Beginning in 2021, SB 5 would provide $200 million annually to local governments. [an] amount [that would] grow annually and be capped at $2 billion annually." The stated intent of the program is to provide each individual city funding for the development of affordable housing, which seems innocent enough.
However, how the money would trickle down to developers remains unclear, and the similarities to the Community Redevelopment Agencies (CRA), which as the LA Times pointed out were ripe with abuse, are uncanny. Many CRA's received millions of dollars in funding only siphon out funds for inflated salaries, "planning fees", and developer subsidies.
SB 330 - Housing Crisis Act of 2019
Curbed describes it the best - this bill is a "moratorium on housing moratoriums" . SB 330 would require cities to cut permit processing times, forbid cities from raising development fees or permit requirements. Additionally, in areas of low housing supply, it prohibits cities from enacting housing caps or building moratoriums (*cough* so no more ICOs in LA *cough*), and even changing building design standards after an application has been submitted (another common practice used to stall development). If approved, it would be effective through 2025.
SIGNED BY GOVERNOR
AB 178 - Wildfire Exemptions to Solar Panel Requirements
Come January 1, 2020, CA will become the first state to require all new homes have solar panels installed. To encourage re-development in areas hit hard by the wildfires, this bill exempts those homes from this requirement until 2023, so long as "certain requirements are met with respect to the owner’s income and insurance coverage and the location and square footage of the construction proposed".
While bills like SB 330 are a win for development, no bill appears to address the lack of housing supply. The Governor's many promises to require more housing be built and even eradicate single family zoning have not materialized, and combined with the new statewide rent control bill, the state may not be clear of the housing crisis just yet. That being said, as a private developer, both large and small, the demand for new housing developments remains.
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