California Governor Signs Laws to Boost Housing Production

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They have become a familiar sight along America's wide commercial corridors: empty buildings once occupied by big box retailers that have shuttered their doors, in part because so many of their customers shop online.

Now, two new laws in California would allow developers to build homes on that land and largely prevent revenue-hungry local governments from stopping them.

Gov. Gavin Newsom signed two laws Wednesday that would open up much of the state's commercial land for residential development. It's a long-sought victory for affordable housing advocates, who say such sites are ripe for apartments because they're often near populated areas and have ample parking.

“This is a moment in a journey to reconcile the original sin of the state of California, and that is the issue of housing and affordability,” Newsom said in San Francisco before signing the bills into law. "We all need to be a little more responsible in the face of this affordability crisis."

Local government officials say the laws undermine their authority and upend years of careful planning that reflect community preferences. But there is also a financial consequence, they say, because stores generate more property taxes for local governments than households.

“It is a concern when state law is going to override these local decisions, particularly when these local decisions are made in a public process with the community as part of a larger housing plan,” said Jason Rhine, deputy director of legislative affairs for the League. of California cities.

California, the nation's most populous state with just over 39 million people, has a housing shortage that has pushed up home prices and contributed to a homeless crisis. State officials say California needs to build about 310,000 new housing units each year for the next eight years, more than 2 1/2 times the number the state normally builds each year.

Lawmakers in the Democratic-controlled state Legislature introduce dozens of bills each year to try to increase housing production, but many of their boldest ideas often fail in the face of opposition from local governments, unions and neighborhood groups.

A popular idea in recent years has been to override local laws about where housing can be built. Housing advocates complain that local governments are often content to let commercial buildings sit empty for years, sometimes decades, in the hope of a replacement that generates more property taxes, rather than changing the law to allow housing there.

Previous efforts to do so failed to pass the Legislature, but this year, lawmakers passed two bills, both of which Newsom signed Wednesday.

A law It will allow developers to build housing on some commercial land without having to seek permission from local governments, as long as a certain percentage of the housing is affordable. other law it will allow developers to build all market-rate housing on some commercial land, which would be more lucrative, but the projects would still have to go through an environmental review process.

“Stores are permanently leaving, Sears, Toys R Us, JC Penneys, Kmarts, they are closing,” said Democratic Sen. Anna Caballero, who authored one of the bills. “There is nothing that is going to take the place here commercially, so the ability to really transform the property and do it expeditiously… is invaluable.”

When he ran for governor in 2017, Newsom has pledged to develop 3.5 million new housing units by 2025, a number the state likely will fall short of. Newsom said Wednesday that he is now targeting 2.5 million new housing units by 2030, saying his original number "was always a stretch goal" that "in the process of trying to achieve it will allow us to see what's possible."

"We intend to continue to have bold goals because Californians deserve them," Newsom said.

The new laws reflect a compromise between unions and housing developers. Some unions, including the powerful California State Building and Construction Trades Council, had insisted that the legislation should require a “skilled and skilled” workforce to build the homes. That means a certain percentage of workers would have participated in a state-approved apprenticeship program.

But homebuilders argue there aren't enough workers available to meet that standard, which would make it difficult to complete some projects.

The solution was to give homebuilders a choice. The bill that requires affordable housing does not require a skilled and trained workforce, while the bill that does not require affordable housing does.

“Doing something big or consequential in the Legislature is not easy. And it can be messy. But at the end of the day, all sides came together,” said state Senate Democratic Leader Mike McGuire.

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