September 7, 2022

Greetings CAL-ALHFA members, supporters, colleagues and friends: 

THE 2022 LEGISLATIVE SESSION IS IN THE BOOKS, AND IT HAS BEEN A DOOZY!
Most important for affordable housing development is the passage of two bills which open up under-utilized commercial properties for the development of affordable and market rate housing: AB 2011 and SB 6.
AB2011 AND SB 6

Following are excerpts from a statement by Senator Toni Atkins, President Pro Tem of the Senate, regarding the passage of these historic bills:

Following weeks of negotiations, Senate President pro Tempore Toni G. Atkins (D-San Diego) and Assembly Speaker Anthony Rendon (D-Lakewood) announced today that an agreement has been reached on a package of legislation aimed at increasing California’s housing supply.

The agreement centers around SB 6, the Middle-Class Housing Act, by Senator Anna Caballero (D-Merced) and AB 2011, the Affordable Housing and High Road Jobs Act, by Assemblymember Buffy Wicks (D-Oakland), both of which are bills that focus on streamlining housing production in commercial zones. SB 6 would spur the creation of housing in existing commercial and retail space, and help make homeownership more attainable for working families. AB 2011 would accelerate production of millions of affordable and mixed-income housing along transit-friendly commercial corridors.

“California desperately needs more housing, especially housing that is affordable for lower- and middle-income families – SB 6 and AB 2011 will help fulfill that need,” said Pro Tem Atkins. “My sincere appreciation goes to Senator Anna Caballero, Assemblymember Buffy Wicks, Senate Majority Leader Mike McGuire, and Speaker Anthony Rendon for the energy they poured into this agreement, and to our Labor partners for working with us on this achievement. This is a monumental legislative agreement, and one of the most significant efforts to streamline and amplify housing production in decades.”

By concentrating housing closer to city centers, near jobs, transit, and services, both AB 2011 and SB 6 would make a meaningful contribution to California’s efforts to fight climate change.

“The best legislative achievements – like this one – only come when you see negotiations as a non-zero-sum game. We didn’t go into this to have one side win at the expense of another. As a result, we have a housing victory that checks off a lot of the boxes – affordability, mixed-use, transit accessibility and labor security,” said Speaker Rendon. “This is a win for both houses, thanks to the work of Senate pro Tem Toni Atkins, Senate Majority Leader Mike McGuire and Senator Anna Caballero in their house and Assemblymember Buffy Wicks for this bill and Assemblymember Tim Grayson – for his work setting the table for housing progress in the Assembly. This is a great accomplishment.”

The state will need an estimated 2.5 million new housing units over the next eight years, with more than a million units of those needing to be affordable for lower-income households, according to the California Department of Housing and Community Development’s 2022 Statewide Housing Plan.

“The bottom line is these bills are transformational for working families in California seeking housing,” said Senator Caballero, Chair of Senate Governance and Finance.  “It’s been a pleasure to work alongside Assemblywoman Wicks, a tireless advocate for housing in California. Coupled with historic state investments, including $500 million to help working families achieve the California Dream of homeownership, I believe both of these bills will make tremendous progress to help families in California have a place to call home.”

Working in tandem, the bills are anticipated to increase housing production efficiencies across California, while strengthening labor standards and growing the workforce that will build that housing for years to come.

“These bills will change the trajectory of California’s housing crisis,” said Assemblymember Wicks, Chair of the Assembly Committee on Housing and Community Development. “The impact will be historic – no longer will lack of land be an issue for housing production. No longer will there be a lack of incentive for workers to join the construction workforce. And, no longer will red tape and bureaucracy prohibit us from building housing in the right locations to address our climate crisis.”

Negotiations were led by Senate Majority Leader Mike McGuire (D-Healdsburg), who was instrumental in efforts to arrive at a compromise that will ultimately open the door to more housing in California.

“The housing crisis is one of the greatest in our state’s history. SB 6 and AB 2011 represent the bold and decisive action this state and our communities need,” McGuire said. “This historic agreement represents a one-two punch that will expedite the buildout of thousands of homes in all corners of the Golden State in the years to come. We are all grateful for the tenacious work of Pro Tem Atkins and Speaker Rendon on this critical issue – we wouldn’t be here without their leadership.”

The agreement also is supported by the NorCal Carpenters Union, Southwest Regional Council of Carpenters, and the State Building and Construction Trades Council of California, which represent hundreds of thousands of workers.

“AB 2011 will raise the wages and improve the working conditions for tens of thousands of low-wage construction workers, level the competitive playing field for all law-abiding contractors, union and non-union, and break the housing construction log-jam,” said Jay Bradshaw, Executive Officer, NorCal Carpenters Union. “It's time to get to work building the millions of new homes California needs, particularly affordable workforce housing.”

“Standing strong for working families is our top priority and we can’t do that without building housing for the middle class,” said Andrew Meredith, President, State Building and Construction Trades Council of California. “SB 6 is the culmination of years of work, and is a game changer for working families to achieve the American Dream and it will protect workers from exploitation. As we’ve said all along, our members and apprentices are ready and prepared to build us out of the housing crisis. Let’s get SB 6 done and finally start building.”

“This housing package will rebuild our communities with affordable housing and guarantee decent wages and middle-class careers for the young local workers that will be put to work,” said Pete Rodriguez, Executive Officer, Southwest Regional Council of Carpenters.
 
A note of quiet caution, as expressed by the Editorial Board of the Los Angeles Times:
The deal more likely represents a one-time fix rather than the systemic culture change needed to make similar deals easier to make in the future, even as both measures passed the Legislature with bipartisan support. The Assembly approved AB 2011 on a final 52-3 vote and the Senate sent SB 6 to Newsom on a 34-0 vote.
CAL-ALHFA COMMENTS
We at CAL-ALHFA recognize that until universal agreement is reached on the terms and conditions labor unions will require, each deal will have to be negotiated separately. We also recognize that our core constituency, smaller and rural jurisdictions, are not as likely to enjoy the benefits of the deals reached in AB2011 and SB6. Requiring developers to pay prevailing wages in areas outside of the coastal urban areas of the San Francisco Bay, Central Coast, Los Angeles, and San Diego, may make these deals financially infeasible in the Central Valley and the Inland Empire. A lack of available skilled and trained workers may also inhibit these developments, regardless of the best efforts of the developers to reach agreements with local labor unions. We hope for the best, and look forward to working with the entire affordable housing community in achieving our goals of affordable housing for all.
OTHER SIGNIFICANT LEGISLATION SENT TO GOVERNOR

While the passage of AB2011 and SB6 somewhat overshadow other significant bills this year, there is a lot for the affordable housing community to be pleased about. The Governor has until September 30 to sign or veto the following bills or they become law without his signature. Thanks to LeSar Development Consultants, California YIMBY, the California Housing Consortium, and NPH for their hard work in advocating these bills:
Housing Production
AB 1206 (Bennett) increases the feasibility of community land trusts by extending the welfare tax exemption to developments when a renter’s income goes up to 140% of Area Median Income (AMI) as long as the owner is a community land trust and the unit continues to be restricted.

AB 1288 (Quirk-Silva) increases the effectiveness of the state low-income housing tax credits
 
AB 2097 (Friedman) prohibits local jurisdictions from imposing parking minimums on housing and commercial developments that are located within a half mile walking distance of public transit. 

AB 2221 (Quirk-Silva) accelerates building Accessory Dwelling Units (ADUs, aka granny flats or casitas) by clarifying ambiguities in existing law and removing arbitrary barriers that some cities have imposed on ADU development.

AB 2234 (R. Rivas) will establish a transparent process for obtaining post-entitlement permits in a timely manner.

AB 2334 (Wicks) expands the application of the state’s affordable housing density bonus law to allow unlimited density bonus for affordable housing in low vehicle miles traveled (VMT) areas

AB 2668 (Grayson) is clean-up legislation to SB 35 (Wiener, 2017), the landmark housing approvals streamlining law. Helps create more housing by clarifying how SB 35 applies to existing rules around conditional use permits, the calculation of inclusionary housing percentages as they relate to density bonus units, sites that once had underground storage tanks and project modifications as they relate to objective planning standards. 

SB 649 (Cortese) allows local governments and developers to create a local tenant preference in an affordable housing rental development funded with State or local funds or tax programs to prevent displacement.
 
SB 948 (Becker)  reduces the cost of affordable housing through the creation of a pooled transition reserve.
Student and Faculty Housing Programs
AB 886 (Wiener) known as the Student and Faculty Housing Act streamlines and accelerates the development of student and faculty housing across the State by exempting the housing from CEQA.

AB 1719 (Ward) enacts the Community College Faculty and Employee Housing Act of 2022 to allow community college districts to restrict occupancy to their faculty and staff and still qualify for both Low Income Housing Tax Credit (LIHTC) Program and other State and local funds.
New Housing Finance Agencies
SB 679 (Kamlager) creates the Los Angeles County Affordable Housing Solutions Agency (LACAHSA), a new, independent agency in Los Angeles county with the authority to raise funds for the production of new housing and the provision of renter protections.

SB 1177 (Portantino) creates a regional housing trust fund between the cities of Burbank, Glendale, and Pasadena by enabling them to enter into a Joint Powers Agreement to fund housing for lower- and moderate-income households and assist people facing homelessness. (Signed by the Governor on August 22nd)

SB 1444 (Allen) enables the County of Los Angeles and cities within the jurisdiction of the South Bay Cities Council of Governments to form a South Bay Regional Housing Trust and enter into a joint powers agreement to fund housing for extremely low, very low, and low-income households and assist people facing homelessness. 
CAL-ALHFA COMMENTS
We welcome the creation of new local housing finance agencies and urge you to join CAL-ALHFA to strengthen our joint efforts in creating the most effective local financing tools possible.
WHAT TO EXPECT IN 2023
In our next update, we will talk about bills that didn’t make it to the Governor’s desk this year, and which ones may be reintroduced in 2023. These include, among others:

AB 1850 (Ward) establishes minimum standards for Joint Power Authorities middle income housing acquisitions.

AB 1911 (Gabriel) creates the Low Income Housing Preservation Tax Credit Program to preserve naturally occurring affordable housing (NOAH). 
 
AB 2186 (Grayson) requires local impact fee deferral for agencies not in compliance with Housing Elements.
 
AB 2357 (Ting) Surplus lands update bill. 
Mary Ellen Shay,
Executive Director
California Association of Local Housing Finance Agencies (CAL-ALHFA)
CAL-ALHFA was established in 1989 to represent local housing professionals and agencies in the California State legislature and State housing programs. We also work on housing issues at the federal level. CAL-ALHFA is a non-profit organization with a broad based membership including public and private agencies which develop, finance, and administer programs to create affordable housing in California.