Yesterday, two of this session’s most prominent bills took an important step towards becoming law as the Senate and Assembly voted unanimously to approve Assembly Bill 2011 (Buffy Wicks, Oakland) and Senate Bill 6 (Anna Caballero, Merced). These bills will significantly increase opportunities for housing development by making it easier to convert employment uses—commercial, industrial, and parking—to housing.

A recent analysis by Urban Footprint found that AB 2011 would open up more than 108,000 areas of land, creating opportunities for between 1.6 and 2.4 million homes throughout the State. Developers will be able to choose between the two bills based on their project and market specifics. It is widely thought that AB 2011 will be a more helpful vehicle. But, with both bills moving forward, developers will have choices and can evaluate which option makes most sense for a particular development and in a specific jurisdiction.

Here are the details: 

SB 6, known as the Middle-Class Housing Act, would provide an expedited process for the development of housing on land zoned for employment uses.  

AB 2011, known as the Affordable Housing and High Road Jobs Act, would allow for the by-right development of 100% affordable housing on underutilized commercially-zoned lands and mixed-income housing along commercial corridors.  

Senate Bill 6

Process:

While SB 6 provides an expedited process, developers still must go through a regular process to gain approvals, including zoning, parking, and design requirements.

Developers could choose to invoke SB 35 to provide for by right approvals. But SB 35 also comes with added affordability and labor requirements. 

Affordability:

No requirement.

Local inclusionary requirements will apply when applicable.

Location:

Housing on underutilized commercially-zoned lands.

Labor Requirements:

Developers must certify that all workers will be paid prevailing wages.

Labor organizations must be notified in advance to work towards an agreement for a skilled and trained workforce.

If two skilled and trained bids are not received, a developer can rebid without the requirement. 

Other Requirements:

Requires developments to meet or exceed the density needed to provide affordable homes (generally 30 units per acre in urban areas, 20 units per acre in suburban areas, and 10 units per acre in rural areas.

Assembly Bill 2011

Process:

By right (ministerial). Developers have the right to build housing on eligible sites.

Affordability:

At least 15% of the units must be affordable to lower-income households. 

Rental developments could instead agree to provide 8% of the homes for very low-income families and 5% of the homes for extremely low-income families.

For sale projects could instead provide 30% of the homes for moderate-income families. 

Location:

100% affordable housing on underutilized commercially-zoned lands.

Mixed-Income housing along commercial corridors.

Labor Requirements:

Requires the payment of prevailing wages.

Provides for health benefits for construction workers for any project of 50 or more units. 

All contractors must agree to participate in an apprenticeship program or request apprentices, but if none are available the project can move forward. 

Both bills will return to their house of origin for final approvals before they head to the Governor’s desk at the end of this month. The Governor has until the end of September to sign or veto the bills, but it is widely expected that he will sign the bills into law. If signed, the bills would both become effective on January 1, 2023.