The California Association of Realtors has a powerful voice in the Golden State and this week the trade group put its considerable might behind several proposed bills meant to boost the state’s housing supply.
The state’s new governor, Gavin Newsom, has made the bold promise to construct 3.5 million new housing units by 2025, or 500,000 per year, which would be a huge jump from the less than 80,000 units built annually in the state currently.
Some of the proposals have drawn the ire of the Not In My Backyard (NIMBY) crowd, but Newsom’s goal aligns well with the belief of Los Angeles-based C.A.R. that the solution to the state’s housing crisis is housing construction. C.A.R. has more than 200,000 agent and broker members statewide.
“Gov. Newsom’s legislative proposals demonstrate his steadfast commitment to digging California out of its dire housing crisis,” said C.A.R. President Jared Martin in a statement. “California’s future depends on addressing and solving the housing shortage and this plan provides a strong roadmap to get us there.”
Newsom announced a legislative proposal on Monday calling for higher statewide housing goals for 2020 and 2021 set by the California Department of Housing and Community Development (HCD) based on an area’s jobs, households and affordability.
The proposal would also update the state’s long-term housing goals, known as Regional Housing Needs Allocations (RHNA), to incentivize jurisdictions to meet those goals in two years rather than the current three.
The proposal would provide $750 million to help cities and counties jump-start housing production and meet those goals, including $250 million to help local governments plan towards the higher goals through technical assistance, staffing and identifying process improvements and barriers to production. Cities will also have $500 million in incentive grants available to them beginning in 2021 when they meet certain milestones of planning and zoning for more housing, the governor’s office said.
“Our state’s affordability crisis is undermining the California Dream and the foundations of our economic well-being,” Newsom said in a statement.
“Families should be able to live near where they work,” he added. “They shouldn’t live in constant fear of eviction or spend their whole paycheck to keep a roof overhead. That’s increasingly the case throughout California.”
Newsom’s proposal is part of a $1.75 billion housing package he rolled out in January that includes $1 billion in tax credits and loans to encourage low, mixed and middle-income housing production through separate legislative and budget proposals, the governor’s office said.
HCD will work with other state agencies to propose opportunities to link transportation and other non-housing funds with housing goals by the end of 2022, the office added. Starting July 1, 2023, funds from a controversial gas tax called SB1 may be withheld from any jurisdiction that is not compliant with the updated goals — a measure that C.A.R. said would “provide necessary accountability.”
“The emphasis on increasing the housing supply through higher short-term production goals and reformed long-term housing goals paired with an essential level of accountability creates a sustainable pathway to achieving the governor’s bold vision to ‘build housing for all,'” Martin said. “Realtors look forward to continuing to work with Gov. Newsom and the Legislature to advance these proposals in the coming months.”
Also this week, C.A.R. announced its support or sponsorship of other bills designed to increase housing supply and remove barriers to development.
According to C.A.R., these include:
- SB 50 (introduced by Sen. Scott Wiener), which would boost housing and apartment development in and around major transit hubs and employers and provide developers with a “density bonus” — authority to build additional units in exchange for building below-market units — and other incentives or concessions.
- AB 1568 (introduced by Asm. Kevin McCarty), which would withhold gas tax revenue if counties do not meet homebuilding benchmarks verified by the California Department of Housing and Community Development.
- AB 1074 (introduced by Asm. Tyler Diep), which would sell bonds to provide loans to homeowners to construct accessory dwelling units (ADUs).
- AB 1020 (introduced by Asm. Jacqui Irwin), which would establish a state housing agency with a cabinet-level Secretary of Housing to oversee all housing-related initiatives and activities throughout the state.
- SB 509 (introduced by Sen. Anthony Portantino), which would establish a housing crisis awareness program through the issuance of a specialty license plate by the California Department of Motor Vehicles. The license plate would generate revenues for affordable housing programs throughout the state.
“California is at a tipping point, and the housing crisis threatens to permanently impede the state’s economic growth,” Martin said.
“It’s time for California’s leaders to take the necessary bold action and support legislative solutions to address the housing shortage.”