By David M. Greenwald
Sacramento, CA – This week the state legislature approved two bills that they hope will spur housing development (assuming the governor signs them).
AB 2011 and SB 6 would allow for the development at underutilized commercial and retail spaces such as largely vacant strip malls.
“These bills will change the trajectory of California’s housing crisis,” said Assemblymember Buffy Wicks. “The impact will be historic — no longer will lack of land be an issue for housing production.”
These are the latest efforts by the legislature to attempt to streamline housing and address the housing crisis where some experts believe around 2.5 million additional homes need to be constructed over the next eight years.
As Smart Cities Dive pointed out this week, “Housing experts and real estate industry leaders during the Urban Land Institute’s spring meeting in April said retail space is overbuilt in the U.S., and the shift to online shopping has prompted retailers to reduce their square footage.”
Thus, “Replacing those vacant and underutilized strip malls and shopping centers with developments that mix residential housing with stores, restaurants, hotels and commercial space could help the state address its affordable housing needs.”
However, many believe that local laws have prevented residential housing in commercially designated zones.
Naturally, California YIMBY praised the effort. In a tweet, Darrell Owens, policy analyst for California YIMBY, praised AB 2011 noting that it upzones for more than 2.4 million additional homes and offers around a 45 percent reduction in GHG over sprawl.
“This bill could result in 400,000 low income subsidized units, many of which may be in my own NIMBY backyard,” Owens added.
In a statement, state Sen. Anna Caballero said the Senate bill “would spur the creation of housing in existing commercial and retail space, and help make homeownership more attainable for working families.”
The assembly bill, meanwhile, would “accelerate production of millions of affordable and mixed-income housing along transit-friendly commercial corridors,” Caballero added.
But, of course, the bill has attracted complaints.
Livable California for instance, called it “the worst bill of 2022 for taking away local control.”
Among other things, “It requires ministerial approval of construction across a broad category of zones – including office, retail, and parking.”
They add, “AB 2011 is a massive state taking of flexibility needed by local jurisdictions to place housing where it best meets the needs of the community. CEQA is circumvented on these projects. CEQA is an important source of information to the community and developers and helps protect the environment.”
On the other hand, the bill comes with affordability requirements—for infill and mixed-use housing, often affordable requirements fall short.
The Senate Bill analysis points out “a housing development project may submit an application for a housing development that shall be a use by right and subject to a streamlined ministerial review in a zone where office, retail, or parking are a principally permitted use” but one of the keys to ministerial review is that it must meet the affordability requirements where “100% of the units are affordable to lower income households.”
It also offers a path for mixed-income housing—where it requires the project to meet the 15 percent affordability for lower-income households or 8 percent for very low and 5 percent for extremely low. For owner-occupied units, 30% of the units are required to be affordable to moderate-income or 15% affordable to lower-income households for 45 years.
If people don’t want peripheral development, then there has to be a way to build housing that is infill. One of the best places to do so is with antiquated and underutilized commercial parcels.
The problem as we know is that it is difficult and expensive to build infill, and especially to redevelop existing structures. While this bill isn’t going to address cost, it will make it easier to gain approvals.
This will allow housing projects to get approved and permitted by staff “without further approval from elected officials.”
The bill analysis notes, “Projects reviewed ministerially, or by-right, require only an administrative review designed to ensure they are consistent with existing general plan and zoning rules, as well as meet standards for building quality, health, and safety. Most large housing projects are not allowed ministerial review. Instead, these projects are vetted through both public hearings and administrative review.”
Unlike SB 9 and SB 10, with huge amounts of underutilized commercial centers, this bill has a chance to be the kind of gamechanger that the legislature needs to address the housing shortfall.