Legislative Session Kicks Off

2021 Legislative Session Kick Off

Inland Center for Sustainable Development

Housing Update: January 2021

Legislative Session Kicks Off

The State Legislature has reconvened for the 2021-2022 legislative session. State Senate President Pro Tem Toni Atkins has indicated that housing will be a priority issue in this legislative cycle. The 2019-2020 session, by many accounts, was a relatively dismal year for the passage of significant housing legislation despite considerable optimism at the start of the cycle. Several bills including those from the Senate Housing Production Package that failed passage during the last session have been reintroduced.

Following is a summary of some of the notable bills introduced in the new session. Some are spot bills that act as placeholders, while others establish the premise and direction of the bill (intent), with details forthcoming.

Affordable Housing

ACA 1 would lower the voter approval requirement for local special taxes and general obligation bonds for affordable housing and public infrastructure from 66% to 55%. If approved by the Legislature, a constitutional amendment would then go to voters for consideration at a statewide election. (Recent housing bonds have lost despite receiving strong voter support, including the City of San Diego’s $900 million affordable housing bond, which failed in November despite having nearly 58% in support. The City of San Jose’s $450 million bond measure for affordable housing in 2018 failed despite getting 64% of the votes.)
SCA 2 (Senators Allen and Wiener) if approved by voters, would repeal Article 34 of the California Constitution, which requires voter approval for publicly financed affordable housing developments.

SB 5 (Senator Atkins and six other senators) is a spot bill to authorize bonds to finance housing-related programs that serve the homeless and extremely low-income households. The bond would be on the November 2022 ballot.

AB 68 (Salas) is an intent bill to implement recommendations from the recent auditor’s report on the performance of the state’s housing agencies and local impediments to housing production. The report found that the state’s four key financing agencies lack coordination and alignment. The report also stated that “State law and oversight are not strong enough to ensure that cities and counties are doing their part to facilitate the construction of affordable housing.”

AB 71 (Rivas/Chiu) is an intent bill to dedicate $2.4 billion annually to homelessness solutions. Revenue sources would include state adoption of the federal Global Intangible Low-Taxed Income, which taxes certain intellectual property generated overseas.

Land Use/ Zoning/Streamlining

SB 6 (Caballero, Eggman, Rubio and a number of coauthors) would allow housing developments as a permitted use in commercial zones. Such developments can be streamlined if, among other provisions, 50% or more of the site has been vacant for at least three years. This appears to be a re-do of last year’s SB 1385.
SB 7 (Atkins) would extend through 2024 the Jobs and Economic Improvement Through Environmental Leadership Act of 2011, which provides expedited judicial review of CEQA challenges for projects that meet defined environmental and labor requirements. Includes provisions that would allow expedited review if a project meets affordable housing unit thresholds. This bill looks similar to last session’s SB 995.

SB 8 (Senator Skinner) is a spot bill related to State Density Bonus Law. No details at this time.
SB 9 (Senators Atkins, Caballero, Rubio and Wiener along with three coauthors) would allow for duplexes and lot splits in single-family residential zones to be allowed by-right. At a glance the bill looks to be a re-do of SB 1120 from last year.
SB 10 (Wiener) would allow jurisdictions to adopt an ordinance to zone any parcel of land for up to 10 units of housing if it is located in a transit-rich or jobs-rich area or is an urban infill site. SB 10 appears similar to last year’s SB902. The ordinance will not require environmental analysis.
SB 15 (Portantino) would provide incentive grants to local governments that rezone idle big-box retail or shopping center sites to allow for housing.

Wildfire Mapping

SB 55 (Stern and Allen) would prohibit new housing development in high fire hazard areas.

SB 12 (McGuire) would require jurisdictions to identify the locations of very high fire risk areas in the land use element of their general plan. It would also require jurisdictions to update the safety element of their general plan to include a comprehensive plan to reduce the risk of wildfire related property loss and damage.

COVID-19-Related

AB 15 (Chiu) would extend key provisions of AB 3088, the COVID-19 Tenant Relief Act of 2020 from the last session. Among other provisions, the bill would extend the moratorium on evictions for nonpayment of rent from January 31, 2021 to December 31, 2021, as long as tenants pay at least 25% of the rent due.

AB 16 (Chiu) is an intent bill to deal with the long-term financial impacts of the pandemic on tenants, small landlords and affordable housing providers. No details at this time.

SB 3 (Caballero/Bradford) would extend anti-eviction protections from COVID-impacted tenants from January 31, to March 31, 2021.

SB 64 (Leyva) would prohibit managers of mobile home parks from terminating/attempting to terminate the tenancy of a homeowner or resident who is impacted by the COVID pandemic.

Governor Newsom’s draft 2021 budget: Funding for California housing and homelessness

As the state needs to build some 1.2 million more homes during the next decade (at an annual cost some estimate to be as much as $10 billion), the Governor’s draft $227 billion budget includes funding for housing as follows:

$1.75 billion in new investments for homeless housing, including $750 million to continue Project Homekey, an existing program that helps local jurisdictions buy hotels, apartments, and other buildings and convert them into homeless housing.
$250 million for purchasing/rehabilitating long-term care facilities and housing for low-income seniors.
$500 million in grants for infill housing projects within or near established neighborhoods. Funds could be used to pay for sidewalks, roads, lighting and other infrastructure
$500 million in tax credits for development of housing for low-income Californians.
$4.3 million to create a Housing Accountability Unit that will work with local governments to comply with requirements to build housing.

News and Notes:

Number of homeless could almost double in a few years due to COVID impacts: A recent economic forecast released by the non-profit Economic Roundtable concludes that the number of chronically homeless in Los Angeles County could nearly double by 2023. The report states that “Over the next four years the current Pandemic Recession is projected to cause chronic homelessness to increase 49 percent in the United States, 68 percent in California and 86 percent in Los Angeles County. Homelessness among working-age adults caused by the current recession is projected to peak in 2023, adding 603,000 working-age adults to those already without a place of their own to sleep in the United States. California is projected to be home to 131,400 of those additional homeless adults, with 52,300 in Los Angeles County swelling current homeless numbers.”

1 of every 4 jurisdictions in SCAG region file appeals on their draft RHNA allocations: 52 (26%) of SCAG’s 197 jurisdictions have filed appeals to the draft RHNA allocations assigned to them as part of the 6^th cycle process, which will cover the planning period October 2021 through October 2029. The Regional Housing Needs Assessment (RHNA) is mandated by State Housing Law as part of the periodic process of updating local housing elements of the General Plan. The RHNA quantifies the need for housing within each jurisdiction during specified planning periods. The total number of units assigned to the SCAG region by the Department of Housing and Community Development for this cycle is 1,341,827. Six jurisdictions in the Inland Counties have appealed, including Hemet, the County of Riverside, Barstow, Chino, Chino Hills and Fontana. Appeals are currently being heard by an Appeals Hearing Subcommittee formed by SCAG. Click here for a full listing of the jurisdiction seeking adjustments to their RHNA allocation.

Riverside County has highest percent growth (2010-2020) of all CA counties over 1 million people…:

Only Los Angeles County experienced a higher numerical change. Riverside and San Bernardino Counties combined added 397,990 people, more than Los Angeles County (354,346).

…but the State’s population actually decreased last year

The Census Bureau’s recently published 2020 state population estimates indicate that California, typically the countries leader in net migration, lost 70,000 residents last year. For the first five years of the last decade California gained more than 300,000 residents annually, with a total gain over that period of 1.6 million. Since 2015, California’s population gain has consistently decreased, reaching virtually zero in 2019, followed by last year’s loss. Click here for more information.

Home sales boom in CA despite median home price topping $700k…:

A California Association of Realtors January report notes that tight supply and steady demand from homebuyers have contributed to the continued increase in home prices. December’s statewide median home price was $717,930, up 2.7 percent from November and up 16.8 percent from December 2019. November, 2021 saw the highest level of home sales in nearly 15 years. 35.5% of homebuyers paid more than asking price. Home sales for January broke the 500,000 sales benchmark for the first time since January 2009.

… yet Californians express concerns about buying a home now

CAR’s monthly survey of consumers (January 2021 Housing Sentiment Index) shows that Californians are increasingly pessimistic about the housing market. 25% believe now is a good time to buy, and 40% believe that it will be easier to find a home during the next 12 months. Conversely, 59% think it is a good time to sell (up 4% from just one month ago).

Nearly $80k annually is needed to purchase median-priced Inland County home

HSM.com has prepared a December 2020 report on incomes needed to purchase the median priced home in the country’s 50 largest metropolitan areas. For the Riverside/San Bernardino area, it takes an annual income of $77,727 to buy a median-priced home of $435,000, with a 20% down payment. With a 10% down payment the annual income needed increases to $95,012. The median family income in the metro area in 2019 was $70,954. Of the 50 largest metro areas the Riverside-San Bernardino region is the 13^th most expensive.

References:

California Legislative Information. State of California. Accessed January 25, 2021. https://leginfo.legislature.ca.gov/.