California Governor Jerry Brown (D) released on May 13 the “May Revise” update to his 2016-2017 budget proposal, and it included a controversial proposal to expedite rental housing development approvals. Concerned with the extraordinary cost burdens experienced by California renters, Mr. Brown proposes to streamline approval timelines and reduce regulatory barriers by establishing a “by-right” process for attached multifamily housing that meets certain requirements. Under the proposed legislation, called “Streamlining Affordable Housing Proposals,” local governments would not be able to require discretionary reviews of new developments through tools such as conditional use or planned unit development permits. Instead, development proposals can only be blocked by local governments when documentation is provided to show that the new rental housing would not meet the criteria of existing local housing plans and zoning codes.
The California Department of Housing and Community Development (HCD) asserts that the new proposal would complement, rather than replace, local zoning codes and housing plans. Under the proposed change, all developments eligible for a “by-right” process must be located on sites designated for housing, and the proposals must be consistent with current zoning. HCD also touts the proposals potential to expand affordable rental housing. All developments created through this process will be required to provide 20% of all units affordable to low income households at 80% of area median income (AMI). For those developments proposed in Transit Priority Areas (TPA), either 10% of housing units must be affordable to low income households or 5% must be affordable to very low income (VLI) households with rents set at the 50% of AMI.
Housing advocates in California welcome Mr. Brown’s leadership on urgent efforts to produce more rental housing throughout the state, but have expressed concerns about specific elements of the proposal. Nine affordable housing and homelessness advocacy organizations submitted a letter to Mr. Brown on May 27, urging specific amendments and additions to the proposed legislation and promising their support if specific changes are made. Some of the proposed changes are included in updated language that was released as technical modifications to the proposed trailer bill on June 1. Advocates were successful in getting language added to ensure “no net loss” of affordable units. This provision stipulates that no development approved under the “by-right” process may provide fewer affordable units or higher rents compared with the rental housing it might replace. Other recommendations, such as expanding the required period of affordability from 30 years to 55, have not been included in the new legislative draft. The proposal must still be approved by the state legislature when they vote on the budget this summer, and advocates will continue efforts to improve the proposal.
Housing advocates believe strongly that development-by-right will be only one piece of solving the housing affordability problem in California. Additional funding for effective housing programs will be equally important. The coalition of advocates stressed in their letter the importance of the California Senate’s “No Place Like Home” legislative package that includes a $2 billion bond initiative for constructing permanent supportive housing for people who are homeless.
The coalition working to modify the development-by-right proposal include three NLIHC state coalition partners—Housing California, California Housing Partnership, and California Coalition for Rural Housing. Other signers of the letter are California Housing Consortium, Western Center on Law and Poverty, California Rural Legal Assistance Corporation, LeadingAge California, San Diego Housing Federation, and the Kennedy Commission.
Development-by-right is an idea that has been discussed for many years in California but has faced strong opposition from environmental groups and local governments. Mr. Brown’s by-right proposal will allow developments that include affordable housing to be exempt from the California Environmental Quality Act (CEQA), which requires various compliance measures to protect public health. Proponents for development-by-right argue that CEQA evaluations and sometimes the resulting legal challenges can tie up developments for years, exacerbating the shortage of available rental housing. A bill seeking to achieve the same development-by-right changes as Mr. Brown’s budget proposal recently died in the legislature.
“Development-by-right would help provide affordable housing developers with greater certainty and, in some cases, reduce the costs of long delays in local approvals and community review,” said Rob Wiener, Executive Director at California Coalition for Rural Housing. “This approach, however, is only one piece of a bigger puzzle and a relatively minor one at that. Governor Brown needs to show his support for affordable housing by embracing bold funding initiatives currently proposed by the legislature and not linking funding for affordable housing to passage of development-by-right legislation that mostly benefits market-rate housing.”
Another coalition of community organizations submitted a letter to State Senate President Kevin de Leon (D-Los Angeles) and Assembly Speaker Anthony Rendon (D-Los Angeles), specifically asking them to defeat the development-by-right proposal in the budget. The letter was signed by more than 50 statewide and community organizations who oppose Mr. Brown’s proposal both because the affordable housing requirement is not bold enough and because development-by-right will decrease opportunities for low income residents to have a voice the developments proposed for their communities. The letter contends that a public approval process is often the only opportunity for renters to oppose new developments that will drive up housing values and increase neighborhood displacement. Signers of the letter include numerous organizations representing communities of color and contends that gentrification will likely increase due to Mr. Brown’s proposal.
Read the HCD fact sheet on the “by-right” development approval proposal at: http://bit.ly/25PMIXU
Read the letter from housing advocates to Governor Brown urging modification of development-by-right at: http://bit.ly/1ZCtu4l
Read the letter from community organizations opposing development-by-right at: http://bit.ly/1XMhiAC