California Governor Gavin Newsom (D-CA) signed a comprehensive package of 56 housing bills into law on October 11. The package included many bills sponsored and championed by NLIHC’s five California state partners: California Housing Partnership, California Coalition for Rural Housing, Housing California, Non-Profit Housing Association of Northern California, and Southern California Association of Nonprofit Housing. The enactment of the new package follows the passage of other priority legislation in California in mid-September (see Memo, 9/25).
The new housing package includes the “Affordable Housing on Faith and Higher Education Lands Act” (SB 4), which was cosponsored by Non-Profit Housing Association of Northern California (NPH) and Southern California Association of Nonprofit Housing (SCANPH). SB 4 will provide a streamlined process for religious organizations and nonprofit colleges to develop affordable housing on their property regardless of local zoning restrictions. NPH and SCANPH led the push for SB 4 following its initial introduction in 2020 and again in the 2022 legislative session. Through persistent advocacy from a broad coalition, including multisector advocates from faith-based communities and higher education, SB 4 made it across the finish line this year.
“SB 4 creates a powerful new tool that harnesses the mission of our religious institutions and colleges to address the homebuilding needs of our state,” said Abram Diaz, policy director for NPH. “This law unlocks over 171,000 acres of land strictly for affordable housing production, creating a game-changing opportunity to house more veterans, seniors, people with disabilities, and other community members who need support. This is California policymaking at its best, by designing solutions that empower our community leaders to direct their resources to solve our most pressing problems.”
“Throughout Southern California, so often we’ve seen churches and other religious institutions with underutilized land that they want to use to build affordable housing to serve needy people in their communities. But they get bogged down by zoning limitations and all the lengthy costs and delays, so they give up,” said Frank Martinez, policy director for SCANPH. “We are really excited because SB 4 opens up so many of these natural partnerships for affordable housing and makes it easy for these developments to move forward.”
Under SB 4, eligible housing projects will be exempt from subjective local zoning restrictions and the California Environmental Quality Act (CEQA), a law that is often weaponized to block housing development. Projects will instead be approved by right. This provision will allow religious institutions and nonprofit colleges to develop multifamily housing on land currently zoned for single-family homes. SB 4 contains strong affordability requirements: homes must remain affordable to low-income households at or below 80% of area median income (AMI) for 55 years for rental housing and 45 years for homeownership opportunities. The law also includes labor standards to protect construction workers. For more detailed information on SB 4, see NPH’s online factsheet.
A recent analysis from the Terner Center for Housing Innovation found that faith-based organizations and nonprofit colleges own more than 171,749 acres of potentially developable land – nearly five times the size of the city of Oakland – that will be eligible for SB 4 incentives and large enough to serve as a site for affordable housing development. However, the report notes that the enactment of SB 4 is only a first step. Many faith-based organizations and nonprofit colleges will need further subsidies and technical assistance to unlock the full potential of housing development on their lands.
Other priority bills signed by Governor Newsom on October 11 include:
- SB 423: This bill extends the provisions of SB 35, a law that allows for streamlined affordable housing development in cities that fall behind on their housing production targets under the Regional Housing Needs Assessment (RHNA). SB 35 is currently scheduled to sunset in 2026, and SB 423 will extend it until 2036. For more information, see NPH’s summary of the legislative session.
- SB 267: The bill prevents landlords from requiring that rental applicants with housing subsidies offer their credit history to prove their ability to pay. Landlords must offer subsidized applicants the option to provide lawful, verifiable alternative evidence of reasonable ability to pay the portion of rent for which they are responsible.
- SB 482: This bill requires Housing and Community Development to offer capitalized operating subsidy reserves (COSRs), or money set aside to cover deficits in operating revenues, for special needs units funded through the state’s flagship Multifamily Housing Program. COSRs are primarily used for permanent supportive housing for extremely low-income (ELI) renters. The bill will make it more viable for housing funded through the Multifamily Housing Program to provide resources that meet the needs of people exiting homelessness. For more information, see California Housing Partnership’s summary of state policy priorities.
- AB 346: This bill improves the efficiency of the state low-income housing tax credit (LIHTC) by allowing the Tax Credit Allocation Committee to leverage state credits with either 9% or 4% federal LIHTC in years when tax-exempt bonds are oversubscribed. For more information, see the legislative factsheet.
- AB 1319: This bill makes key modifications to the Bay Area Housing Finance Authority to maximize its impact in the region. For more information, see NPH’s summary of the legislative session.
- AB 1386: This bill increases the flexibility of California’s veteran homelessness initiatives to ensure that veteran-specific supportive housing quickly and expeditiously rehouses veterans experiencing homelessness. By removing administrative barriers, the bill will enable veterans to access supportive housing, decrease vacancy rates, and maximize the impact of existing programs. For more information, see Housing California’s letter of support.
- AB 1449: This bill establishes a CEQA exemption for 100% affordable housing projects that meet rigorous labor standards and comply with specific environmental requirements. For more information, see the sponsor factsheet.
- AB 1633: This bill clarifies that the Housing Accountability Act prevents local jurisdictions from withholding or denying an environmental clearance to an urban infill housing development without sufficient evidence to justify further environmental study. For more information, see the legislative factsheet.
“Housing California applauds the Governor’s signature of AB 1449 (Alvarez), which will increase the supply of affordable housing and protect low-income Californians from displacement by exempting 100% affordable housing from the California Environmental Quality Act,” said Chris Martin, policy director of Housing California. “AB 1449 is the most recent of a number of streamlining bills passed by the California legislature since 2017, which increase housing supply by making it easier to overcome local opposition to new affordable housing while balancing environmental and labor concerns.”
As California housing advocates celebrate the monumental housing victories of the 2023 legislative session, they are also gearing up for the 2024 legislative session and preparing to address unfinished business. Despite its passage in the legislature with unanimous bipartisan support, Governor Newsom vetoed SB 18, the “Tribal Housing Reconstitution and Resiliency Act.” The bill would have created a first-ever, dedicated Tribal housing program to provide equitable access to financing for Tribes to produce and preserve decent, affordable, sustainable homes and to provide housing in a manner compatible with Tribal sovereignty and cultural heritage. The governor also vetoed a related bill, AB 371, that would have addressed barriers that routinely prevent Tribes from accessing Tribal set-asides in existing programs. Fortunately, Governor Newsom expressed his intention to establish a dedicated Tribal housing grant program in the next budget cycle and adjust program rules to better meet Tribes’ unique housing needs. For more information on SB 18, see the statement from California Coalition for Rural Housing (CCRH).
Housing advocates expressed disappointment with the veto, while committing to hold Governor Newsom to his word and ensure that the state prioritizes Tribal housing in the next legislative session. “SB 18 recognized that California’s native peoples have suffered generations of State-sponsored genocide, persecution, discrimination, land theft, marginalization, and displacement that have directly resulted in the chronic under-development of Tribal communities. Tribes experience poverty, overcrowded homes, houses with incomplete plumbing or kitchens, and rent burdens at twice the rate of the rest of the state,” said Rob Wiener, executive director of CCRH. “While the 2023 legislative calendar did not end with a new Tribal housing program set to become law on January 1 of next year, CCRH looks forward to continuing the fight for decent, affordable, and safe housing for California’s Tribal communities. Beyond that, we are thankful to all of our Tribal and housing partners who helped create the language, testify in committee, submit support letters throughout the process, and advocate for a better system, one designed by those who would be using it.”
Legislators will also consider AB 1657, which would place a $10 billion affordable housing bond on the ballot in a statewide election in the 2024 legislative session. AB 1657 passed the Assembly in 2023 and was converted into a two-year measure that will be reconsidered next year. Advocates will push for the legislature and Governor Newsom to place the $10 billion bond on the ballot in the November 2024 elections. For more information on AB 1657, see the legislative summary.
For more information about NLIHC’s five California state partners, visit: https://nlihc.org/housing-needs-by-state/california
For NPH’s summary of the legislative session, visit: https://nonprofithousing.org/2023-legislative-session-a-turning-point-for-housing-solutions/
For Housing California’s 2023 policy agenda, visit: https://www.housingca.org/policy/legislative-agenda-2023/
For California Housing Partnership’s 2023 policy agenda, visit: https://chpc.net/policy/state-policy/
For SCANPH’s bill tracker, visit: http://www.scanph.org/bill-tracker
For California Coalition for Rural Housing’s legislative priorities, visit: https://www.calruralhousing.org/legislative-priorities ive-priorities