Gavin Newsom Wants To Fix California’s Housing Crisis. So What Are His Options?

Gov. Gavin Newsom says California’s housing affordability crisis is so severe that he wants a bit of everything to solve it.

California Governor Gavin Newsom and Megan Colbert compare notes on raising toddlers as she shares her struggles as a single parent while talking about affordable housing issues on Tuesday, March 26, 2019 in Sacramento. Newsom held a round table discussion to address housing affordability and rising rents. Renée C. Byer

That means seeding construction for millions of new residences, opening the door to a new rent control law and finding ways to protect low-income families from eviction.

Three months ago Newsom challenged lawmakers to get him housing proposals that he could sign into law. He’s put his office to work, too, setting aside $1.75 billion in his budget to spur home construction, and threatening to sue cities that fail to create plans for affordable housing.

“No one can disagree that we have a housing crisis in the state of California, highlighted by the fact that we only built 77,000 housing units last year. Which is deplorable,” Newsom said when he unveiled his updated budget during a May 9 press conference.

Democrats in the Legislature responded with a wave of housing bills this year. Here’s a look at the ones that could still reach Newsom’s desk.

A ‘dense housing’ bill

A leading housing proposal is Senate Bill 50, which would rewrite zoning regulations and force cities and counties to allow “high density” housing construction near transit hubs and job centers.

The proposed solution requires the state’s largest counties to allow taller buildings — and therefore more units — within half a mile of rail and ferry stations, as well as within one-fourth mile of a bus stop. SB 50 also allows developers to construct “fourplex” buildings throughout the state.

Sen. Scott Wiener, D-San Francisco, is the bill’s main advocate. It won key support last month after it was amended to make some concessions for rural communities at the request of Sen. Mike McGuire, D-Healdsburg.

It still faces opposition from local governments that want to keep the state out of their zoning decisions, and housing activists who worry new construction might displace longtime residents.

Capping ‘egregious rent increases’

Newsom applauded an Assembly committee in late April, after members passed a bill that imposes a rent increase cap of no more than 5 percent above the Consumer Price Index.

“The California Dream is in peril if our state doesn’t act to address the housing affordability crisis,” Newsom said after Assembly Bill 1482 earned approval from the committee.

The proposal tries to protect tenants against “egregious rent increases,” the bill’s author, Democratic Assemblyman David Chiu of San Francisco, said.

But AB 1482 faces additional challenges in future hearings and floor votes. Voters rejected Proposition 10, a rent control ballot initiative, last year. Critics argue the legislation could disrupt market stability, discourage development and hurt property owners.

Establishing ‘just-cause’ eviction

Assemblyman Rob Bonta, D-Alameda, is sponsoring a just-cause eviction measure that cracks down on throwing tenants out for “no reason.”

Through Bonta’s legislation, Assembly Bill 1481, a landlord would have to provide tenants with an explanation for why they must leave their homes. AB 1481 would also allow renters the chance to contest the rationale.

The bill analysis states the measure would stymie homelessness, prevent mental health concerns that follow evictions, decrease racial segregation and stop discrimination of renters by landlords.

But the California Apartment Association has argued against the bill, saying that just-cause eviction would harm “owners (who) struggle to remove tenants who have no regard for their neighbors, tenants who destroy the property, and tenants who are involved in – and – invite gang activity.”

Creating a ‘state and local partnership’

Pulling $2 billion from property tax revenue, Senate Bill 5 would create a special fund that would help fund local projects to accelerate construction of affordable housing and infill projects.

The League of California cities is backing the bill, authored by state Sen. Jim Beall of San Jose and joined by McGuire.

“(SB 5) brings back a state and local partnership to fund affordable housing, to fund infrastructure, to revitalize neighborhoods,” said Jason Rhine, assistant legislative director with the League of Cities. “That bill, to the tune of $2 billion after 10 years, would go a very long way to spur housing construction.”

Banning low-income housing demolition

Newsom said California must prioritize housing preservation if the state wants to see a big increase in units.

That means ensuring developers don’t knock down multi-family homes to replace them with fewer residents.

Sen. Nancy Skinner, D-Berkeley, wrote Senate Bill 330 to ban the demolition of low-income and Section 8 housing. The sweeping proposal also places a “moratorium” on downsizing neighborhoods. Skinner uses the example of prohibiting a city that already authorizes four-unit buildings to reduce new development to three units or less.

Skinner said the housing crisis demands “bold action” and that California “can’t afford to wait,” which is why the bill includes a provision to streamline housing approval in cities that severely lack units.

More tax credits

A number of proposals in the Assembly would offer more tax credits to developers for affordable housing projects.

They are:

  • A proposed budget amendment that makes an extra $500 million available for affordable housing tax credits over the next five years.
  • Assembly Bill 10, which would set aside $24.5 million in additional tax credits for farmworker housing, up from today’s $500,000.
  • Assembly Bill 791, which would provide $100 million in new tax credits to keep affordable homes in low-income areas and would create an additional $200 million in credits to build units in the same communities.

“The federal and state low-income housing tax credit programs are two of the most important housing production programs because they incentivize private investment and generate much-needed equity into affordable housing projects,” the California Housing Consortium wrote in an AB 10 co-sponsor letter.