Mid-session housing bill update

Today I spent some time reviewing notable housing bills making their way through our state legislature and I’m summarizing the stand outs and adding limited commentary based on my experiences as a lawyer, real estate broker and housing activist.

I’m not a full time legislative analyst or lobbyist. I am a housing policy hobbyist. My summaries below are generally summaries of somebody else’s summaries. I did occasionally dive into the language of the bill. Enjoy my thoughts for your entertainment, but definitely do more research where a vote is required.

You can find a very accessible overview of the legislative process here. For anybody with a lot of time on their hands, the League of California Cities summarized all the bills it considers significant in this legislative cycle here. Find the 2022 Tentative Legislative Calendar here.

Assembly Bills

All of these bills are in play and require a successful Assembly floor vote by the end of May to move to the Senate.

AB 1771

• The California Housing Speculation Act: income taxes: capital gains: sale or exchange of qualified asset: housing
• Summary
  • this bill imposes a 25% tax on the seller’s net capital gain from the sale or exchange of real estate
  • tax might be minimized for longer term holdings
• My own commentary
  • called a “speculator tax,” this anti-flipper law was designed to prevent real estate investors from competing with first time home buyers for lower priced housing stock
  • as a real professional, I’ll tell you that what we’ll end up with is either dilapidated housing stock for sale to those first time buyers OR flippers who change their model to work with existing owners to fix up the property to a price still not attainable by first time home buyers
  • we will also end up with buyers stuck in their properties to avoid the penalty tax, freezing up much needed housing inventory
  • this tax basically steals 25% of your equity the day you buy for four years
  • the tax slides down for the next three years, but you’ll have to stay in your property for a minimum of 7 years to escape the tax altogether
  • there are exemptions for decedents and first time homeowners who used the property as their primary residence (but too bad for you if this is your second home)

AB 1910

• Publicly owned golf courses: conversion: affordable housing
• Summary
  • Department of Housing & Community Development would be required to provide incentives to convert municipal golf courses into housing and publicly accessible open space
  • funding could be structured to encourage affordable units
• My commentary
  • reportedly, this bill provides a CEQA exemption that would preclude public input into proposed projects
  • decimating municipal golf courses will do away with an affordable recreation alternative for seniors, kids and low income players and at the end of the day we may or may not get any affordable units out of the exchange

AB 2011

• Affordable Housing and High Road Jobs Act of 2022
• Summary
  • streamlined by right approval of multi-family projects in all office, retail and parking zones
  • union workers required, driving up the cost of the units
• My commentary: the author’s “High Road” reference is offensive

AB 2050

• Residential real property: withdrawal of accommodations
• Summary
  • the existing Ellis Act generally prohibits public entities from adopting rules compelling owners of residential real property to offer accommodations in their property for rent or lease
  • the Ellis Act also requires new owners of rent controlled properties to give notice of their intent to withdraw accommodations from rent or lease
  • this bill prohibits owners of less than five years from giving notice that units will be removed from the rental market
  • where notice to remove is allowed, a 10 year waiting period will be required

AB 2053

• The Social Housing Act
• Summary
  • this bill creates an entity called the “California Housing Authority” with a mission to eliminate the gap between housing production and the Regional Housing Needs Assessment (RHNA) targets
  • all social housing developed by the authority would be owned by the authority
  • some members of the authority would be appointed and others would be elected by residents of the social housing developments
  • development of parcels near transit would be prioritized
  • residents would operate and manage their own units
• My commentary
  • the RHNA numbers are greatly exaggerated and presently under audit; I’ll be writing more on this next month

AB 2097

• Residential and commercial development: remodeling, renovations, and additions: parking requirements
• Summary
  • the state’s Planning & Zoning Law requires each county and city to adopt a comprehensive, long-term general plan for its physical development
  • this bill will prohibit public agencies from imposing any minimum parking requirements in any type of zone if the proposed development is within 1/2 mile of public transit
• My commentary
  • our Westchester Playa Community Plan, currently under development, is part of LA’s general plan
  • to put this bill in context, Sepulveda to Lincoln is about one mile across and therefore subject to elimination of parking restrictions for the entire areas in between and up to 1/2 mile north of Manchester, which is most of Kentwood and Loyola Village
  • public transit is loosely defined and could shift with a changing bus route
  • nobody in LA or most of the rest of the State will walk 1/2 a mile to catch a bus, making 1/2 mile arbitrary and overly broad

SEnate Bills

All of these bills are in play and require a successful Senate floor vote by the end of May to move to the Assembly.

SB 15

• Housing development: incentives: rezoning of idle retail sites
• Summary
  • upon funding, this bill requires a program to provide incentives in the form of grants to rezone idle sites currently used for big box stores and shopping centers
  • the grants are designed to compensate municipalities for seven years of lost sales tax from these sites
• My commentary
  • repurposing existing idle sites is more environmentally friendly than building ground up some place else and leaving these sites to decay

SB 897

• Accessory dwelling units: junior accessory dwelling units
• Summary
  • existing law authorizes local agencies to impose standards on ADUs, including parking requirements, height, setback, landscape, architectural review and max size
  • this bill will eliminate all such “subjective” standards, as well as the owner occupancy requirement
  • ADUs can be built up to 25′ as opposed to the current 16′
• My commentary
  • ADUs will get taller, bigger and jam more college kids on single lots in the middle of family neighborhoods
  • putting a 25′ ADU into the backyard of my own single story bungalow would be a blight on my neighborhood and it certainly would no longer be “accessory” to my 1600′ bungalow

SB 922

• California Environmental Quality Act: exemptions: transportation-related projects
• Summary
  • CEQA requires an environmental impact study for projects with likely environmental implications
  • A CEQA exemption until 2030 for bicycle transportation plans in urban areas currently exists (passed in 2020 during COVID)
  • this bill eliminates the “urban” limitation and expands the exemption to any active transportation or pedestrian plan
• My commentary
  • these all sound like benign projects but the public will not be able to weigh in at all on any number of projects, such as transit prioritization, signal timing, light rail services, sidewalk widening and carpool lane conversion, to name a few

SB 1457

• Housing: California Family Home Construction and Homeownership Bond Act of 2022
• Summary
  • this bill seeks to create a $25B general obligation bond to increase first-time home ownership opportunities
  • $18B will be allocated for buyer down payment assistance
  • $7B will be allocated to finance construction costs
  • voters will have to approve the spending
• My commentary
  • the voters were willing to pony up for $4B for vets in 2018; will we be ready for another hand in our wallets 6x that size so soon?

assembly constitutional amendment

This bill proposes a constitutional amendment and originated in the Assembly.

ACA 14

• Homelessness and affordable housing
• Summary
  • this measure, called the Housing Opportunities for Everyone (or HOPE) Act creates a 10-year funding stream of approximately $10B/year for housing and homelessness projects with approximately 75% going to affordable housing construction and 25% for rental assistance
  • the measure will require a 2/3’s majority vote in both houses and then the voters will have to approve this constitutional change via ballot measure in November
• My commentary
  • can we afford both SB 1457 and ACA 14? I’ll be looking forward to the competing arguments when both get to the voters

Those are my thoughts on the current crop of housing bills. What are your thoughts? Hit me in the comments. I love a good housing policy debate.

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