Governor-Elect Gavin Newsom

Over the past two years, California’s Legislature and Governor Jerry Brown have demonstrated their determination to pass legislation to address the State’s growing housing affordability crisis. Many of these efforts respond to growing public recognition that the future of California’s economy depends on a housing market in which cities plan for and develop adequate housing for individuals and families at all socioeconomic levels. The trend is expected to continue in January 2019 when Governor-Elect Gavin Newsom, who ran on a platform to provide additional financial incentives to promote smart growth while holding cities accountable for their fair share of housing production, takes office.

Key Bills Signify Ambitious Housing Agenda

The new Legislature, which convened Monday, December 3, has already taken steps toward establishing a more equitable housing market with the introduction of several housing and homelessness bills, including:

AB 10 (Chiu) – With more than 20 co-authors from both the Assembly and Senate, the bill would increase the state low-income housing tax credit (LIHTC) to $500 million annually, including $25 million annually dedicated to farmworker housing, with increases to the total tied to the Consumer Price Index.

AB 11 (Chiu) – This bill would reinstate California redevelopment agencies, which were dissolved in February 2012. Redevelopment agencies historically utilized tax-increment financing and were key in providing financing for affordable housing developments, but were eliminated in the wake of the Great Recession. AB 11 also includes protections against the misuse of funds, a common criticism of the former redevelopment agencies.

SB 18 (Skinner) – The Keep Californians Housed Act aims to decrease evictions and resulting homelessness. The bill would require the rights and obligations of landlords to be easily accessible online and provide a sustainable source of funding for the California Emergency Solutions and Housing Program, which would administer rental assistance and legal aid funding to tenants experiencing eviction.

SB 48 (Wiener) – If passed, this bill would create a right to shelter for all homeless and unhoused individuals in the State and include the navigation center model, a best practice supported by many homeless advocates.

SB 50 (Wiener) – This bill is a more polished version of SB 827, which failed last legislative session. The bill aims to increase residential density near public transit centers by lifting local height and density restrictions within 1/4 to 1/2-mile to transit. The bill addresses previous concerns, including a 5-year deferment period for communities concerned with displacement and gentrification.

Bay Area’s CASA Process

Several of the newly introduced legislative measures, namely SB 18 and 50, have ties and have been influenced by the Bay Area’s CASA Process. CASA has been a regionwide process that convened diverse stakeholders to address housing affordability and it has been facilitated by LDC President and CEO Jennifer LeSar. On December 3, CASA’s Technical Committee approved a 10-element Compact, which proposes a housing legislative package encompassing tenant protections, preservation of affordable units, and the production of new units. The Compact will be presented to the CASA Steering Committee on December 12.   If you would like to bring a CASA-like planning process to your community, please email Jennifer LeSar.

Building on a Strong Foundation

These legislative developments build on the momentum created by the 2017 Housing Package, which included the Building Homes and Jobs Act (SB 2) and the Veterans and Affordable Housing Bond Act of 2018 (SB 3), which became the Prop 1 ballot initiative that passed with overwhelming support in November.

Earlier this year, the Legislature passed SB 828, which reforms the methodology used to set Regional Housing Needs Assessment (RHNA) goals. This change aims to create a more transparent and equitable process, and better hold jurisdictions accountable for producing units toward their goal.

In an effort to protect housing for low-income households, including those who are homeless, the Legislature also passed AB 3194, which prohibits jurisdictions from rejecting a development of very low-income, low-income, or moderate-income housing or an emergency shelter without evidence to demonstrate that it would have a “specific, adverse impact upon the public health or safety.”

Other key bills passed during the legislative session include:

AB 2923, which gives BART more autonomy over its land surrounding existing transit stops. BART has expressed interest in using the land to develop housing, including affordable units.

SB 918, the Homeless Youth Act of 2018, established further requirements for the Homeless Coordination and Financing Council. These requirements focus on the needs of homeless youth, including identifying best practices and providing program developments and technical assistance for youth-focused homelessness programs.

AB 686, which requires public agencies to uphold Obama Administration Fair Housing guidelines, which strengthen the Affirmatively Furthering Fair Housing (AFFH) provisions of the 1968 Fair Housing Act. HUD has tried to dismantle the AFFH clause, which is meant to protect against the legacy of redlining.

With more than 30 years of experience in the real estate development and investment banking industries, Jennifer LeSar, President and CEO, brings a diverse background to her work in community development and urban revitalization. Her technical expertise spans from policy and program development to comprehensive strategic planning for top executives and executive teams to the origination and underwriting of complex investments in equity funds, multi-family portfolios, historic, and low-income tax credit properties utilizing federal and state financing programs. Ms. LeSar’s educational achievements include two advanced degrees from UCLA – a Master of Business Administration in Real Estate, Finance and Nonprofit Management and a Master of Arts in Urban Planning. She received her Bachelor of Arts from Bryn Mawr College in Political Science and Economics. She can be reached at jennifer@lesardevelopment.com.