In an effort to address California’s housing crisis, Governor Gavin Newsom recently signed two pieces of legislation to streamline the housing approval process for the state of California. One of the bills signed in late September, Senate Bill 6 (SB6), allows residential development on underutilized commercial zones originally restricted to retail, parking, and office spaces. Hoping to incentivize developers to build residential properties, this bill allows these properties to bypass the lengthy, and at times costly, rezoning requirements. Further streamlining the project’s approval process. To take advantage of this incentive, the applicants must provide a “skilled and trained workforce” as well as prevailing wages to construction workers.
Secondly, Assembly Bill 2011 (AB2011) will allow multifamily properties on commercially zoned land an exemption from the California Environmental Quality Act (CEQA) and access to a time-limited approval process if they meet certain Below Market Rate (BMR) affordable housing requirements. Outlined within the bill are two options to receive this incentive: the first is for properties reaching a 100% BMR and the second is for mixed-income properties that are located within “commercial corridors”. Similar to SB6, applicants must pay prevailing wages to construction workers as well as, “require contractors who employ construction craft employees or let subcontractors for at least 1,000 hours to participate in an apprenticeship program and make specified health care contributions,” on projects with more than 50 units.
Only time will tell if these incentives entice developers to build in commercial areas, but with the passing of these two bills, there is a potential for these pieces of legislation to produce over 2 million housing units for middle and low-income families across the state. Although these new legislations come with some requirements, the hope is that these incentives will increase the production of much-needed housing units, generate jobs with health benefits and good wages, and entice apprenticeships within the construction industry.
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