California cities killed a sweeping housing reform bill. Can Gavin Newsom find another option?

After California’s most sweeping housing reform proposal died in the Legislature last week, Gov. Gavin Newsom has few options as powerful as Senate Bill 50 to fulfill his campaign pledge to address the state’s affordability crisis.

SB 50, authored by state Sen. Scott Wiener, was the only legislation that aggressively tackled zoning restrictions to force local governments to authorize taller buildings and other multi-family housing near “transit-” and “jobs-rich” areas.

Newsom said he was “disappointed” with the decision by the Senate Appropriations Committee to set aside the measure for the year.

“California must address the housing supply shortage head on,” he said, “and we need to be able to use every tool in the toolkit to address this systemic crisis.”

The new governor prioritized housing and homelessness solutions in a $1.75 billion budget proposal earlier this month, calling California’s slow construction “deplorable.” He set a target during his campaign last year for the state to build 3.5 million new residences by 2025.

This year, he urged lawmakers to support his efforts and deliver a legislative package he could sign.

But the Democratic governor’s options have narrowed.

While several housing reform measures remain alive this year, there’s “not really a Plan B on zoning reform,” said .David Garcia of the Terner Center for Housing Innovation.

“There’s still plenty on the table, which can be very impactful for the state of California,” Garcia explained. “But SB 50 was the most significant, transformational bill. Now you don’t have any vehicle moving forward.”

Rent control and tax credits

A handful of remaining bills chip away at local regulations, and a few promise tenant and affordable housing protections.

One proposal by Sen. Nancy Skinner, D-Berkeley, for instance, bars local governments from “downsizing” by replacing multi-unit buildings with ones for fewer residents. Her Senate Bill 330 also bans the demolition of affordable units unless residents are offered accommodation.

A joint effort by Rob Bonta, D-Alameda and David Chiu, D-San Francisco, would substantially increase renter protections. Bonta’s Assembly Bill 1481 establishes a just-cause eviction mandate and allows tenants to contest a decision to throw them out. Chiu’s Assembly Bill 1482 prohibits “egregious rent increases” by capping how much landlords can raise rent.

Rent control faces an uphill climb to pass a floor vote. Last year, California voters rejected a rent control initiative, Proposition 10.

Another bill by Chiu would expand tax credits for low-income housing, adding about $324.5 million in new development incentives.

And Senate Bill 5 by Sen. Jim Beall would pull $2 billion from property tax revenue to pay for local affordable housing and infill projects.

“My bill goes toward creating a partnership with local governments,” the San Jose Democrat said, describing SB 5 as a “financial stream” that gives local agencies power to spearhead their own housing initiatives.

Housing advocates say those bills don’t collectively deliver the punch of SB 50, which threatened to supersede city rules and spur housing across the state.

Although the bill was crafted to spark construction in urban centers, it also imperiled zoning laws in cities from Davis to Clovis.

Local leaders from the Central Valley joined city officials in the Bay Area and Southern California to complain, arguing Wiener’s legislation undermined their own carefully built housing plans.

“By allowing developers to override state-approved housing plans, SB 50 seriously calls to question the need for cities to develop community based plans in the first place,” Riverbank Mayor Richard O’Brien wrote in an opposition letter on behalf of Central Valley cities.

Fresno Mayor Lee Brand said his city’s general plan serves as a growth blueprint that is “way ahead of all other cities” and he questioned what SB 50 could offer that Fresno wasn’t already doing.

“It’s got to be a region by region, not a shotgun approach,” Brand said, noting that SB 50 wasn’t built for the Valley, but for coastal cities with more transportation and job hubs. “There’s no one bill that is going to evenly impact the varying types of communities across the state of California.”

Those frustrations are what drove Senate Appropriations chair Anthony Portantino, D-La Cañada Flintridge, to kill SB 50 until 2020. Portantino said Wiener needed to consider questions raised by local officials and before that happens, the legislation is not “ready to go to the floor.”

More apartments in East Sacramento

But not every city official scoffed at Wiener’s idea.

Sacramento Mayor Darrell Steinberg said he was an enthusiastic supporter of SB 50. Linking housing and transportation policy has long been an interest for Steinberg, who has framed political cartoons on his office wall referencing policies he pushed in the Legislature to encourage housing near transit.

“It could have a significant impact,” Steinberg told The Sacramento Bee. “But to me it’s a positive significant impact because Sacramento needs more affordable housing.”

Middle class residential neighborhoods in East Sacramento along the Gold Line, Land Park and Curtis Park, would be newly eligible for multi-family homes under SB 50, Steinberg said.

Wiener found another ally in Stockton Mayor Michael Tubbs, who said the affordability crisis in coastal cities has a “ripple effect” that increases pressure on his own city’s housing market.

“Part of the issues we have with housing in Stockton is because folks aren’t building the types of housing people need in the Bay Area and L.A.,” Tubbs said.

Wiener said he’s “100 percent committed” to moving the legislation forward next year.

“We need to do things differently when it comes to housing,” Wiener wrote. “We’re either serious about solving this crisis, or we aren’t. At some point, we will need to make the hard political choices necessary for California to have a bright housing future.”

Sophia Bollag contributed to this report.

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Hannah Wiley joined The Bee as a legislative reporter in 2019. She produces the morning newsletter for Capitol Alert and previously reported on immigration, education and criminal justice. She’s a Chicago-area native and a graduate of Saint Louis University and Northwestern.