SB 827 (To Boost Homes Near Transit) Killed In Committee

Setback reveals tough politics behind restrictive housing policies & potentially guides new path forward

Yesterday afternoon, SB 827 (Wiener) was killed in its first committee. Though a number of legislators acknowledged California’s severe housing shortage, few were willing to risk the political backlash of taking on the local government lobby.

The bill needed 7 votes on the 13-member Senate Transportation and Housing Committee but only got 4. Here were the votes in favor, from the San Francisco Chronicle tally:

  • Sen. Ted Gaines, R-El Dorado Hills: Yes
  • Sen. Mike Morrell, R-Rancho Cucamonga (San Bernardino County): Yes
  • Sen. Nancy Skinner, D-Berkeley: Yes
  • Sen. Scott Wiener, D-San Francisco: Yes

Notably, the bill pulled in two Republican representatives (Sen. Gaines and Morrell) from inland areas, as I suspected. Politically, they should have an interest in keeping displaced liberal voters from moving into their districts for super-commutes and cheaper housing. Meanwhile, Sen. Skinner was a bill co-author and Sen. Wiener of course authored the bill.

Then the “no” votes:

  • Sen. Jim Beall, D-San Jose (chair): No
  • Sen. Anthony Cannella, R-Ceres (Stanislaus County) (vice chair): No
  • Sen. Benjamin Allen, D-Santa Monica: No
  • Sen. Bill Dodd, D-Napa: No
  • Sen. Mike McGuire, D-Healdsburg: No

Most of these senators represent upscale areas with affluent homeowners. Most are Democrats. Surprisingly, Republican Sen. Cannella voted against it, even though the bill only affected 2.4 square miles (or 0.0%) of his entire district. Sen. McGuire and Dodd’s districts were also barely affected by the legislation. Notably, Sen. Allen represents transit-rich Santa Monica, a predominantly wealthy homeowner enclave, while Sen. Beall represents some exclusive neighborhoods in the San Jose area.

And for reasons that are unclear to me, these senators did not vote:

  • Sen. Cathleen Galgiani, D-Stockton: Not voting
  • Sen. Richard Roth, D-Riverside: Not voting
  • Sen. Andy Vidak, R-Hanford (Kings County): Not voting
  • Sen. Bob Wieckowski, D-Fremont: Not voting

Given these votes, it’s clear SB 827 has a long way to go (politically speaking) to convince state legislators that even a relatively modest check on local zoning authority to allow more housing near transit is needed.

The fallout from the vote should be obvious. Any hope for big sweeping changes in local restrictions on homebuilding will not happen anytime soon. Businesses around the state and country have likely taken note, when it comes to deciding whether to stay in California or locate a new business here. The message from the legislature is clear: California is not serious about solving its housing shortage anytime soon.

And it’s a tough message for those struggling to pay rent or start a life here. It was always going to take years to repair the damage from decades of under-building homes in the state, relative to population and job growth. And now the state is delayed yet another year or longer from implementing meaningful solutions.

The displacement problem will also worsen. Despite opposition from tenants rights groups, SB 827 was their best hope at addressing the root causes. The bill would have helped reduce regional housing shortages that push wealthier residents to buy up existing units in the absence of new ones, and, as this letter from noted fair housing experts explains, it would have helped open up wealthier, racially homogeneous enclaves to more diverse residents. Instead, tenants rights groups focused on boosting rent control as a solution. But that policy is really just a last-ditch effort to protect the dwindling low-income renters left in our cities, hanging on against the tide of gentrification unleashed by the regional housing shortage.

The defeat also means further exodus from the state of middle class residents, as well as the displacement to the fringe of megacities of working class residents. From these exurban areas, they’ll continue “super-commuting” into job-rich city centers, spewing air pollution from their cars, congesting the freeways, and sprawling out in cheap housing over former farmland and open space.

And this isn’t some dystopian future. This dynamic is already happening right now. The failure of SB 827 just means we’ve locked this future into place for years to come.

So what is the path forward? Big reform is likely dead. Incrementalism will replace it. But the basic approach shouldn’t change, because the problem (housing shortages with high demand) and its primary cause (local government restrictions on housing) will persist.

Here are some options:

  1. Focus an SB 827-type approach on allowing more housing on commercial and mixed-use zones near transit. Since these lands are commercial in nature, there won’t be any concerns about displacement of existing residents. Think redevelopment of strip malls and parking lots to allow housing and mixed-use development as the highest and best use.
  2. Narrow the scope of SB 827 to major rail transit stops only. The original bill included high-quality bus stops, which greatly expanded the geography of the bill, thus expanding an opponent base of hostile local governments. Conceivably, a narrower scope might help the chances of passage (although the “no” votes of representatives with almost no land affected by the bill in their districts should provide some caution on this point).
  3. Move forward incrementally with parking and density relaxations near transit. The bill originally included these provisions but also allowed higher height limits. Neighbors tend to react most reflexively against taller buildings, in my experience. A focus on parking and density may be less controversial (although previous efforts to deregulate local parking requirements failed, so this would by no means be an easy lift).

I’m sure other ideas will come forward in the days and months ahead. Pro-housing advocates will likely only grow in rank and intensity as the housing affordability problem worsens, and they’ll be back with new proposals.

Credit is due to Sen. Wiener, Sen. Skinner and the other co-authors: they have finally gotten Californians to focus on the primary source of the housing shortage. And the first step to solving any problem is identifying its cause. With all the national attention and conversation, SB 827 certainly accomplished that goal.

, ,

Reader Comments

3 Replies to “SB 827 (To Boost Homes Near Transit) Killed In Committee”

  1. It’s a false premise to argue that we can build ourselves into housing security. When demand is bottomless, prices will continue to soar. SB 827 wouldn’t bring housing prices or rents down; it would have just provided more high-end units that would sell for as much as the market will bear. Unless Californians reinstitute rent control, mandatory inclusionary housing in the form of deed restrictions in perpetuity, impose strict limits on short-term vacation rentals and prohibit foreign investments–none of which will ever happen, realistically–bills like this will primarily benefit developers, realtors, investors and high-end buyers, to the detriment of established communities which will shed long-term, modest-income residents at a faster pace.

    Ultimately, this is an example of how issues of social equity and environmental justice are being hijacked by an industry that seeks to profit from its misappropriation.

    1. In no other context would someone argue that supply has no bearing on price, but somehow with housing people claim this all the time. Demand is not “bottomless” — it’s directly a function of job and population growth. Sure, there may be some induced demand if more supply is available, but we are so far from that point in California it’s not worth worrying about now. Meanwhile, if all SB 827 would do is provide more high-end units (as you claim), where do you think those high-end buyers will go without that new unit built? Will they evaporate? No, they will buy an existing property and continue to gentrify and displace, as we’ve seen on steroids. And adding more costs to units through inclusionary zoning depresses supply and makes economically feasible only those high end units that you decry. I’d rather see those units built through density bonuses or funded more equitably (such as through taxes or bonds). We otherwise can’t have it both ways: demand developers pay all these fees and include below-market rate units, but then complain when they only build luxury units and let entitled units languish in the pipelines due to the lack of penciling.

Comments are closed.

About Ethan

Ethan Elkind is the Director of the Climate Change and Business Program, with a joint appointment at UC Berkeley School of Law and UCLA School of Law. In this capacity, h…

READ more

About Ethan

Ethan Elkind is the Director of the Climate Change and Business Program, with a joint appointment at UC Berkeley School of Law and UCLA School of Law. In this capacity, h…

READ more