A Legislative Response to California’s Housing Emergency: Senator Skinner’s SB 330

How to Make a Good Bill Even Better

(This post is co-authored by U.C. Davis Law School Professor Chris Elmendorf) 

Last week, as President Trump harrumphed about the faux emergency on our nation’s Southern border, California State Senator Nancy Skinner introduced a potentially transformative bill that addresses California’s real emergency: the ever-escalating cost of housing in the state’s economically productive metropolitan regions. As this post will explain, Skinner’s new bill, SB 330, is a hugely important milestone in the evolution of state land use and housing policy, but it still falls short of what’s needed. Happily, there is a fairly straightforward (and conveniently low-visibility) way to fix the bill’s shortcomings.

What’s Great About SB 330

Starting as far back as the 1970s, California has enacted a huge range of mostly ineffectual remedies for the arbitrary and excessive barriers to new housing that local governments continue to throw up. In addition to being (largely) ineffectual, most of the state’s mandates have one other thing in common: they apply indiscriminately to local governments throughout the state, paying little heed to differences among jurisdictions in housing demand, supply restrictions, development potential, or planning capacity.

SB 330 is different. It recognizes that the housing crisis now afflicting San Francisco, whose median home would cost you $1.2 million, is not really a crisis in, say, Fresno, where the median house barely crests $200,000. Most of SB 330’s provisions would apply only to a subset of “covered” jurisdictions, defined by average rent and vacancy rates. The idea of tying state housing remedies to market conditions is very important, and long overdue. San Francisco needs to permit loads of new housing. Fresno does not.

SB 330’s “coverage” strategy is also politically advantageous. State legislators can pull specific jurisdictions out of the bill’s reach by adjusting the coverage formula or cutoffs. Back in the 1960s, Congress used the same strategy to pass the Voting Rights Act. The VRA created special protections for black voters in most of the Jim Crow South, but its coverage formula was reverse-engineered to exclude Texas. This was the price of getting the bill across the finish line.

SB 330 would impose a panoply of new controls on the jurisdictions that it covers. Among other things, SB 330 would prohibit covered jurisdictions from applying any off-street parking requirement to new housing proposals, and it would prevent them from making their zoning more restrictive, from enacting new caps on building permits, and from applying fees or historic-preservation ordinances retroactively.

However, apart from the parking provisions, SB 330 does nothing to erode the thick accumulation of growth controls, excessive zoning restrictions, cumbersome permitting procedures, exorbitant fees, arbitrary code requirements, and layers of discretionary review that already exist in the covered jurisdictions.

 

How to Improve SB 330

SB 330’s glaring omission—its failure to remove existing barriers to housing in the high-cost jurisdictions—probably reflects a political calculation. If the bill were to enumerate certain “excessive” barriers to housing which local governments could no longer enforce, it might become too hot to handle.

But an effective attack on existing barriers to new housing needn’t be so overt. As one of us (Elmendorf) explains in a draft law review article, the California Legislature could bring about the elimination of many of these restrictions simply by tweaking the legal standard for determining whether a local government’s housing plan complies with state law, and by authorizing mayors to promulgate interim housing plans.

Let us explain. Since 1980, California has required its local governments to revise the “housing element” of their general plans every 4-8 years. The housing element is supposed to explain how each local government will accommodate its fair share of regional housing needs. It must include an analysis of local constraints to the development of housing, and a schedule of actions addressing those constraints. Local governments must submit their periodically updated housing elements to the state Department of Housing and Community Development (HCD) for review and approval.

But there’s a hitch. The legal standard for what constitutes a “substantially compliant” housing element has no teeth. So long as the housing element “contains the elements mandated by the statute,” the courts will uphold it. Whether it will actually result in construction of the target number of units has been regarded as a question of “workability” or “merits,” and irrelevant as matter of law to the housing element’s validity.

This deferential approach makes some sense for the Fresnos of the world, but it’s a disaster for the San Franciscos. SB 330 is thus the perfect vehicle for a solution. California should enact a new definition of “substantial compliance” that applies only to the high-cost jurisdictions covered by SB 330. In these jurisdictions, a housing element should be deemed compliant only (1) if it is likely to result in production of the targeted amount of new housing over the planning cycle; or (2) if it removes, or commits the local government to removing, all unreasonable constraints to the production of new housing. Discrete, removable constraints which are identified in the housing element but not reformed on schedule should become inoperative as a matter of state law. And if a local government fails to adopt a new, substantially compliant housing element on schedule, state law should authorize the mayor (with HCD’s approval) to promulgate an interim housing element, which would govern housing development in the meantime.

These seemingly small-bore reforms would have far-reaching consequences. Initially, they would make it easy for a city’s elected leadership to suspend exclusionary, voter-adopted growth controls, while deflecting blame to the state. If a housing element lists a voter-adopted restriction on its schedule of (unreasonable) “constraints,” and if the city’s voters fail to approve an adequate reform by the appointed date, the constraint would be repealed by operation of state law. While local officials may have some reservations about putting voter-adopted measures on the chopping block, the state-law framework would give them cover. “The state pushed us to do it; we had to or else we’d lose our state funding,” they can say.

And if mayors can promulgate interim housing elements when cities would otherwise be out of compliance, this will shift cities’ land-use policies toward the mayors’ preferences. Mayors, who are elected citywide, tend to be less responsive to neighborhood NIMBY groups than city councils. Knowing that the mayor could issue an interim—yet legally binding—housing element, city councils would make generous concessions ex ante to the mayor, in the hopes of avoiding a veto or other mayorally-induced delay of the council’s housing element.

Senator Skinner deserves major plaudits for SB 330. Now let’s make it even better.

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Reader Comments

2 Replies to “A Legislative Response to California’s Housing Emergency: Senator Skinner’s SB 330”

  1. I am having a hard time squaring the “exorbitant fees” that local government charge for processing development projects. But lets start at the beginning. Cities rarely build housing. Developers build housing. Since the federal government got out of public housing starting about 35 years ago – public housing programs that were good – there have been fewer funds for local government to subsidize housing. The will is there in some cities – but the ability is not. The so-called exorbitant fees are governed by state law which requires the jurisdiction only to charge the actual cost of processing as well as a fair share and legally defensible mitigation for roads, parks, water and sewage. Cities are constrained by the voters through Proposition 13, 18, 26 and so on. Instead of having property tax spread across the community to help grow and sustain the existing community, cities must charge the new development the full cost. Secondly, land investment in California benefits from the tax structure that allows a very low capitol gains tax on property thus monetizing land. This drives the cost of land up as a preferred investment. And lastly, we all have general plans that is the vision for the city. That vision may not meet big corporations in the Bay Area hunger for bigger and bigger. It is curious to me that the focus is blaming the cities who have done better than your piece describes. It is the rapacious growth of jobs that are not evenly distributed in the region. Why not put some of the burden on the big corporations to help pay for affordable housing, create jobs where jobs are needed, and the work force could work closer to home and save transportation costs. I am an advocate for infill housing, as well as reducing green house gases from fossil fuel transportation. Most important is that we are in this together and I am waiting for a strong voice from corporations that they are going to do their part. So far it seems like the blame game for cities and a free pass for corporations. For instance, other proposed legislation looks at mandating 60% market rate housing. Really? What we have here is a lack of affordable housing. Thus we need rent stabilization, eviction protections, homeless housing first, affordable housing and if those are met, then market rate housing.

  2. A quibble with a few things on this post, which I otherwise agree rightly points out that SB 330 is another major new bill from the legislature: 1) the bill does get at the discretionary review process by limiting hearings to three and putting a one-year cap on permit reviews — that’s a big deal; 2) new RHNA laws already tightened up the requirements that housing actually gets built, such as SB 35; 3) requiring locals to remove impediments to RHNA housing could mean a lot of staff time and further review, especially if it means upzoning — better to just do away with all of those through a bill like SB 50; and 4) putting the mayor in charge may not mean much, since many smaller cities have rotating mayors that are elected like any other city council representative.

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About Richard

Richard Frank

Richard Frank is Professor of Environmental Practice and Director of the U. C. Davis School of Law’s California Environmental Law & Policy Center. From 2006-2010, …

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