A Major California Upzoning Bill Is Back, but Faces an Uncertain Future

Despite running into obstacles twice before, California’s housing supply-siders have re-introduced a controversial bill that would preempt local zoning laws statewide in order to legalize four-unit homes on residential land and allow the construction of mid-rise apartments near job and transit centers.

The state legislature has shot down versions of the bill, Senate Bill 50 (SB 50), twice now—once in 2018, and again last year. Sen. Scott Weiner (D–San Francisco), the bill’s author, is hoping that new amendments he added Monday will be enough to get the legislation passed out of the state senate before a January 31 deadline.

If Wiener’s press conference at Oakland City Hall tells us anything about the bill’s chances, it remains a tough sell.

“We have a terrible housing crisis in California here. We see the results every single day. We have a spike in homelessness, people are being forced into poverty, people are being pushed out of California,” Wiener said over loud jeers from the crowd. “We have a multi-million home shortage. We need more affordable housing. We need more housing of every variety and Senate Bill 50 will help us do that.”

The hecklers, according to reporters at the scene, were from the local Oakland group Moms 4 Housing, which describes itself as “a collective of unhoused and insecurely housed mothers” and which has taken to squatting in investor-owned vacant homes as part of a protest against the real estate speculation they blame for California’s housing crisis.

Housing Crisis clash on the steps of Oakland City Hall Sen @Scott_Wiener tried to announce amendments to his controversial transit density bill SB50. He’s shouted down by @moms4housing and others saying #SB50 doesn’t help build affordable housing pic.twitter.com/kIbJeBLzrC

— Susie Steimle (@SusieKPIX) January 7, 2020

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The protesters are members of one of two interest groups that Wiener has been trying to court with recent amendments to his bills, and whose support is essential to getting SB 50 passed; tenant activists and local governments.

The amendments that Wiener introduced Monday would provide more flexibility to local governments by giving them two years to come up with their own alternative upzoning plans, provided they zone for the same amount of housing that SB 50—which would legalize apartments up to five stories tall near rail stations, and smaller apartments in wealthier areas, according to the Los Angeles Times.

“A city could decide to go taller in some areas and shorter in other areas or to focus density in some areas but not other areas,” Wiener wrote Tuesday in a post on Medium outlining his amendments.

State authorities would be in charge of certifying if these local rezoning plans satisfy the bill’s requirements. In addition to zoning for an equivalent amount of housing, these local plans would also have to show that they are not increasing vehicle miles traveled and that they are not exclusively upzoning in lower-income communities.

The latter provision is meant to address the concerns of tenant rights groups and other anti-gentrification activists who worry that upzoning low-income areas will result in a bunch of luxury developments popping up, which will then raise rents and force out long-time residents.

Ameliorating that worry has been behind a number of amendments that Wiener has previously added to SB 50, including strict demolition controls that would prevent the redevelopment of land that’s had rental housing on it in the past seven years.

The bill also includes some pretty stringent affordability requirements. Developers making use of SB 50 to build apartments would be required to rent out as much as 25 percent of their new units at below-market rates to low-income tenants.

Lower-income neighborhoods, described as “sensitive communities” in the bill, would have five years, not two, to adopt their own local upzoning plan before SB 50 would kick in.

The changes have helped win over the support of some local governments. Wiener’s Medium post lists new endorsements from the mayors of Culver City, Carson, Alameda, and the Santa Clara County Board of Supervisors.

The government of Wiener’s own city, San Francisco, passed a resolution opposing SB 50 in December.

As the heckling at his press conference demonstrates, Wiener has had less success winning over anti-gentrification groups, most of whom fundamentally disagree with the idea that adding market-rate housing supply will help bring rents down.

Indeed, despite all the affordability and anti-demolition controls that the senator has added to his bill, activists are still writing finger-wagging op-eds telling him he needs to be a “better ally of unhoused people, housing insecure people, low-income people, and people of color.”

Times reporter Liam Dillon also notes that it’s still unclear if SB 50 has enough support in the state senate, where Wiener’s bill stalled last year, to get it to a floor vote. California Gov. Gavin Newsom (D) also has yet to endorse the bill.

This means that the fight for SB 50 will be an uphill one. In addition to having to pass out of the state Senate by the end of the month, the bill will also have to be approved by the state Assembly by the end of August.

From a free market perspective, the amendments added to SB 50 have generally been for the worse.

The more below-market-rate units developers are forced to include in their project, the fewer of those projects developers will build. The more parcels of land that are excluded from the bill’s upzoning provisions, the less housing supply it will ultimately add.

In addition, Wiener’s focus on spurring the construction of high-density housing near transit does nothing to peel back the state’s urban growth boundaries that prevent the development of affordable housing on the fringes of urban areas.

That’s by design, as SB 50 is supposed to serve as both a “climate bill” and a housing affordability bill.

Privileging one type of housing over another, however, is a clear attempt to interfere with a free market that would, in the absence of government constraints, probably add a lot of new multi-family housing and a lot of new suburban housing.

But at the end of the day, anything that allows private developers to add more housing supply in the state is a good thing. If SB 50 does that, it’ll be an improvement over the status quo.