Housing supply

California governor signs bills to increase housing supply

California Governor Gavin Newsom has signed a legislative package that state lawmakers hope will help solve the state’s housing crisis.

He signed the package of 41 bills at a press conference Wednesday at the site of an affordable housing community project in San Francisco.

Newsom said the bills will speed the construction of new homes while creating thousands of well-paying jobs.

California Governor Gavin Newsom speaks Wednesday in San Francisco at a signing ceremony for a package of 41 housing bills.

California Governor’s Office

“It’s a moment in a journey to reconcile the original sin of the state of California, and that’s the issue of housing and affordability,” Newsom said.

“I think I ran for mayor of San Francisco arguing that there are more dogs in San Francisco than there are kids because we couldn’t afford to raise kids in the city and the San Francisco County,” said Newsom, who was that city’s mayor. from 2004 to 2011.

“California has made historic investments and taken unprecedented action to address the state’s housing crisis over the past four years,” Newsom said. “But we recognize that there is still work to be done – this smart and much-needed set of laws will help us build new homes while rebuilding the middle class.”

The state and major cities have issued billions of dollars in bonds to support affordable housing without seeming to be gaining much ground on this issue.

It also exhausted the last $2 billion in authorization from its No Place Like Home bond program in March. The program uses a high-income surtax to secure bonds used to fund supportive housing projects for homeless people with mental illness.

High housing prices can drag down the overall state economy by encouraging emigration to lower-cost states; S&P Global Ratings sees high house prices somewhat offsetting the credit strengths underlying California’s AA-minus rating and positive outlook.

Newsom has signed hundreds of bills as the Friday deadline to sign or veto bills sent by the Legislative Assembly approaches.

“I have 400 bills on the desk and I have less than 72 hours left,” Newsom said. “I’ll work on that when I get back to Sacramento.”

There’s no one to blame for California’s lack of housing, Newsom said, “but ourselves. It happened on our watch, all of us.”

Newsom said the agreement represented by the housing legislation represents a step forward in which the state and cities are responsible for finding a solution.

Two of the most debated bills, Senate Bill 6, authored by State Senator Anna Caballero, D-Merced, and the 2011 Assembly Bill, introduced by Congresswoman Assembly Buffy Wicks, D-Oakland, is helping convert underutilized commercial properties into housing, in part by rezoning commercial and office space for housing.

Both bills guarantee union-wide wages and promise an accelerated construction process, while keeping development close to downtown areas to help the state meet its environmental goals and avoid sprawl.

They were signed by Newsom following an unprecedented agreement between unions, developers and affordable housing groups.

The State Building and Construction Trades Council of California supported SB 6, along with builders and business groups, while the California Conference of Carpenters and the Service Employees International Union of California parted ways with other task forces. to support AB 2011. Ultimately, a coalition of lawmakers brokered agreements on both measures.

State and local leaders as well as labor leaders spoke in support of the efforts at the event.

Apartment construction in Irvine, California in 2020. New state laws will make it easier to build apartments and houses, lenders say.

Bloomberg News

“The housing crisis threatens the long-term viability of our state, said Senate Majority Leader Mike McGuire. “It’s a threat to the California economy, which is fifth the biggest in the world.”

He said 78% of very low-income Californians spend more than half of their income on rent, and only about 25% of Californians can afford to buy a home in the state.

“We know it’s not sustainable,” McGuire said. “This morning represents a watershed moment. This legislation will reduce development costs and revitalize urban centers within city centers. It will create thousands of jobs that will pay families sustainable wages.”

The deal would not only bring new housing but help replace retail jobs lost as malls faltered, Caballero said.

“Malls are closing in the Central Valley and nothing will replace that, but I’m happy with this bill. It will put people to work,” Caballero said. “It’s also a commitment to building sustainably and creating walkable villages. Those were tough votes, but we both appreciate those votes.”

It’s not right that California has one of the lowest homeownership rates in the country, or that 163,000 homeless people are on the streets every night, or that realtors in the Bay Area tell potential owners to “drive until you qualify; that shouldn’t be their motto,” Wicks said.

“It’s not fair for teachers to drive four hours and beyond from Oakland to their homes,” Wicks said.

“It contributes to climate change, and it’s not good for the city of Oakland and other communities where teachers can’t spend time,” Wicks said.

“That’s why I worked to build a coalition around AB 2011,” she said.

Newsom also announced $1 billion in rewards for 30 shovel-ready projects through the California Housing Accelerator, funding that is expected to fund 2,755 new homes for Californians.

The governor took questions from reporters, including one asking what happened to his 2018 campaign pledge to lead an effort to build 3.5 million housing units by 2025.

“When I announced this goal, I didn’t say it was a promise, I said it was a challenge to be solved,” Newsom said.

Newsom called 3.5 million a lofty goal based on what a McKinsey & Co. report said needed to address the state’s housing crisis.

“This analysis done by McKinsey indicated that this was the number needed to solve the problem. I said it was an ambitious goal, and it is a goal that we are trying to achieve” , Newsom said.

In the first six months of this year, Newsom said the state had licensed more than 200,000 units, the most since 2006, and the state had just ended “and I’m excited.”

He also said that since taking office, the state has approved $14 billion in funding to continue efforts to address the housing crisis.

“Michelangelo said the biggest risk isn’t that you aim too high and miss, it’s that we aim low and get there,” Newsom said.