Legislature passes bill that promotes housing with carrots and sticks

Gov. Gavin Newsom, who announced a plan to reward cities that meet housing quotas and punish those who don't, is seen at a May 9 news conference at the Capitol. AP file photo.

Daily Post Correspondent

A bill that would allow the state to fine cities as much as $600,000 a month if their housing plans don’t meet state requirements has been passed by both the California Assembly and Senate.

Assembly Bill 101 would also reward cities that are considered “pro-housing,” a designation that could be based on factors such as reducing parking requirements for housing projects or providing financial incentives for housing. The pro-housing cities would receive more points when applying for certain state grants and programs.

Gov. Gavin Newsom is expected to sign AB101. Newsom and legislative leaders issued a joint statement late last month praising the plan for “strong incentives — both sticks and carrots — to help spur housing production across this state.”

The Assembly and Senate both passed the bill early this month. The governor has 12 days to sign or veto a bill after it is sent to him, otherwise it becomes law without a signature. It wasn’t immediately clear yesterday whether the 12-day clock was ticking.

AB101, introduced by the Assembly Budget Committee, is part of the state’s spending plan for the 2019-20 fiscal year. Although Newsom has signed the main budget bill for the fiscal year, AB101 is what’s known as a trailer bill that required further legislative action.

The League of California Cities said the bill “provides the details of the collaboration and compromise that took place over the last seven months between the governor, the Legislature, and stakeholders.” The League said on July 8 it was expecting the governor to sign the bill “in the coming days.”

Newsom rolled out his first budget proposal in January, including proposed funding to help cities increase housing production. But the League noted the earlier proposal also would have given the state power to take away transportation money from cities that didn’t meet housing quotas as well as set land-use policies for such cities. Those provisions were removed from the final version of the state’s spending plan.

Adding to the recent debate over local control of zoning for housing projects is state Sen. Scott Wiener’s SB50, which threatens to bypass local zoning to allow higher density housing near jobs and transit corridors. The bill has been put on hold for now, but is expected to be revived in the Legislature next year.

Putting ‘teeth’ into state housing laws

Wiener said in a statement last month that he supports the housing trailer bill for this year’s state budget, saying it “puts teeth into existing state laws, to ensure cities and counties actually follow those laws.”

But Wiener said more action is needed to address the state’s housing shortage, which he pegs at 2.5 million to 3.5 million homes.

“We need better and stronger state housing laws that ensure we zone for enough housing, expedite housing approvals, avoid sprawl, protect renters, and fund affordable housing on an ongoing basis,” Wiener said.

AB101 includes $650 million in grants for cities and counties to address homelessness issues. It also includes $250 million for local governments and regional bodies to measure housing needs and develop plans for providing more housing.

Cities must keep housing plans up to date

The penalties outlined in the bill pertain to city housing elements, which are part of a city’s general plan that must be updated at least every eight years.

“California’s housing-element law acknowledges that, in order for the private market to adequately address the housing needs and demand of Californians, local governments must adopt plans and regulatory systems that provide opportunities for (and do not unduly constrain), housing development,” the state Department of Housing and Community Development says in describing housing elements.

Only about 42 of the state’s 539 cities and counties are out of compliance with housing element requirements, and none of those are in Santa Clara or San Mateo counties.

Under AB101, courts would order cities that don’t meet housing element requirements to come into compliance. Fines could be issued for non-compliance, starting at $10,000 to $100,000 per month, and increasing after three months and six months, to as much as $600,000 per month.