Good to Know News

Gov. Newsom signs bills that could build the foundation for more housing

The state has approved $22 billion in funding to build tens of thousands of homes — but millions are needed.

Laws aimed at increasing density, streamlining the approval process

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Housing affordability and availability are critical concerns for nine of every 10 Californians, and Gov. Gavin Newsom signed a lengthy list of bills this week that could ease the ever-increasing and far-reaching problem in the state.

Newsom, fresh off his victory in the recall effort, has signed a 31-bill housing package in recent weeks, with an emphasis on four key areas — making building new homes easier, eliminating barriers to build more affordable housing, addressing systemic bias by elevating fair housing principles, and holding cities and counties accountable to for their housing problems.

“The acute affordability crisis we are experiencing in California was decades in the making, and now we’re taking the necessary steps to fix it,” Newsom says. “This package of smart, bipartisan legislation boosts housing production in California – more streamlining, more local accountability, more affordability, more density. These bills, plus this year’s historic budget investments in affordable housing, will directly lead to more inclusive neighborhoods.”

Billions (of dollars) to build millions (of homes)

California has approved $22 billion to help develop more affordable housing and ease homelessness. The funding is expected to create more than 84,000 new affordable homes, with about half of those for people trying to escape homelessness. The California Comeback Plan includes $10.3 billion for affordable housing, $850 million for infill development and smart-growth projects, and even $100 million to help low- and moderate-income homeowners to build Accessory Dwelling Units (ADUs) — also known as granny flats or casitas — on their property.

The high-profile bills that Newsom signed included Senate Bills 8, 9 and 10.

Senate Bill 8 bans cities and counties from the ability to reduce density in certain neighborhoods without increasing the number of housing units in other areas until 2030. 

Senate Bill 9 — the bill that got the most attention — allows property owners to build a duplex on a single-family lot, or divide the land into two properties for a total of four housing units. A UC Berkeley Terner Center for Housing Innovation study found that hundreds of thousands of new homes are possible, even if only a small fraction of property owners take advantage of the legislation.

Senate Bill 10 allows local governments to approve smaller apartments and expedite construction of such projects in jobs-heavy and transit areas, such as those near light-rail lines.

Many cheers, but also some jeers

The 31-bill legislation was largely supported by the Democrat-led Assembly and State Senate, but some cities and counties challenged the moves, saying local control — and public input — are important on housing projects. In addition, many jurisdictions are already taking steps to create more affordable housing and increase density.

“California cities are taking significant steps to bring down the high cost of housing in our communities,” says League of California Cities Executive Director and CEO Carolyn Coleman. “By the end of 2022, all of the state’s major regional governments, including cities, will have identified and planned for more than 2 million units of additional housing statewide.  Rather than passing flawed legislation like SB 9, state lawmakers should instead work with local governments to provide the tools and resources to streamline local housing approvals and fund real affordable housing.”

Shortly after being elected, Gov. Newsom announced an aggressive effort to build 3.5 million homes over a five-year period, but development has been slow for numerous reasons, including the slowest approval process in more than four decades and, of course, the Covid pandemic. The U.S. Census Bureau estimates the Golden State needs at least 4 million more homes to meet the burgeoning demand.

But every home built matters and the housing legislation will help with the state’s housing crisis, says Dave Walsh, president of the California Association of Realtors.

“SB 8, SB 9 and SB 10 are prudent, reasonable actions in the path forward to helping the state reach its housing goals and create greater homeownership opportunities for working Californians,” Walsh says.

Ron Trujillo

Ron Trujillo

Longtime business journalist-turned-communications executive who enjoys reporting on residential real estate in his spare time.