With great fanfare, the California legislature and Governor Gavin Newsom recently agreed to end the zoning of single-family homes as we know it.
To what extent two new laws will change neighborhoods or house prices have been intensely debated and it will likely take years to determine.
Housing prices in California are sky-high, and no one disputes that a growing portion of the population is deprived of home ownership, while rents consume a larger share of income.
Yet the legislature left two more bills on the table this year that could have been even more game-changing by providing more housing.
A measure would have allowed housing to be built on most commercial sites without changing the zoning. The other reportedly gave grants to local governments to dezone commercial properties to develop affordable housing for low and moderate income residents.
These two proposals – Senate Bills 6 and 15, respectively – were not as controversial as those for single-family zoning.
On the one hand, a large part of the businesses and offices targeted for the transition to housing are generally not located in traditional residential areas or, at best, on the outskirts of neighborhoods. There is less chance that the change will alter the character of the community because the existing uses tend to have a high impact, with significant vehicle traffic and people coming and going.
In addition, the idea of placing housing on commercial sites is attractive as many shopping malls, linear malls and office buildings are in difficulty or are closing. During this time, they tend to be on or near busy public transit arteries and corridors. Among the criticisms of the increase in density in single-family neighborhoods, the infrastructure was not built to cope with it.
This is not to say that there would not be concerns about whether there would be adequate parks, libraries and other residential amenities in the transformed commercial areas.
The bill allowing housing in commercial areas without zoning changes met with familiar opposition. Local governments said the state would usurp their authority. It was a major criticism of successful bills.
SB 9, by President of the Senate Pro Tempore Toni Atkins, D-San Diego, essentially allows the construction of duplexes on lots of single-family homes “of right.” It also allows for the splitting of lots under certain conditions, meaning that two duplexes could be built on the property. SB 10 increases the density up to 10 units on lots in urban infill sites or in certain high transit areas.
It’s unclear why the housing trade bills failed, but an apparent unresolved dispute was over a work issue. The proposals required developers to use a “skilled and trained” workforce to build the units. This means, as the Associated Press pointed out, that a certain percentage of workers must be enrolled in or have completed state-approved apprenticeship programs, mostly run by unions.
The developers objected, saying the wages required would increase the cost of building houses. The State Building and Constructions Trade Council of California said the provision would ensure reasonable and decent wages. Eliminating it would only mean bigger profits for developers, the council argued.
This union workforce requirement had already proven to be a deciding factor on other bills, according to the CalMatters news agency. Such a provision was not included in previous unsuccessful housing bills which met with strong opposition, including one last year to build affordable housing in church parking lots, and another measure to retail housing.
This obstacle was not an issue in bills aimed at increasing neighborhood density, at least in the end, in part because these measures relate to small, often individual properties rather than large commercial areas ripe for potentially projects. important.
Donors have said the commercial conversion bills hold great promise in facilitating more housing; AP said the zoning change was “such a problem that many developers don’t bother to try.”
However, some jurisdictions are already moving in this direction. One of them is the city of San Diego.
San Diego’s concept of “complete communities” encourages more housing coupled with nearby amenities such as parks. The city has been pushing mixed-use projects that include retail / commercial on the ground floor with upper floors of housing along transportation corridors.
Recently revised community plans, like the one adopted for Kearny Mesa last year, emphasize mixed-use development.
“Community plans appear to be open to a change in (commercial) use to residential use,” said Gary London, senior manager of London Moeder Advisors.
“It’s not just the state or the city, but there is an economic motivation to turn commercial property into housing,” he added.
He noted he was working on family-owned, legacy retail properties along some of the great boulevards of central San Diego, which are being handed over to a younger generation more willing to let go of the past – and potentially increase property income with housing.
For a long time, local governments sought out retail because sales tax returns exceeded income from other areas, including housing. The coronavirus pandemic has had a downward impact on retail operations and office buildings. It may take some more time to see how things eventually turn out.
But long before COVID-19, physical stores struggled and closed amid online shopping competition. And while no one predicts that the traditional office will become obsolete, the need may not be as great as it once was in the hope that more people will continue to work remotely.
It seems certain that efforts to turn these distressed properties into housing will grow, one way or another.
Don’t be surprised if state lawmakers take another hit in trying to get there faster.
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