This week in affordable housing news…:

State Update:

• SB 35 has become “the streamlining method of choice” among affordable housing developers since its passage five years ago, a newly released report by the UC Berkeley Terner Center for Housing Innovation confirms. Between 2018 and 2021, the law has led to more than 150 pending or approved housing projects—totaling more than 18,000 units—two-thirds of which are 100% affordable. Most of these projects are in the Bay Area or Los Angeles. “We see SB 35 working really well when it comes to producing affordable housing,” Ryan Finnigan, one of the report’s authors, told the Los Angeles Times. With the law set to expire at the end of 2025, CHC and a coalition of labor organizations and pro-housing advocates continue to push the Legislature to pass our sponsored bill, SB 423 (Wiener), to extend its provisions—and apply lessons learned from the last five years to strengthen the SB 35 process and ensure it produces even more affordable housings in the years ahead.

• CalMatters published a story this week on the unprecedented wave of housing bonds currently making their way to the 2024 ballot—including the $10 billion state bond introduced by Asm. Buffy Wicks, the $4.7 billion mental health measure touted by Governor Newsom, and a $20 billion regional bond that could be on the ballot in the Bay Area. The story also highlights rising concerns from advocates about whether voters will approve all of these measures—with debates ongoing in the Capitol over where the electorate’s tipping point might be next year. A $16 billion climate bond and $15 billion school facilities measure are also making their way through the Legislature, among several other high-cost proposals. “There is only so much capacity that the state has for debt,” CHC’s Ray Pearl told CalMatters. “And politically, for the governor and the Legislature, there’s only so much they are willing to take on.” The Newsom administration has reportedly set the borrowing limit for next year’s primary and general election ballots at $26 billion—a figure that is expected to shape the debate in August and September about which measures make the final cut.

ICYMI – Top news stories:

EDITORIAL: California has to rethink building homes in climate-threatened areas
Los Angeles Times
California has two competing crises. The state’s housing shortage has driven up prices and rents to unaffordable levels, and the only solution is to build tens of thousands more homes. But climate change is making it risky to build in parts of the state that have a high likelihood of wildfire, flooding, coastal erosion and sea level rise. So far the state hasn’t adopted comprehensive policies that spell out where or how development in those areas should be curtailed. This tension came to a head recently in the fight over SB 423, Sen. Scott Wiener’s effort to extend the hugely successful SB 35. With SB 35 sunsetting at the end of 2025, the new bill would extend the law to 2036 and remove the exemption for high fire-risk zones and urban parts of the Coastal Zone, roughly 18% of the state’s shoreline. Wiener has argued that the blanket exemption for the Coastal Zone is too broad and excludes whiter, wealthier coastal cities. The California Coastal Commission opposes SB 423, but is talking with Wiener’s office about amendments—including a compromise that would allow fast-tracking in the Coastal Zone except in areas vulnerable to three to five feet of sea level rise by 2100.

This L.A. developer aims to tear down homes to build apartments where the city doesn’t want them
Los Angeles Times
Up in arms over developer Akhilesh Jha’s proposal to replace a single-family home with a seven-story apartment complex, neighbors in the Harvard Heights community turned to the city for help. The Los Angeles Planning Commission obliged, ordering Jha to scale down the project. But Jha, a 49-year-old aerospace engineer turned real estate developer, refused. Instead, when he returned to the planning commission months later, Jha had added an eighth floor. Jha believed he had the law on his side, and after an hour-and-a-half hearing in February, the planning commission agreed. His 33-unit apartment complex was approved unanimously, and Jha hopes to break ground within a year. “I’m offended by it,” said Samantha Millman, the planning commission chair. “But I have no choice but to vote for it.”

Newsom says California’s anti-housing environmental law is ‘broken.’ So why won’t he fix it?
Los Angeles Times – Oped by Chris Elmendorf
In February, after yet another court decision stalling sorely needed housing development, Gov. Gavin Newsom said CEQA, California’s landmark environmental law, is “broken.” The law supposed to protect the environment by requiring governments to study and mitigate any harms of development before they approve it. But as Newsom noted, CEQA has been “weaponized” by “wealthy homeowners” (among others) to block housing—often in urban areas where people have the least environmental impact. To that end, in May, the governor unveiled an 11-bill infrastructure package to “assert a different paradigm.” No longer would we “screw it up” with “paralysis and process,” Newsom pledged; going forward, the state would commit itself to “results.” Newsom’s bold rhetoric implied big reforms in the offing. But the package included only two incremental CEQA reforms, neither directed at housing.