Could New State Laws Mean New Housing in Bay Area Malls?

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In an effort to alleviate California’s mounting housing shortage, the state legislature this week passed two bills that will make it easier to convert unused malls, office buildings and parking lots into new apartments and townhouses.

Proponents are hailing the reforms – which limit local governments’ ability to block such multi-family housing projects – as a “game changer” and say the bills could help create hundreds of thousands of new market-ready and affordable housing across the Bay Area.

“We’re seeing a lot of places with half-stocked malls, and that really doesn’t meet the needs of people in our communities,” said Rep. Buffy Wicks, an Oakland Democrat who authored one of the bills. “What we need to grapple with is reimagining how cities will function in the modern era?”

The two bills – Assembly Bill 2011 and Senate Bill 6 – come after months of negotiations between housing advocates, affordable housing developers and the state’s powerful building unions. The measures are expected to be signed into law by Gov. Gavin Newsom, who has made boosting housing production a top priority as rents and home prices have skyrocketed in recent years.

AB 2011 would streamline the permitting process for 100% affordable projects on most lots currently designated for retail, office or parking and limit the power of local jurisdictions to oppose these developments. The bill would also speed up approvals for projects that have at least 15% low-income units along busy trade corridors. In particular, it would exempt developments from the often lengthy environmental review process required by the California Environmental Quality Act, which has long held developers accountable for stopping or terminating projects.

SB 6, meanwhile, would bypass rezoning requirements for new multi-family homes to commercial properties, regardless of affordability. But unlike AB 2011, it would not force cities and counties to expedite approvals for projects that meet set construction and design standards.

The bills were presented as a compromise on Monday after lawmakers failed to reach an agreement on how the two measures could be combined, over objections from some builders’ groups who have thwarted state housing legislation in the past. The sticking point was whether developers benefiting from a new law should be required to hire a certain number of skilled and trained workers, usually union members.

In the end, lawmakers agreed that only SB 6 would direct developers to seek qualified workers, and AB 2011 would require them to provide workers with wages, healthcare and other union-level benefits.

Housing advocates say the bills could free up thousands of acres of limited land for new Bay Area housing while reducing the region’s astronomical development costs by simplifying the sometimes year-long local permitting and claiming process.

Louis Mirante, vice president of public policy at the Bay Area Council, estimated the legislation could eventually help create 500,000 to 1 million additional units in the area as the Bay Area works to meet its upcoming state housing goal of more than 441,000 new Apartments to be reached in 2023 and 2031.

Across the state, according to a report by data analysis firm Urban Footprint, AB 2011 alone could boost 1.6 to 2.4 million homes.

In the Bay Area, Mirante expects developers will use the bills to plan along corridors such as El Camino Real in the South Bay, Shattuck Avenue in Berkeley and other “key business areas where more development is already being seen.” to build.

To further spur housing construction, he pointed to another pending state bill called AB 2097, which would effectively eliminate parking requirements for new housing projects near the transit. “That could reduce the cost of overnight construction,” he said.

Other housing bills coming onto the governor’s desk include AB 2221, which would facilitate the construction of backyard single-family homes (also known as annexe units), as well as SB 886, which would expedite the environmental assessment process for student housing.

As lawmakers near the end of their 2021-22 legislative session, they have also submitted a number of other high-profile proposals to Newsom, including a bill to improve wages and working conditions for fast-food workers, online privacy legislation for children, and a proposal to make kindergarten compulsory. Lawmakers have also passed a series of bills that would expand access to abortion as the state moves to welcoming women seeking the procedure from states that have banned it. Earlier this month, Newsom vetoed a controversial bill to legalize safe injection sites for drug users in some cities.

Neighborhood groups have severely pushed back housing bills over fears that the state will rip land-use decisions away from cities and counties. One group, Livable California, described AB 2011 as “massive government adoption of flexibility required by local jurisdictions to place housing where it best meets the needs of the community.”

For some affordable housing developers, the relaxation of local scrutiny is a big reason they have pushed for the law to be passed.

Larry Florin, president of Burbank Housing in Santa Rosa, said reducing environmental assessments and public planning hearings — where neighbors sometimes pressure local officials to refuse new housing — could spur developers to include affordable units in their projects.

Florin is optimistic the bills could lead to redevelopment of the aging Santa Rosa Plaza mall.

“The process was daunting for developers who wanted to get involved,” Florin said. “And now if you see a clear way forward, I think you’re going to get a lot of interest from the private and non-profit sectors for repurposing these buildings.”

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