Redevelopment 2.0 and Key Pro-Housing AB’s

As California’s housing crisis continues to worsen, state lawmakers and politicians have been hard at work continually drafting new pro-housing legislation through land-use policy reform and new financing mechanisms aimed at creating new affordable housing production. Amid the crisis, the state celebrated some successes in 2018 with the passage of Proposition 1 and 2 and numerous affordable housing bond propositions that passed throughout many counties throughout the state. The proposition passages will definitely help, but more is needed to combat the states’ current housing crisis. Of all the new proposed assembly bill legislation in 2018, AB 10, AB 11 and SB 50 could have the most profound impact on new affordable housing production.

AB 10, authored by Assembly Member David Chiu (D – San Francisco) in December 2018 and co-authored by Senior Scott Weiner (D – San Francisco) will expand the state’s low-income housing tax credit (LIHTC) program by increasing the program from approximately $94 million (in 2018) to $500 million, of which $25 million will be allocated to farm workers housing. If passed, the bill would start in 2020 and the tax credits would leverage three federal dollars for every one state dollar, resulting in a $500 million investment. The additional tax credits plus traditional debt and construction financing will result a $2 billion annual investment for affordable housing in California.

AB 11 (or Community Redevelopment Law of 2019), authored by Assembly Member David Chiu (D- San Francisco) in December 2018 and co-authored by Senior Scott Weiner (D – San Francisco), would allow cities and counties to create agencies that use tax increment financing to fund affordable housing and infrastructure projects. This bill proposes a similar approach used by former redevelopment agencies that were dissolved in 2012 after the Great Recession of 2008-2010. AB 11 would require that at least 30% (vs 20% in the prior Redevelopment era) of all taxes allocated to be used “for the purposes of financing, improving, and preserving the community’s supply of low- and moderate-income housing.†AB 11 will attempt to create additional soft money funds to counter the nearly $1 billion annually lost for affordable housing production in the prior Redevelopment era.

SB 50, the “More HOMES (Housing, Opportunity, Mobility, Equity, and Stability) Act ,†authored by Senior Scott Weiner (D – San Francisco) proposed zoning reform that would increase housing density and maximum building height in restrictive low-density zoned areas near transit corridors. The bill is a redraft (or modeled) from SB 827 in 2018, which failed to pass after outcry from local governments throughout the state. SB 50 will provide developers with incentives if housing developments are located within either one-quarter or one-half mile from public transit. Developments within one-half mile of public transit would be eligible for waivers from height limits less than 45 feet and FAR limits of 2.5:1. Developments within one-quarter mile of public transit would be eligible for waivers from height limits less than 55 feet and FAR limits of 3.25:1. Developments may also waive parking requirements and would not allow for displacement of residents. For example, sites occupied by tenants within seven years preceding the date of application, including housing that has been demolished would be ineligible for the incentive/waivers, as would properties in which tenants have been evicted through the Ellis Act within the past 15 years. Finally, developments would be required to provide affordable housing at the same levels as under the State density bonus law.