Churches, faith institutions, and nonprofit colleges in California have a smoother path to build affordable housing on their land after the passage of a new state bill.
Under the Affordable Housing on Faith Lands Act (SB 4), the organizations will not have to go through an expensive and often difficult rezoning approval process to utilize their land for affordable housing. It rezones the property and ensures neither the California Environmental Quality Act nor local political processes can be misused to stop affordable housing projects, according to state Sen. Scott Wiener (D-San Francisco).
His legislation, dubbed the “Yes in God’s Back Yard” law, was among 56 housing bills signed Oct. 11 by Gov. Gavin Newsom to streamline housing production and protect tenants.
“SB 4 creates a powerful new tool that harnesses the mission of our religious institutions and colleges to address the home building needs of our state,” said Abram Diaz, policy director for the Non-Profit Housing Association of Northern California, in a statement.
A recent report from the University of California at Berkeley’s Terner Center for Housing Innovation found that there are roughly 171,000 acres of land throughout the state that would be eligible for affordable housing under the bill. One of the chief obstacles to affordable housing development is that affordable housing developers must compete against market-rate developers for land. SB 4 opens tens of thousands of acres that affordable housing developers will have exclusive access to.
According to Wiener’s office, any organization building this type of streamlined affordable housing must maintain the affordability of these homes for a minimum of 55 years for rental properties and 45 years for properties that can be owned. Additionally, density and height requirements are tied to what is deemed appropriate for affordable housing by state law.
Newsom signed two other housing bills by Wiener—SB 423, which extends the sunset of an earlier bill requiring local governments that are failing to meet state housing planning goals to streamline affordable housing projects, and the San Francisco Replacement Housing Act (SB 593).
“California desperately needs to ramp up housing production, and the governor’s action today helps put us on a path to achieve that goal,” Wiener said in a statement. “The era of saying no to housing is coming to an end. We’ve been planting seeds for years to get us to a brighter housing future, and today we’re continuing strongly down that path.”
SB 593 creates a tax increment financing structure to replace 5,800 affordable homes San Francisco lost during the 1950s-’70s era of redevelopment or “urban renewal.”
Though the local redevelopment agency was legally required to replace the affordable homes it destroyed, 5,842 units of low- and moderate-income housing were never replaced. In addition, the affordability restrictions for some of the replacement housing units that were constructed have expired or are in danger of expiring. These units may need additional assistance to ensure that the properties continue to provide affordable housing, according to Wiener.
SB 593 creates opportunities to replace the units that were demolished prior to 1976 as well as preserve affordability of the replacement housing built in the 1970s. Among other moves, the bill will:
- Create a limited funding source through the use of property tax revenues (former tax increment) to fulfill the replacement housing obligations using only the city and county of San Francisco’s share of property tax revenues that remain after all preexisting commitments are funded;
- Allow the successor agency to the redevelopment agency to bond against property tax revenues exclusively for the purpose of fulfilling the replacement housing obligations subject to the same strict standards and procedures for review and approval by the oversight board and the state Department of Finance as other bonds under dissolution law;
- Dedicate the revenues to the development of affordable housing within the city and county of San Francisco for households that earn up to 120% of the area median income; and
- Extend tax increment authority for affordable housing purposes while protecting school revenues from property taxes and not placing the state’s general fund at risk from a reduction in school funding.
Newsom also signed AB 1449 by Assemblymember David Alvarez (D-San Diego), which extends new California Environmental Quality Act exemptions to a range of 100% affordable housing projects that meet specific location requirements, labor standards, and environmental regulations.
The bills are important to affordable housing developers across the state.
“We commend Governor Newsom and our committed representatives in the California Legislature for their leadership in advancing solutions,” said Matthew O. Franklin, president and CEO of MidPen Housing. “With these new laws, the state will expedite thousands of affordable homes and create new jobs, in partnership with our local government partners.”
Although a good number of bills were signed, not all passed. AB 1085, which would have required the Department of Health Care Services to add housing support services as a Medi-Cal benefit, contingent on federal approval and federal financial participation, and SB 18, which would have created a tribal housing grant program, were vetoed.
