California Senate Bill 50 Proposed To Increase Housing Supply

California Senate Bill 50 Proposed To Increase Housing Supply

In December of 2018, California Senator and Democrat Scott Wiener from San Francisco proposed California Senate Bill 50, which is designed to increase housing supply surrounding public transit throughout California.  The bill faces opposition from numerous cities and organizations, including the Los Angeles City Council, for a variety of reasons.  On April 23, 2019, the Los Angeles Department of City Planning issued a report (linked here) that discusses SB 50’s potential impact on Los Angeles’s neighborhood development patterns, policies, zoning, and plans.  In this article, we summarize SB 50 and the findings of the recently released report.

What Is California Senate Bill 50?

In short, California Senate Bill 50 is a proposed plan to allow developers to build multi-story buildings within 1/2 miles of public transit.  The idea is that increasing density around public transit will increase housing supply, thereby reducing rent.  Under the proposal, city zoning restrictions will no longer block developers from building up to four stories within 1/2 mile, and up to five stories within 1/4 mile, of train stations.  It will provide further incentives if the building is in a “jobs rich” area.  It will also waive or relax parking requirements for qualifying buildings.  The bill will allow qualifying projects to benefit from statewide development standards, rather than local planning and zoning rules.  Any project with 11 or more units would be required to meet affordability requirements, while buildings with 10 or fewer units will not be required to meet those requirements.

Summary Of The Los Angeles Department Of City Planning Findings

One of the largest concerns raised by the Department of City Planning’s findings is that SB 50 would apply to approximately 43% of the developable area of Los Angeles.  This means that SB 50 would allow development of large buildings in areas that are otherwise largely restricted to single family home use.  The largest impact is expected to occur in low-density areas that are located within 1/2 mile of a rail station, or about 6% of single-family zoned parcels and 8% of R2 and RD zoned areas.  It is expected to move development away from commercial corridors and high-density zoned residential areas.

The report recognizes that California faces a severe housing crisis.  It further recognizes that this housing crisis is at least partially the result of inadequate zoning capacity for the necessary new homes that must be built, as well as a reduction in statewide home construction, including affordable housing.  It further notes that SB 50 could potentially address these issues by allowing for additional housing capacity resulting from reduced development standards.  However, it notes that any benefits “should be considered in light of the loss of long established, locally determined planning and zoning standards such as density, height, parking, and floor area.”

In sum, the report notes that SB 50 will likely result in increased housing and will potentially address the housing crisis in California, but at the significant expense of taking away local control over zoning and planning.

Other Concerns Raised By California Senate Bill 50

SB 50, like its predecessor California Senate Bill 827, faces significant opposition from numerous cities, locales, and organizations.  Most notably, earlier in April the Los Angeles City Council unanimously voted to oppose it.  Councilmembers argued it would encourage more “market rate” housing rather than affordable housing.  A primary concern is that developers will focus on luxury buildings of 10 or fewer units, in order to avoid the affordability requirements of buildings with 11 or more units.  In the meanwhile, the city has produced less than 1/4 of the low and very-low income housing needed to reach its target for 2021.

California Senate Bill 50 is a drastic measure proposed by the state to attempt to address local housing needs by reducing and eliminating zoning restrictions, thereby increasing housing supply.  The debate will likely continue about the best way to satisfy the currently insufficient supply of housing, particularly in the Los Angeles market.  At a minimum, SB 50 presents at least a step, or an attempted step, in the right direction.

For more information on how Esquire Real Estate Brokerage, Inc. can help you in the Los Angeles real estate market, feel free to give us a call at 213-973-9439 or send us an email at info@esquirereb.com.

Leave a Reply

Your email address will not be published. Required fields are marked *