What Happened to Housing in the 2018 Legislative Session

Last year’s legislative session was lauded as one of the most transformative for housing in decades. Fifteen bills were passed into law in 2017 aimed at easing the housing crunch. With momentum finally behind them, many legislators headed into the 2018 session with their sights aimed even higher. A flurry of bills were introduced into this year’s session, tackling the housing crisis from many angles.

SB 827, introduced by San Francisco Senator Scott Wiener garnered heavy media attention and heated debates between anti-displacement activists, NIMBYs, and pro-development activists. The hotly contested bill died in committee, but eclipsed much of the media coverage about other bills that sought to address our housing crisis. Many other bills that are consequential to our housing landscape were signed into law by Governor Brown this year.

Read on to learn more about the bills that will shape our housing landscape moving forward — and the bills that didn’t make it.

Assemblyman Chiu Made Big Moves

San Francisco Assemblymember David Chiu headed into his second term with an even bolder housing agenda. As chair of the Assembly Housing Committee, he took leadership on a number of the bills that were signed into law by the Governor.

AB 2923 — BART Transit Oriented Development

This bill gives BART the ability to greenlight development on properties they own within a half mile of a station, and to do so following BART guidelines, regardless of what local city zoning codes might say. The bill will affect an estimated 250 acres of land, most of which are BART-owned parking lots. There are high hopes that the bill will allow more projects like the 385-unit MacArthur Commons development on a former BART parking lot in the heart of North Oakland.

The goal of the bill was somewhat similar to that of SB 827, but with a narrower focus. While SB 827 would have streamlined zoning and approvals process for land near transit centers across the state on both publicly and privately owned land, AB 2923 was more targeted. The key to AB 2923’s success could have been just that; by focusing solely on the BART corridor and BART-owned lands, Assemb. Chiu was met with much less resistance. The vast majority of the state would be unaffected by the bill, allowing him to win support from legislators like Sen. Mike McGuire, who carried the bill in the Senate. Sen. McGuire, who represents Marin and Sonoma Counties, seems an unlikely ally on such a bill. Marin is typically very slow-growth and pro-local control, and its representatives strongly opposed transit-dense development bill SB 827. However, Sen. McGuire was able to move the bill through the Senate without any resistance from his constituents, as they would be unaffected due to the fact that BART doesn’t run to Marin and Sonoma Counties.

With the Passage of AB 2923, we may see new development cropping up on BART parking lots all over the Bay Area, especially in areas that might not be excited to approve transit-dense housing on their own.

AB 2162 — Streamlining for Supportive Housing

There’s a complex mix of factors that contribute to the cost of developing housing, which we’ve discussed on our blog before. Some of those factors are the costs that arise from obtaining the necessary permits and approvals, as well as the costs that come from delays when that approval process doesn’t go to plan. The approval process is usually wrapped up in a lot of red tape, and proposals very often wind up without approval at all. AB 2162 will help to bring those costs down by fast-tracking and streamlining the approvals process for 100%-affordable housing projects. One of the ways it does this is by establishing that supportive housing should be approved “by right” in multi-family residential and mixed-use zones, if the proposed project otherwise meets the zoning criteria. Under the new law, supportive housing for those experiencing homelessness or with acute mental health care needs can’t be denied just because it’s supportive housing. This means cities might have an easier time getting projects that are now funded due to the passage of Props 1, 2 and C approved.

AB 2343 — Tenant Notices and Unlawful Detainers

When a tenant gets an eviction notice, that notice gives them just three days to take action. That’s 72 hours to remedy the cause for the notice, whether that be paying a rent debt or remedying a lease violation. It can be difficult for tenants to access the resources necessary to deal with an eviction notice on such a short timeline — especially if that notice is given on a weekend, or even worse, over a three-day holiday weekend. It could mean that tenants don’t have proper access to banking services, legal assistance, or other resources that are closed over weekends and holidays. AB 2343 gives tenants a bit more time to resolve lease violations (5 days) and much more time to figure out how to pay an overdue rent balance (10 days.) Given the fact that over 60% of Americans don’t have an extra $1,000 in case of emergency, having a bit more time to figure out how to access funds like Oakland’s emergency rent assistance program to cover rent could be the difference between continued tenancy and homelessness for many residents.

AB 829 — Acknowledgement Letters

In Los Angeles, council members must submit a letter of acknowledgment when a development proposal is awaiting approval in their district. If the presiding councilmember withholds the letter, the permitting process can’t move forward without it. This allows councilmembers to single-handedly veto projects in their district without a hearing or any recourse. Per AB 829, if Los Angeles, or other cities with similar requirements, want to get state funding they’ll need to eliminate letters of acknowledgment completely.

AB 2413 — Tenancy Law Enforcement and Emergency Assistance

Many cities and counties have anti-nuisance ordinances that fine property owners when emergency services are called to an address too many times. Landlords don’t like being slapped with these fines when tenants call police or emergency assistance frequently; they usually opt to evict tenants rather than face continued fees. For tenants, this can mean they face a very serious dilemma — keep their housing or keep their safety. Discouraging residents from seeking emergency assistance can have fatal consequences, particularly for victims of domestic violence. The new law now prohibits tenants from being evicted for accessing emergency services, and allows tenants to use the law as a defense in eviction proceedings.

Density Bonus Bonanza

Four bills passed this year that changed the state’s density bonus law, which incentivizes developers to build more affordable and senior housing by increasing the density of the project, allowing them to build even more units:

• AB 2753 will help expedite the processing of applications for a density bonus.
• AB 2372 allows local officials to substitute the method by which the density bonus is determined. The typical formula looks at the number of units produced per acre, but the new law will now allow floor area to be a factor as well.
• Berkeley Senator Nancy Skinner’s bill SB 1227 passed, allowing affordable student housing to be eligible for the state’s housing bonus.
• The California Coastal Commission is a governing body with a lot of power over what happens to California’s coast, including superseding local law in coastal towns like San Diego, Santa Monica, Santa Cruz, and more. AB 2797 curtails some of that power by requiring the Coastal Commission adhere to the state’s density bonus law, where previously they were able to override it.

Other Bills of Note

SB 828, carried by Sen. Scott Wiener, made changes to the state’s Regional Housing Needs Assessment (RHNA) process. Under RHNA, regions are assigned targets to meet for the construction of new housing at various income levels. Many have criticized the way the state sets RHNA target numbers as highly politicized and allows regions to be under-assigned. This puts more pressure on other regions of the state to pick up the slack, for fear of worsening our crisis. SB 828 changes the way RHNA numbers are assigned, relying more on data like job market growth, vacancy rates, and the number of rent-burdened tenants (paying more than 50% of their income in rent). It doesn’t add any strong enforcement mechanisms to RHNA (punishment for cities that don’t meet their targets) but it’s a step in the right direction.

AB 1919 passed, extending protections from “price gouging” to those affected by the Napa and Sonoma County wildfires last year. The bill is an extension of SB 833, passed by Sen. McGuire last year, which caps rent increases at 10% after a state of emergency is declared. Sen. McGuire’s bill, however, only included existing buildings. AB 1919 extends those anti-gouging protections to new construction as well. We’ve written before about how anti-gouging policy could be a good way to stabilize renters more broadly, whether affected by a natural disaster like a wildfire or not. We explored anti-gouging as an alternative to a full repeal of Costa-Hawkins in our blog article with the Terner Center.

Ideas That Didn’t Get Enough Steam

While there were strides made in the legislature to deal with our housing and affordability crisis, there were plenty of bills introduced in the 2018 session that didn’t make it through the process. We may see revised and resurrected versions of these bills come the 2019 session or moving to the ballot in future election cycles.

SB 1182 and SB 1212 — Renter’s Tax Credit

Many Californians might not even realize we have a tax credit for renters, few are eligible, and for those that are, the return is only $60. While homeowners are eligible for many large tax breaks, renters get little support from the state. Sen. Glazer introduced SB 1182, which would have increased the Renter’s Tax Credit for the first time since 1979, from $60 for individuals to $120. Surprisingly, Sen. Anderson, a Republican, introduced SB 1212, which would have gone even further. His proposal would have increased the credit from $60 to $250 for individuals. Both bills were held in committee and failed to make it through the legislative process. Their failure was due in large part to resistance to passing a tax credit without a funding mechanism to support it. However, the failure of these bills may not be the end of the road in additional assistance for renters. Senator Kamala Harris is interested in providing relief to renters through a federal, rather than state, tax credit.

AB 1506 — Costa-Hawkins Rental Housing Act

Another bill with Assemb. Chiu’s name attached, AB 1506 was also co-sponsored by Assemblymembers Bloom and Bonta and sought to repeal the Costa-Hawkins Act. The Costa-Hawkins Act, passed in 1995, limits cities’ ability to enact some kinds of rent control, like rent control on single-family homes or newer construction. The bill died quickly in committee this February, but momentum around repealing Costa-Hawkins marched on toward the ballot. It made its way to voters as Proposition 10, which also failed to pass. Despite the inability to gain the momentum necessary to repeal rent control limitations in the legislature and at the ballot, advocates are doubling down on their efforts to protect renters in the coming legislative session. Assemb. Chiu says that “he and other lawmakers are discussing bills to help tenants for the legislative session that begins Jan. 7, including proposals to prevent steep rent increases during housing crises and to strengthen just-cause eviction laws.”

AB 2925 — Just Cause Eviction Protections for All California Tenants

This year, TechEquity supported a bill to require Just Cause in evictions. In much of California, tenants can be evicted without notice and landlords are not required to give any stated reason for the eviction. This leaves many Californians living in uncertainty, with no guarantee that they will have a stable home, even when they pay their rent on time and follow their lease. Assmb. Bonta introduced AB 2925 to require that landlords provide written notice and a stated reason for eviction to help prevent arbitrary and unfair evictions. The bill made it through committee and to the Assembly floor, where it failed to be passed to the opposite house, due to pressure from landlords and their lobby group, the Apartment Association.

What to Look Out For Next Year

We can expect many more bills to be introduced to the legislature to tackle the housing crisis in 2019. Sen. Scott Wiener is likely to come back with a revised version of his transit-dense housing bill, SB-827. This time, he says, he is “taking a very hard look at anti-displacement provisions”.

We’re likely to see even more bills that focus on streamlining zoning and permitting. Legislators seem to favor this approach to solving the housing crisis as it doesn’t require the state to spend funds and are generally supported by the development industry. We may also see more bills to strengthen tenant protections, especially as tenant advocates are organized and energized from their battle at the ballot over Prop 10.

As always, stay tuned here on our blog and join our newsletter for more updates about what to expect in the 2019 legislative session!

We’re uniting tech workers to create a more equitable economy. Join us!

We believe the tech industry, built on the internet — the most democratizing communications platform in human history — can and should contribute to broad-based economic growth that benefits everyone.