California lawmakers killed one of the biggest housing bills in the country

Reporting from Sacramento —  A robust effort to attack California’s housing shortage was rejected Tuesday by a state legislative panel at the Capitol, felled in part by opponents who argued that it treated small cities and large ones like San Francisco the same way.

The defeat for Senate Bill 827 came in its first legislative hearing, a surprisingly early end for a bill that had attracted national attention. Sen. Scott Wiener (D-San Francisco) was attempting to tackle two of California’s most pressing issues: the rising cost of housing and the need for development that is consistent with the state’s ambitious goals to reduce greenhouse gas emissions.

Wiener’s colleagues on the Senate Transportation and Housing Committee contended the bill would be too blunt.

“I do think we have a housing crisis in the state,” said Sen. Mike McGuire (D-Healdsburg). “But we also have to get it right.”

SB 827 would have allowed for the construction of buildings four to five stories tall within half a mile of rail stops in areas, such as parcels zoned for single-family homes, where they are currently not allowed. Additionally, the bill would have eliminated parking minimums in those locations as well as around bus stops with frequent service throughout the day.

By allowing for significant increases in development near transit, Wiener said the bill would help the state reduce a shortage of homes he has estimated at 4 million. It would do so, he argued, in a way that would reduce the need for driving, something state regulators say is essential for California to meet its goal of reducing carbon emissions to 40% below 1990 levels by 2030.

“The status quo isn’t working and we need to do things differently,” Wiener said. “We need an enormous amount of new housing at all income levels.”

The bill could have had large effects in large coastal areas across the state that are ringed by mass transit. An earlier version would have affected 190,000 single-family parcels in Los Angeles — about half the total in in the city. Almost all of San Francisco would have been similarly impacted.

The measure was one of this year’s highest-profile legislative attempts to address California’s housing affordability problem, an issue that has only grown since the mortgage crisis a decade ago. Nearly 2 million households in the state spend more than half their income on rent, and California has the nation’s highest poverty rate once housing costs are factored in. The state’s median home value of $535,100 is more than 2½ times the national figure.

Gov. Jerry Brown and state lawmakers hadn’t made housing a priority until last year when they passed 15 bills designed to subsidize the construction of more low-income housing and make it easier for developers to build. But lawmakers have admitted last year’s package won’t make much of a dent in the state’s deep shortage of homes.

Wiener, the author of one of the highest-profile measures in last year’s housing package, wanted to take a bigger swing.

The broad changes anticipated by SB 827 attracted support by national leaders against housing segregation and substantial opposition from interest groups across the political spectrum. Elected officials in Los Angeles and San Francisco wrote resolutions against the bill, warning about the loss of local power to shape neighborhoods. The powerful state construction workers’ union and numerous groups representing low-income tenants and affordable housing developers worried about labor standards and potential gentrification and displacement that might arise from large-scale new building.

In response to all of those concerns, Wiener narrowed the legislation. He reduced allowable height increases to five stories from eight. He also took away the height increases planned near frequently traveled bus routes. And he added measures, such as mandating that developers set aside a portion of their projects for low-income residents, in an effort to allow people of varying incomes to benefit from the new housing.

Those efforts weren’t enough to sway his colleagues, particularly fellow Democrats. Democratic lawmakers from Riverside, Marin, Napa and coastal Los Angeles were worried about the loss of local power to regulate development. They advocated for more low-income housing and fretted over historic preservation. The bill ended up earning four of the seven committee votes it needed to move forward — two Democrats and two Republicans.

“We have to make the right planning decisions when we make these decisions,” said Sen. Jim Beall (D-San Jose), the committee chairman, one of a half-dozen Democrats voting no.

Wiener vowed to bring the bill back in the future, saying the state’s housing problems are only going to get worse in the meantime.

“This issue isn’t going away,” he said. “This bill isn’t going away.”

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