By Ben Christopher

Calmatters

https://calmatters.org/housing/2023/09/affordable-housing-california/

You may not have seen the headlines (there weren’t any). You may have missed the raucous debate (there wasn’t much of one). But with the end of the legislative session last week, California is now on the verge of laying down a welcome mat for most major affordable housing projects across the state.

That’s not because of a single bill, but a patchwork of current and former legislation that, taken together, “basically covers any flavor of affordable housing you could possibly want to build,” said Linda Mandolini, president of Eden Housing, an affordable housing development nonprofit.

Homes designated for low-income occupants, like all housing projects, face a gauntlet of potential challenges and hold-ups that add to the already exorbitant cost of affordable housing in California. Those hurdles include lawsuits filed under the wide-ranging California Environmental Quality Act, extensive public hearings and other forms of opposition from local government.

Now, affordable housing projects — in most places and most of the time — may soon be exempt from all that, fitted out in a suit of procedural armor made up of some half a dozen bills and laws.

A bill now sitting on the governor’s desk would cover up one of the last chinks in that armor. Assembly Bill 1449, authored by two Democratic Assemblymembers, David Alvarez of San Diego and Buffy Wicks of Oakland, would exempt certain affordable apartment developments from review under CEQA. To qualify, projects would have to be located in dense urban areas, set aside each unit for someone earning less than 80% the area median income and abide by stricter labor standards, among other requirements.

Though modest and technical-sounding, that’s unusually broad for new construction in California.

“I do think it’s gonna be very consequential, but it’s kind of flown under the radar,” Alvarez said. His explanation why: “The politics of where Californians are, and certainly where the Legislature is — we want to see results. We want to see housing being produced.”

Taken together with a handful of other bills and current laws, said Mark Stivers, a lobbyist with the California Housing Partnership, which co-sponsored AB 1449, the new legislation “effectively make it possible for affordable housing providers to develop nearly all viable sites in California by-right and exempt from CEQA review.”

Speeding up approval for these projects comes with a trade-off. Environmental justice organizations, labor unions and various opponents of new development see CEQA as a vital tool to weigh in on what gets built, where and under what terms.

“Our communities rely heavily on CEQA to be able to get more information about proposed developments that might be contributing to further pollution,” said Grecia Orozco, a staff attorney with the nonprofit Center on Race, Poverty and the Environment.

Local activists also often flood the public meetings of city councils and planning boards to pressure elected officials to block unpopular projects or extract concessions from developers.

Whether AB 1449 and a handful of similar bills become law is now up to Gov. Gavin Newsom. Supporters have reason to be optimistic. The Newsom administration is pushing local governments to approve an unprecedented 2.5 million additional homes by 2030, he called the CEQA process “broken” and in the spring he rolled out a package of bills aimed at speeding up environmental challenges to projects — though housing was not included.

He has until Oct. 14 to sign or veto the bills now sitting on his desk.

A patchwork of carve-outs

The Alvarez-Wicks bill isn’t the first legislative effort to grease the skids for new affordable housing.

Two others, both authored by San Francisco Democratic Sen. Scott Wiener, would force local governments to automatically approve apartment buildings in housing-strapped parts of the state and most affordable housing projects on the properties of houses of worship and nonprofit colleges, so long as they comply with a list of zoning, affordability and labor requirements.

A third piece of legislation by San Jose Democratic Sen. Dave Cortese exempts the decision by local governments to fund affordable housing projects from environmental challenges, too. Newsom already signed it.

Still awaiting the governor’s pen are a handful of bills that make it more difficult to stall housing projects through environmental lawsuits in general. That includes a bill by Sen. Nancy Skinner, a Berkeley Democrat, that would make it easier for courts to toss out environmental challenges they deem “frivolous” or “solely intended to cause unnecessary delay.” Another by Assemblymember Phil Ting, a San Francisco Democrat, would give local officials a deadline by which to approve or deny a project’s environmental review.

The Ting proposal was fiercely opposed by many environmental activists and the State Building and Construction Trades Council, an umbrella group that represents many unionized construction workers. The bill would also make it more difficult for courts to award legal fees to groups that sue to block projects through CEQA.

J.P. Rose, a staff attorney with the Center for Biological Diversity, which regularly brings such suits, called that provision “the largest weakening of CEQA in recent history.”

The fact that this long list of bills passed the Legislature — some by healthy margins — amounts to a notable political shift, said Christopher Elmendorf, a law professor at UC Davis who advised Ting on the bill.

“I think it illustrates that a sea change is underfoot in how people are starting to think about these environmental review laws,” he said, though he noted that the shift in California is still modest compared to those underway in other states.

Earlier this year, the Washington legislature nearly unanimously passed a law to exempt virtually all new urban housing from that state’s environmental protection law.

The grand bargain continued

Many of the California bills build on a law passed last year that streamlines affordable housing construction along commercial corridors.

In cobbling together the law, its author, Wicks, struck a compromise: In exempting certain housing projects from environmental challenge and other local hurdles, developers would pay workers a higher minimum wage, provide them with health care benefits and abide by other stricter labor standards. That trade was the key to winning the support of the state carpenters’ union and breaking up a legislative logjam that had stymied housing production bills for years.

It also provided a template for Wiener’s two streamlining bills this year, along with the Alvarez-Wicks CEQA exemption proposal.

“That really laid the foundation for those of us who did work in the housing space this year,” said Alvarez.

Not every pro-housing advocate or CEQA critic is so content with the bargain.

“A lot of these bills help a little,” said Jennifer Hernandez, a land use attorney at the law firm Holland & Knight, who has catalogued CEQA challenges to housing projects for years. But she notes that swapping out the threat of environmental litigation with higher payroll expenses just replaces one cost with another.

In practice, she said, these exemptions are only likely to clear the way for substantial new housing construction in higher cost areas where developers can make up the difference by charging higher rents to non-subsidized residents. “You really need premium rentals to pay for those higher labor standards,” she said.

But for many affordable housing developers, it’s still a trade worth making.

“You’ve got really strong laws, clear exemptions, and an attorney general who’s willing to step up and say you got to build it,” said Mandolini with Eden Housing, who has been working on housing in the state for more than two decades. “This is the best it has been in California. … If this had all existed 20 years ago, we might have built a lot more housing a lot faster.”