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Blueprint for More Housing Legislation Heads to Senate Environmental Quality Committee for Final Policy Hearing

April 14, 2017
As hundreds of city officials gather at the Sacramento Convention Center next Wednesday for Legislative Action Day, SB 540 (Roth), the League-sponsored Workforce Housing Opportunity Zone bill, will be heard in the Senate Environmental Quality Committee. 
The bill passed out of the Senate Transportation and Housing and Governance and Finance committees in March with bipartisan support. Triple referred, the April 19 hearing will be the third and final policy hearing before the bill can go to the full Senate for action. 

SB 540 Creates Blueprint for More Housing Construction
Addressing the affordable housing crisis is one of the League’s top strategic goals for a second year in a row with cities on the front lines of this crisis. There has been a robust discussion on the need for more housing and finger pointing on why development is not keeping pace with demand. There is no one single California housing market, but many markets with various forces at play. It is a complex issue that reflects California’s economy and the realities of the cost of development.
Cities are not housing developers and do not build homes, but cities play a critical role through the permitting and review process that must occur before a single foundation can be laid. Delays and roadblocks in these processes have in some areas made development more challenging. To that end, the League is working with Sen. Richard Roth (D-Riverside) on his SB 540 to create a path for and streamline housing construction.
SB 540 provides an enhanced up-front planning process for local governments that reduces delays and uncertainty when proposed projects are consistent with those plans. Ensuring local planning requirements and environmental mitigation measures are identified early would streamline the approval process to facilitate more housing construction.
Under SB 540:
  • Cities and counties could identify priority housing areas within a community where enhanced planning, necessary environmental reviews and public engagement would occur at the front end.
  • By focusing on workforce and affordable housing in areas close to jobs and transit, the additional streamlined process would encourage developers to propose projects that address affordable housing needs and climate protection goals.
  • In order to be eligible:
    • 30 percent of units within the zone must be sold or rented to moderate income households;
    • 15 percent must be sold or rented to lower income households;
    • 5 percent must be sold or rented to very low income households;
    • Market rate projects must contain 10 percent affordable unit; and
    • Funding to support the up-front planning would come from a revolving state loan fund available to local governments. Loans would be repaid when development occurs.
Senate Environmental Quality Committee to Determine Path Forward of Legislative Approach on Housing
The Senate Environmental Quality Committee has a pivotal decision to make with SB 540. The Legislature has identified housing as one of its top priorities and approximately 170 bills this year are housing-related. The Legislature has made considerable progress on identifying the problem and all of the factors that contribute to why California does not have enough affordable housing stock, including the state and local review processes that are central to every project.
However the Legislature faces a fork in the road when it comes to its priorities and what policy direction is best for the state’s overall goals on a number of fronts including how to spur developers to invest and build.
Sen. Roth and the League have developed SB 540 as a real and responsible solution to California’s housing development problem. It is a solution that protects environmental review, public engagement and streamlines the development process and creates greater certainty for developers considering where to build and how much.
SB 540 makes a modest but important adjustment to CEQA, determined by the local government, for a limited amount of time to advance the goal of creating more housing supply at affordable prices for California’s residents. The Legislature wants cities to help address the housing crisis and spur development, the Senate Environmental Quality Committee on April 19 will have to decide if streamlining housing approvals is a priority. The permitting process is one of the hold ups in development and under SB 540, in these Workforce Housing Opportunity Zones, cities will not be able to deny permits for five years if the project is consistent with the environmental and mitigation measures already identified.
This bill is part of the solution and shows what the state and local governments can do together to help end California’s affordable housing crisis.
Next Steps
The Senate Environmental Quality Committee needs to hear from cities directly about why SB 540 is a responsible solution that will help create more affordable housing.
If your city has not submitted a support letter on SB 540, now is the time to do so. 
The League’s support letters and sample letter cities can use is available on the League’s website at www.cacities.org/billsearch by plugging SB 540 into the search function. 

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