Infographic - 3 housing policies affecting multifamily - NAI Northern California

Three New Housing Bills to Impact Multifamily Real Estate Market

The multifamily commercial real estate market is likely to be impacted by three housing bills currently making their way through the California legislature. Senate Bills 330 and 13, and Assembly Bill 1485, each seek to relieve the state’s housing crisis by allowing additional construction and streamlining the approval process.

Sponsored by Senator Nancy Skinner (D-Berkeley), SB 330 will limit how strict cities can make their zoning. According to Bisnow, the proposal “prevents governments from downzoning until 2025; setting parking minimums or imposing housing moratoriums; or enacting other local measures that have made housing development nearly impossible in space-strapped areas.” It also “limits the number of public hearings on a zoning-compliant housing development proposal to five, and the length of time its permits can be considered.” Ideally this will make it easier and faster (and therefore cheaper) to build multifamily housing.

Assembly Bill 1485 aims to expand on 2018’s SB 35, a bill that was supposed to remove “discretionary review and other processes for mixed-income, completely zoning-compliant housing development proposals in cities not meeting their state-determined housing needs.” But due to strict qualification requirements, only three projects have been able to take advantage of the original law’s streamlining effort. The new law clears the pathway to more projects by loosening restrictions. Under AB 1485, 20% of new development units would be reserved for incomes of less that 120% of the area’s median income, a reduction from the previous requirement of 50%.

Finally, SB 13, sponsored by Senator Bob Wieckowski (D-Fremont), is designed to encourage the construction of accessory dwelling units (ADUs) by removing or decreasing fees. In addition, it “allows for automatic approval of an ADU permit application if a local agency has not acted upon the application in 60 days” and “removes the requirement that the owner of an ADU live in the main home while renting out the ADU, meaning both the main dwelling and accessory unit can be rented.” While this will not directly apply to the multifamily industry, the additional availability of ADU rental units may soften the rental housing market.

If they make it through the committee and amendment processes, each of these three bills will be voted on in early September.

Source: Bisnow