Bay Area Council Blog: Housing and Sustainable Development Archive

felipe calderon

Council Urges Governor’s Signature on Key Bills

It ain’t over until Gov. Brown signs, but the Bay Area Council this week was still cheering one of its most successful legislative campaigns in recent memory. Three bills the Council sponsored and a number of others that were a high priority for us have all cleared the legislature and now await the Governor’s final decision. Housing, which was the Council’s major focus heading into this year’s legislative session, was also a big winner. Two bills the Council sponsored—SB 1227 (Skinner) and SB 828 (Wiener)—will expand affordable student housing and increase accountability on cities to meet their housing obligations, respectively. A third bill the Council strongly supported (AB 2923, Chiu and Grayson) will allow BART to develop up to an estimated 20,000 units of housing on land it owns or controls near its rail stations.

“It’s starting to sink in that California has a devastating housing crisis,” said Jim Wunderman, President and CEO of the Bay Area Council. “We applaud the legislature for approving these bills and we strongly encourage Gov. Brown to sign them. While this represents a good step forward in addressing a problem that is hurting millions of Californians and threatening our economy, we really need a big leap forward to remove the myriad regulatory and other barriers that are a huge obstacle to building the millions of new housing units we need. We’re not done, yet.”

The Council hailed the passage of AB 2596 (Cooley), a bill the Council co-sponsored with the Greater Sacramento Economic Council that authorizes the creation of a statewide economic development strategy. It would help improve the state’s economic competitiveness, bolster California’s resilience to an economic downturn and expand economic opportunity.

Construction_tariffs

Key Council-Backed Housing Legislation Advances

Legislation (SB 1227, Skinner) the Bay Area Council sponsored to address a critical statewide shortage of affordable student housing is headed to Governor Jerry Brown’s desk for his signature, along with another bill (AB 2923, Chiu and Grayson) the Council supported that could produce an estimated 20,000 units of new housing ideally situated near the BART mass transit system. The bills were among a handful the Council either sponsored or supported this year to address California’s historic housing shortage and affordability crisis. Another important housing bill (SB 828) by Sen. Scott Wiener that the Council co-sponsored also appeared poised for the Governor’s signature following an Assembly vote today that sends it to the Senate for concurrence.

“It’s starting to sink in that California has a devastating housing crisis,” said Jim Wunderman, President and CEO of the Bay Area Council. “We applaud the legislature for approving these bills and we strongly encourage Gov. Brown to sign them. While this represents a good step forward in addressing a problem that is hurting millions of Californians and threatening our economy, we really need a big leap forward to remove the myriad regulatory and other barriers that are a huge obstacle to building the millions of new housing units we need. We’re not done, yet.”

SB 1227 authored by Sen. Nancy Skinner allows housing built for students to receive a 35 percent density bonus as long as 100 percent of the units are dedicated to students, a minimum 20 percent of the units are reserved for very low-income students, and students experiencing homelessness get priority. The legislation is aimed at bringing relief for the estimated 800,000 college students statewide that recent studies have found are either homeless or housing insecure.

“College students are increasingly priced out of California’s extraordinary housing prices, threatening the Golden Goose of our economy,” said Matt Regan, Senior Vice President in charge of housing policy for the Bay Area Council. “If the world’s most promising students can’t afford to study here, they’ll go someplace else. This bill gives colleges and universities new tools to build affordable off-campus housing. We want than Sen. Skinner for her leadership in addressing our housing crisis.”

“SB 1227 will encourage the construction of more housing and more affordable housing for college students up and down the state,” said Senator Skinner. “Students deserve to focus on learning instead of worrying about whether they have a place to live.”

The Council also hailed the passage of AB 2923 by Assemblymember David Chiu (San Francisco) that would require the elected BART Board of Directors to establish guidelines for transit-oriented development for BART-owned land at or around BART stations. Cities would then update their local zoning to be consistent with these standards while retaining control over community design standards and final permitting authority. It’s estimated that BART-owned land could support as much as 20,000 new housing units. The Council made passing AB 2923 a major priority during this legislative session.

“This bill kills two birds with one stone, producing badly needed housing near transit that encourages commuters to leave their cars behind,” said Wunderman.

With the legislative session coming to a close, the Council was still working to win passage of SB 828 (Wiener), which would reform the state’s housing allocation system and hold cities more accountable for meeting their local housing obligations. Another bill (SB 831, Wieckowski) the Council sponsored this year to promote construction of accessory dwelling units, also known as granny or in-law units, previously fell short of the votes needed for passage.

The Council on Tuesday also cheered the passage of AB 2596 (Cooley). The bill, which the Council co-sponsored with the Greater Sacramento Economic Council, would authorize the creation of a statewide economic development strategy. It would help improve the state’s economic competitiveness, bolster California’s resilience to an economic downturn and expand economic opportunity.

# # #

About the Bay Area Council

The Bay Area Council is a business-sponsored, public-policy advocacy organization for the nine-county Bay Area. The Council proactively advocates for a strong economy, a vital business environment, and a better quality of life for everyone who lives here. Founded in 1945, the Bay Area Council is widely respected by elected officials, policy makers and other civic leaders as the voice of Bay Area business. Today, more than 300 of the largest employers in the region support the Bay Area Council and offer their CEO or top executive as a member. Our members employ more than 4.43 million workers and have revenues of $1.94 trillion, worldwide. Learn more at www.bayareacouncil.org.

BART housing

Council-Backed BART Housing Bill Clears Senate

Legislation the Bay Area Council is supporting that would usher in tens of thousands of new housing units near BART stations passed the Senate this week and appears headed for approval in the Assembly. Authored by Assembly members David Chiu (San Francisco) and Tim Grayson (Concord), the bill is a high priority for the Council, which is focused on expanding new housing near mass transit to provide commuters and others with an alternative to steering their automobiles onto the region’s already congested roads and highways. The bill, which San Francisco BART Director Nick Josefowitz has championed, now heads to the Assembly, where it is expected to get quick approval before heading to Gov. Jerry Brown for his signature.

Specifically, the bill would require the elected BART Board of Directors to establish guidelines for transit-oriented development for BART-owned land at or around BART stations. Cities would then update their local zoning to be consistent with these standards while retaining control over community design standards and final permitting authority. Meanwhile, the Assembly on Monday (Aug. 27) is scheduled to vote on legislation (SB 1227-Skinner) the Council is sponsoring to expand student housing.

prop10

New Report: Expanding Rent Control Hurts Local Coffers

Expanding rent control will chill investment in new and existing housing and reduce local tax revenues by tens of millions of dollars annually, according to a new report by the state Legislative Analyst’s Office. The report adds to an already substantial body of research that has conclusively found rent control has a negative impact on the housing market. The LAO specifically focused on Proposition 10, a statewide ballot measure the Bay Area Council strongly opposes that would repeal a decades-old law restricting rent control. A recent report by the Bay Area Council Economic Institute found that expanding rent control in Alameda County would reduce housing affordability for more than 10,300 households. To engage in the Council’s housing policy work, please contact Senior Vice President Matt Regan.

HousingSummit1

As Housing Crisis Grows, Council Convenes Top Leaders to Identify Solutions

The Bay Area Council Housing Committee on Wednesday (Aug. 8) convened a powerhouse group of elected, labor, government and industry leaders at our offices near the state capitol to explore ways for partnering to move the needle on housing affordability. The group included Senators Nancy Skinner and Scott Wiener, Assemblymember David Chiu, State Building and Construction Trades Council President Robbie Hunter, California Building Industry Association President and CEO Dan Dunmoyer, California Apartment Association Senior Vice President Debra Carlton, and League of California Cities Assistant Legislative Director Jason Rhine.

The meeting represented an important step in finding common ground among different interests on the reasons for the state’s historic housing crisis and possible solutions. There was much agreement about various ways to incentivize and encourage more housing and how to move forward. The discussion covered a range of topics, including rent control, NIMBYism, prevailing wage, redevelopment and the megaregion. Leaders also focused on what the business community can do to support housing, sticks and carrots to incentivize housing production, and creative solutions to increase density in existing neighborhoods.

The urgency of the housing crisis was highlighted in a survey released by the California Association of Realtors’ (CAR) that found housing affordability in the Bay Area is the worst in 10 years. Only 18 percent of Bay Area households are able to purchase a median-priced, single-family home, according to the CAR survey, down from 23 percent last quarter. When broken down by county, the qualifying income for housing affordability in San Francisco and San Mateo spike to $344,440 and $349,740 respectively, lowering the affordability index to 14 percent in those counties. Read more on the findings in CAR’s press release>>

The Housing Committee will meet next on October 3 to identify legislation and policies to pursue in 2019. To engage in the Council’s housing policy work, please contact Senior Vice President Matt Regan.

Construction_tariffs

New Tariffs to Escalate Construction Costs Impacting Bay Area’s Housing Production and Prices

Tariffs of 20% the Trump administration imposed last year on imports of Canadian softwood lumber, and more recent tariffs of 15% and 10% on steel and aluminum imports, are starting to impact the local economy – including construction and housing. Beyond land cost, the region’s high housing costs are primarily driven by a lack of inventory caused by resistance to development and fees imposed by local governments. The cost of construction materials can now be added as another obstacle to meeting the region’s housing goals – not the primary one, but an issue that’s additive and is likely to be significant.

Lumber accounts for the largest material cost of building homes. This may push builders to focus more on high-end homes where buyers can absorb the increased costs, instead of the low and middle income housing the region needs most. Higher steel prices are also starting to impact commercial high-rise construction. The marginal cost of materials, particularly when increases are double digit, can stall or stop a project. Some towers are being reduced in scale in order to lower costs, reducing the number of units produced. Residential projects have also been stopped or stalled as developers recalculate the higher costs and how design around them. The potential impact of tariffs is likely to grow with time, as more products (tools, fixtures, appliances) used in the building process or incorporated into new structures are added to the list. To engage in the Council’s housing advocacy work, please contact Senior Vice President of Policy Matt Regan.

 

 

MR_KTVU

Bay Area Cities Approve, Deny New Taxes on Business

A number of cities across the Bay Area have been pursuing initiatives to increase taxes on businesses with stated goals of generating revenue amid mounting housing affordability, transportation, and homelessness crises. This week, the City Councils of Mountain View and East Palo Alto passed measures going on November 2018 ballots to place a head tax and parcel tax, respectively, on businesses meeting certain parameters. Meanwhile, San Francisco and Cupertino withdrew their measures to increase business taxes following collaboration with affected companies.  In San Francisco, Supervisor Aaron Peskin replaced his ballot measure to tax gross receipts of ride-hailing and autonomous vehicle companies with a per-ride fee that will be introduced through state legislation. Cupertino agreed to delay consideration of a head tax measure until 2020 after more thorough planning is completed.

The Bay Area Council shares the concerns of these cities to find solutions to our region’s problems. However, we are concerned that in an attempt to be seen as taking action on a timely issue, cities are increasingly turning to taxing businesses without sufficient analysis or stakeholder engagement. Without a thoughtful process, cities risk reducing employment and wage growth, affecting employees and constraining the region’s economic success. The Bay Area’s housing and transportation problems are regional in nature and a myriad of heavy-handed taxes on businesses across multiple cities discourages the potential for a coordinated, regional strategy needed to solve these major challenges. The Bay Area Council has written letters and testified at numerous City Council meetings on these issues, and has offered to partner with City Councilmembers and their staff to assist with their analysis. We are encouraged by the actions of San Francisco and Cupertino to work with affected companies and take the time to analyze the impact of the proposed taxes before sending measures to voters for approval.

0727ballot

November Ballot Positions Announced

The Bay Area Council Executive Committee has adopted positions on a range of state and local ballot measures that voters will decide in November.

Support

Proposition 1: Authorizes $4 billion in bonds for affordable housing programs and veterans’ home loans.

Proposition 2: Authorizes state to use revenue from Proposition 63 (2004) for $2 billion in bonds for homelessness prevention housing.

Proposition 3: Authorizes $8.9 billion in bonds for water-related infrastructure and environmental projects.

Proposition 4: Authorizes $1.5 billion in bonds for children’s hospitals.

Proposition 5: Amends Proposition 13 to allow homeowners 55 and older to transfer their property tax assessments from their current home to a new home anywhere in California.

Proposition 11: Allow ambulance providers to require workers to remain on-call during breaks paid.

Oakland Children’s Initiative: Proposed measure would support early childhood education programs and services through $198 annual parcel tax.

San Mateo County transportation: Funds wide range of traffic relief and transportation improvement projects over 30 years with ½-cent sales tax increase.

Marin County transportation: Extends existing voter-approved ½-cent sales tax to fund wide range of traffic relief and transportation improvement projects.

Oppose

Proposition 6: Repeals 2017 fuel tax and vehicle fee increases (SB 1) to fund road, bridge and highway repairs and requires public vote on future increases.

Proposition 10: Repeals the Costa-Hawkins Rental Housing Act and allows local governments to enact rent control.

granny

Napa Moves Proactively to Ease Onerous Granny Unit Fees

Reducing and eliminating onerous local fees that discourage homeowners from building accessory dwelling units (ADUs), aka granny units, is among the Bay Area Council’s top priorities in our work to expand this important source of affordable housing. Such fees can add tens of thousands of dollars and more to the cost of ADUs. So we were thrilled this week to learn that the Napa City Council unanimously approved an ordinance to exempt accessory dwelling units (ADUs) of less than 500 square feet from the city’s housing impact fee. It’s thought to be one of the few cities in California to take such a proactive step on ADU fees.

The move will reduce construction costs by an estimated $2,700 per ADU. And, Napa City Housing Manager Lark Ferrell said proposed ADU fee reductions being considered by the Napa sanitation and school districts could lower total impact fees by $12,000. We applaud Napa’s action and encourage other cities to take similar steps. The Bay Area Council has sponsored and advocated for a number of bills to remove barriers to ADU construction, including Assemblymember Phil Ting’s bill (AB 2890) which the Senate Appropriations Committee currently is considering.

Landed_logo

Member Spotlight: Landed

Founded in 2015 by Stanford Business School alumni facing the uncertainty of being able to afford to buy a home in the Bay Area themselves, Landed seeks to help essential professionals build financial security in the communities they serve. In the last two years, Landed has partnered with more than 50 public school districts across the Bay Area, Los Angeles, and Denver to offer an innovative shared equity down payment assistance program. Educators receive up to $120,000 towards the down payment on a home in exchange for sharing in the future appreciation in the home’s value at sale or refinance.

Earlier this year, Landed launched Landed Housing Solutions (LHS) to help employers – companies, nonprofits, and municipalities – create and manage their own shared equity down payment programs. In May, LHS launched its first university partnership with Santa Clara University to help their faculty buy homes near campus. These custom housing programs allow employers to invest directly in the homes of employees, sharing in the long-term gain of the properties, without the support being taxed as income. Employers interested in exploring home ownership programs for their employees can contact partnerships@lhs.landed.com for more information.