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Newsom signs major bills to increase housing density in urban centers

San Francisco Chronicle 9/28/2022 By Dustin Gardiner

After years of thwarted attempts, California leaders succeeded Wednesday in passing a pair of bills that will accelerate construction of new housing units in sleepy urban areas zoned for retail shops, office buildings or parking.

Gov. Gavin Newsom signed the bills standing in the chapel of a former funeral home in San Francisco’s Inner Richmond neighborhood, which will soon be converted into affordable housing. He stood alongside legislators, city officials and union leaders — uniting groups that have been bitterly divided over similar measures in the past.

“What this bill does is it reimagines what our cities can look like,” said Assembly Member Buffy Wicks, an Oakland Democrat who carried the most sweeping measure. “It says, ‘You know what, we have an abundance of retail space, we have an abundance of office parks that are no longer being utilized. And we have a real deficit of housing. Let’s use that land for what it should be for: homes.’”

The bills are designed to cut barriers that make it notoriously difficult and expensive to build housing in California’s city centers. Supporters said the measures will spur the construction of millions of new units in deserted commercial areas:

AB2011 by Wicks, who chairs the Housing Committee, allows for fast-tracked zoning and permit approvals for housing in transit-friendly commercial areas, such as vacant parking lots, strip malls and office parks. In turn, the bill requires at least 15% of the units to be designated affordable.

SB6 by state Sen. Anna Caballero, a Democrat from Merced, will make it easier to build housing on vacant commercial property, like strip malls. It lifts local zoning requirements to expedite such projects and doesn’t include an affordable housing requirement.

Newsom, who was surrounded by union workers in hard hats and orange construction vests as he spoke, said the bills show how state leaders are taking bold actions to address the worsening housing crisis, not just repeating talking points about it. Newsom also sternly warned local governments that his administration will hold them accountable if they throw up roadblocks to new development.

“At the end of the day, we’ve got no one else to blame but ourselves. It happened on our watch,” Newsom said. “We need to all be a little bit more accountable to this crisis of affordability. This is a big moment as we begin ... to take responsibility.”

But the bills almost didn’t make it to Newsom’s desk due to a bitter dispute about the extent to which developers should be required to use union labor to build such projects.

The measures are similar in their aim to increase density, but diverge in how they address the union-labor question. Wicks’ bill does not include language that effectively requires a percentage of the workers on a project to be unionized. Caballero’s bill does include the union-friendly language.

Both bills might have died if not for a breakthrough compromise in the final weeks of legislators’ session that ended a monthslong battle between union leaders and some lawmakers.

Last month, legislative leaders announced they had brokered a deal to advance both bills, with minor amendments. The compromise was significant because major bills to increase density had repeatedly died in the Legislature over the last three years.

AB2011’s passage is a major victory for housing and YIMBY advocates, who’ve long complained that the union-labor quagmire has killed bills needed to address the state’s worsening housing crisis.

The State Building and Construction Trades Council of California had opposed the measure because it doesn’t require that developers use a “skilled and trained workforce,” language from state labor law that, in effect, requires a percentage of workers on a job site to be unionized.

Caballero’s bill includes that pro-union language, though it was amended to give developers a route to use non-unionized labor if multiple contractors with skilled labor don’t bid on a project.

Wicks’ measure, instead, requires developers to pay their workers “prevailing wages” for the area (or the hourly rate earned by the majority of workers engaged in a particular craft), offer health care on large projects with 50 or more units and create apprenticeship programs for some projects.

The Building Trades Council had vehemently opposed AB2011, which it said would enrich developers at the expense of workers. But the council dropped its opposition after legislators announced their deal to pass both bills.

Wicks’ bill was bolstered by a split within union circles: The California Conference of Carpenters was one of the key sponsors of AB2011. The carpenters said insisting on union-first language hamstrings construction when there’s already a shortage of skilled construction labor.

With the union dispute set aside — at least for now — legislators and Newsom had multiple causes for celebration during Wednesday’s bill-signing event.

The governor announced that the state has awarded $1.02 billion in funding for 30 affordable housing projects across the state, which he said will help build 2,755 new units. California’s budget this year sets aside $3.3 billion for affordable housing programs, on top of $10.3 billion the state invested last year.

Newsom also signed 36 additional bills designed to help confront California’s growing twin crises of housing affordability and homelessness. Among the measures:

AB2234 by Assembly Member Robert Rivas, D-Hollister (San Benito County), requires local governments to approve or deny various building permits within a strict timeline. Builders have long complained that delays in obtaining such permits can derail projects and increases costs.

SB886 by state Sen. Scott Wiener, D-San Francisco, would streamline student and faculty housing projects by allowing the UC, California State University and community college systems to skip the lengthy review process required under the California Environmental Quality Act. The bill was introduced earlier this year after a CEQA lawsuit temporarily forced UC Berkeley to cap admissions.

Dustin Gardiner (he/him) is a San Francisco Chronicle staff writer. Email: Twitter: @dustingardiner

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