Terner Center Blog: No Limits

Category Archives: Increasing the Supply of Housing

New Amendments to SB 50 Change Approach to Identifying “Sensitive Communities”

On April 24, SB 50 went before the Senate Governance and Finance committee. While it passed the committee 6-1, the resulting amendments made significant changes to the bill. Some of the biggest changes include what is essentially a carve out for smaller counties like Marin and Santa Barbara as well as a reduction in the number of bus stops that would meet the “high quality” transit requirements.[1]

In this blog, we focus on a third major change: the definition and implementation of the “sensitive communities” provision in the proposed law.

The goal underlying the “sensitive communities” provision in the bill is important. Due to longstanding patterns of exclusionary zoning and residential segregation, high frequency or fixed rail transit stops are often located in lower-income, communities of color. In addition, these communities’ voices have often been marginalized in planning processes, and in recent years, have experienced significant gentrification pressures. To account for this, SB 50 proposes to delay the implementation of its upzoning provisions in “sensitive communities” for five years, allowing these places to opt-in to a community-led planning process.[2] The purpose of delaying SB 50 implementation in sensitive communities is to allow for greater community participation in developing local strategies to meet housing needs as well as to protect vulnerable residents from displacement.

The challenge, as we’ve laid out in a previous brief, is how best to define and implement the “sensitive communities” provision in a way that effectively achieves these protection goals, without undermining the goal of increased supply and the potential for new affordable units as a result of the law’s inclusionary requirements. 

The recent revisions to SB 50 show that policy-makers continue to grapple with this challenge. 

First, the new bill language expands the number of metrics that could be used to define sensitive communities. The initial definition, released in March 2019, proposed to use TCAC’s “High Segregation and Poverty” designation for the majority of the state[3], while deferring to a local definition of “sensitive communities” in the Bay Area (established as part of the CASA initiative).[4]

In the new amendments, the bill refers to “potentially” sensitive communities, and includes three additional metrics that could be used to identify these places: TCAC’s “Low Resource” tracts[5], SB 535 “Disadvantaged Communities[6],” and Qualified Census Tracts[7] as identified by the US Department of Housing and Urban Development. The bill also states that the legislature would consider “additional communities as potentially sensitive communities in inland areas, areas experiencing rapid change in housing cost, and other areas based on objective measures of community sensitivity.”

The impact of this changed language is substantial: even without considering the additional communities provision, 43.9 percent of census tracts in California could be designated as sensitive communities (3,540 out of 8,057 census tracts), compared to 13.7 percent of tracts based on the March 2019 definition. Much of this increase comes from adding the TCAC “Low Resource” tracts (which includes 755 tracts not captured in any other definition) and SB 535’s Disadvantaged Communities (which includes 498 tracts not captured in any other definition). In our accompanying interactive map, stakeholders can look at the impact of the changes in definition for the cities in which they live, as well as turn on and off different definitions cited in the bill.

Second, the May amendments propose a participatory process for finalizing which areas would ultimately be designated as sensitive communities and be subject to delayed implementation. Modeled on the CASA process in the Bay Area, regional councils of governments (or county boards of supervisors) would engage local stakeholders to develop a map of sensitive communities by July 2020—this map would be reviewed by California’s Department of Housing and Community Development (HCD). The city and/or county would then be responsible for leading a process to develop a community plan for those sensitive communities. The community plan must still be consistent with the goals of SB 50 (increasing density and housing choices near transit), but will provide communities with an opportunity to integrate additional renter protections and economic justice concerns into the planning process. Alternatively, if 20 percent of adult residents in a sensitive community sign a petition agreeing to SB 50’s provisions, implementation would move forward as specified in the bill.

The expansion of metrics used to define “potentially sensitive communities” addresses concerns that the earlier bill definition did not adequately identify gentrifying neighborhoods or areas that could be negatively impacted by upzoning. By deferring to a participatory process—similar to what was undertaken in the Bay Area with CASA—the new bill language allows for local determination of which neighborhoods would be eligible to delay implementation and opt into the community plan option. 

It isn’t clear whether these new amendments effectively thread the needle between protections and production. An important question is how these participatory processes will play out—will the regional metropolitan planning organizations and/or counties have sufficient capacity to undertake this work? How will regions ensure effective representation of different stakeholders? Will these processes defer to what the data (which is often incomplete) designate as “sensitive,” or will on the ground perceptions of gentrification and displacement hold sway? Collaborative planning processes are time and resource intensive, and it is important that policy-makers consider how they will help to fund and build the capacity of jurisdictions to undertake this work.

Equally important is the question of whether localities will just use this process as a new way of delaying or avoiding zoning changes altogether. How much land will a region be allowed to designate as “sensitive communities”? Currently, 50 percent of Los Angeles and 60 percent of Merced County census tracts could be classified as falling within a “sensitive community,” and that’s before additional metrics are taken into account. Almost every neighborhood in California is experiencing rapid increases in housing costs—would that be sufficient to be designated a “sensitive community?” The expansiveness of the bill’s current language will make it especially difficult for HCD to assess or contest the validity of regional designations.

Certainly, upzoning is not a panacea for solving the housing crisis—it will take years for new supply to have a measurable effect on housing affordability, which is why any efforts to change land use regulations need to be accompanied by renter protections and policies that expand access to affordable units. But maintaining existing land use regulations that allow localities to avoid permitting new multi-family housing—and especially affordable housing—is not the solution either.

 

[1] By reducing headways to 10 minutes rather than 15, fewer bus routes will be included, since most buses only come at 15 or 30 minute intervals. In San Francisco alone, the number of qualifying bus stops goes from 1,936 with 15 minute headways to 1,213 qualifying stops with 10 minute headways, a 37% reduction in the total number of qualifying stops.

[2] SB 50 also includes significant tenant protections to ensure that upzoning does not result in the direct displacement of renters. SB 50 explicitly lays out restrictions on the demolition of buildings that are affordable, have been occupied by renters in the last seven years, or have had an Ellis Act eviction in the last 15 years.

[3] This designation draws on the California Tax Credit Allocation Committee and California’s Housing and Community Development Department (TCAC/HCD) Opportunity Mapping Initiative. For a complete explanation of the methodology underlying TCAC/HCD’s Opportunity Mapping Initiative, including more information about how the “High Segregation and Poverty” and “Low Resource” designations are calculated, see: https://www.treasurer.ca.gov/ctcac/opportunity/final-opportunity-mapping-methodology.pdf

[4] To learn more about the CASA compact, see https://mtc.ca.gov/sites/default/files/CASA_Compact.pdf

[5] As with the TCAC “High Segregation and Poverty” tracts noted above (see endnote 2), this designation draws on the California Tax Credit Allocation Committee and California’s Housing and Community Development Department (TCAC/HCD) Opportunity Mapping Initiative.

[6] The full methodology for the SB 535 Disadvantaged Communities composite index is available online at https://oehha.ca.gov/media/downloads/calenviroscreen/report/ces3report.pdf.

[7] Additional information about Qualified Census Tracts can be found here: https://www.huduser.gov/portal/datasets/qct.html.


Mapping Oakland’s Vacant Parcels

Posted on by Hayley Raetz

As part of our commitment to the education and professional development of UC Berkeley students, the Terner Center highlights exceptional student work that connects to our mission and research agenda. The analyses and policy proposals put forth in these projects may not be reflective of the official position of the Terner Center. This piece is the second in a series to be released this summer by recent graduates of the City and Regional Planning and Public Policy graduate programs at UC Berkeley. The full report is available here. Vacant Parcels in Oakland Despite Oakland's high demand for housing, vacant parcels remain abundant…


Measuring the Housing Permitting Process in San Francisco

Posted on by Brian Goggin

As part of our commitment to the education and professional development of UC Berkeley students, the Terner Center highlights exceptional student work that connects to our mission and research agenda. The analyses and policy proposals put forth in these projects may not be reflective of the official position of the Terner Center. This piece is the first in a series to be released this summer by recent graduates of the City and Regional Planning and Public Policy graduate programs at UC Berkeley. How long does it take to get a building permit in the Bay Area? Ask 10 developers, you will likely get…


Why We Need a New Conversation on Rent Control in California, Today.

Posted on by Carol Galante

Leaders seeking to address California’s housing crisis are facing an important challenge: how to take meaningful and significant policy action to “stop the bleeding” of rising costs, eviction and displacement without generating new challenges that will only prolong the state’s deep affordability challenges. Today’s debate over rent control, and particularly, the movement to repeal Costa-Hawkins Rental Housing Act (which places statewide limits on how jurisdictions implement rent control), has pushed this challenge to the fore. One side of the debate is working to qualify a measure on the November ballot that would fully repeal Costa-Hawkins, enabling localities to expand rent…


It All Adds Up: The Cost of Housing Development Fees in Seven California Cities

Posted on by Sarah Mawhorter and David Garcia

In the summer of 2017, the Terner Center embarked on a seemingly straightforward task: determine the amount and type of fees levied on new residential development in seven California cities. What was initially thought to be a clear assignment turned into an odyssey of combing through difficult-to-obtain fee schedules, cobbling together piecemeal information across city departments, and repeatedly interviewing various city planning officials. The onerous and lengthy process our research team faced tells the story of the development fee process in California. While fees act as an important tool to mitigate the effects of new construction, the development and administration…


Perspectives: Practitioners Weigh in on Rising Housing Construction Costs in San Francisco

Posted on by Carolina Reid and Hayley Raetz

It is no secret that producing new housing in California is an expensive endeavor. Our Cost of Building Housing Research Series recently launched with the goal of understanding why this is the case, breaking down the elements of the housing development process to identify key cost drivers and potential private and public sector solutions. Today we are releasing our first brief of the series, which examines rising housing construction costs in San Francisco from the perspective of non-profit and market-rate housing developers, architects, and other practitioners on the ground. The brief shares findings from a series of interviews and focus…


ADU Update: Early Lessons and Impacts of California’s State and Local Policy Changes

Posted on by David Garcia

A multi-pronged approach to alleviating the shortage of housing in California and other high-cost regions is urgently needed. As we have discussed in past research, Accessory Dwelling Units (ADUs) - built with a small footprint predominantly in under-utilized single family neighborhoods - can offer much needed naturally-affordable supply to the market. In the fall of 2016, the California State Legislature passed a set of bills intended to clear the way for the proliferation of ADUs  in California. Even before these changes were adopted, many leaders at the local level were pioneering policies to make it easier for residents to build…


Scaling Off-Site Production in the United States: Lessons Learned from Swedish Leader Lindbäcks

Posted on by Mark Trainer and Carol Galante

When it comes to innovation in housing, what does the U.S. have to learn from Sweden? More than you might think. Though they have different histories, economies and social contexts, Sweden and the United States share many housing market challenges – including significant barriers to new construction and high cost of production leading to rapidly appreciating housing prices, especially in urban centers. The Terner Center recently published a policy brief providing a detailed examination of the Swedish housing system, and a companion summary outlining key similarities and differences with the United States. And last month, the Terner Center for Housing…


From Small Steps to Giant Leaps: What Must Come Next for the California Housing Agenda?

On Friday, September 15th, the California Legislature approved a package of 17 bills aimed at putting a dent in the state’s housing crisis. While the votes came down to the wire, in the end, the need for solutions won the day, and in the coming weeks the Governor is expected to sign each piece of legislation, officially ushering in the most significant housing policy changes in recent memory. You can read our recap of these bills in an earlier blog post here. Drafting, amending, defending and eventually passing these bills was no small feat, and the legislature, the Governor and…


Modular Construction in the Bay Area: The Future is Now

This post originally appeared on the ULI San Francisco Blog on August 2, 2017. After years of abstract discussions and false starts, modular building may finally be gaining the momentum it needs to make an impact in the Bay Area. Why now? And why here? On Tuesday, July 18, the San Francisco District Council of the Urban Land Institute hosted “Modular Construction in the Bay Area: The Future is Now”, an event moderated by Terner Center for Housing Innovation Faculty Director Carol Galante. The panel discussion featured four leaders committed to bringing this innovative housing method to scale in the Bay Area: Developers Rick Holliday of Holliday…