Testimony to the Little Hoover Commission on Expanding California’s Housing Supply

On September 24, 2026, Deputy Director of Policy David Garcia testified to the Little Hoover Commission on expanding California’s housing supply.

Good morning, members of the commission.

My name is David Garcia, and I am the Deputy Director of Policy at UC Berkeley’s Terner Center for Housing Innovation. The mission of the Terner Center is to formulate bold strategies to house families from all walks of life in vibrant, sustainable, and affordable homes and communities. Our work provides timely analysis and data-driven research to support policy and innovation for policymakers, practitioners, and advocates in addressing with urgency the multiple, layered crises of housing affordability, entrenched inequities, and climate change. The Terner Center aims to provide actionable, pragmatic paths that are based in evidence and can bring together a coalition to make change.

I am here today to discuss the various efforts made by the California legislature in recent years to address the state’s housing supply and affordability crisis. Since 2021, over 100 bills pertaining to housing have been passed and signed into law. These have included efforts to streamline the housing approval process, provide certainty to developers, and allow for more homes to be built in more places. Despite the passage of so many new laws, by most measures, the state is still not meeting its housing production goals. Since 2021, new housing approved and built has generally remained flat. Part of this stagnation is due to economic conditions. In recent years, a combination of rising interest rates, increased construction costs due in large part to materials shortages, and tariffs have dampened housing production, as fewer projects have been financially viable. That said, our research has also shown that many of the laws passed in 2021 are not utilized because of other issues that have little to do with exogenous factors. Specifically, we have found that some bills have yet to reach their potential due to the additional costs and requirements imposed on the housing projects these laws are intended to catalyze.

For example, in testimony earlier this year to the California Assembly Housing Committee, we highlighted that Assembly Bill 2011, a bill that allows developers to bypass local review requirements on land zoned for commercial use, has not yet been heavily utilized by developers. Specifically, we noted that roughly 5,800 new homes have been either applied for, entitled, or permitted since the law went into effect in July of 2023.^[1] Through interviews with practitioners for forthcoming research on the usage of recent state laws, we have learned that the relatively low uptake of the law is because of the law’s added costs and requirements, such as narrow site requirements and higher wage standards, among other factors. Other laws have seen similarly low usage thus far. This includes Senate Bill 9 and Senate Bill 684, two laws meant to spur smaller-scale development on single-family parcels,^[2] as well as Senate Bill 4, a law to allow for residential housing on land owned by faith-based organizations. These bills have struggled to gain traction given their narrow applicability, such as requirements that projects be built on vacant lots, as in the case of Senate Bill 684, and that new homes be owner-occupied, which is the case with Senate Bill 9.

All of that said, there are areas where reforms have yielded positive results—for example, the various reforms made to the state Density Bonus Law (DBL). As one analysis has found, the combination of changes to DBL that allow for more flexibility in how the law is invoked, access to more waivers and concessions, as well as a greater increase in allowed density overall has led to a significant increase in projects utilizing the DBL. In 2024, more than 48,000 homes were approved that used the DBL.^[3] We found in our own research that developers will almost always use DBL for new projects today because of the aforementioned reforms that have allowed more projects to be financially feasible. It should also be noted that one of the most significant reforms came just within the last year when Governor Newsom signed Assembly Bill 130 into law, expanding exemptions to the California Environmental Quality Act. Interviewees have told us that this change, while relatively new, can significantly increase project viability by creating much more predictable development timelines.

Other high-profile laws are also showing early signs of usage. For example, Senate Bill 79, passed in 2025 to allow developers to build more densely around transit stations, only went into effect this past July, yet there are reports of several property owners filing applications to use the law to build much more densely than would otherwise be allowed by local rules. This includes proposals in affluent communities such as Palo Alto and Santa Monica.

Another important factor to consider is that a number of laws passed prior to 2021 seem to be pushing many localities to adopt more permissive development rules that may make more recent land use laws less necessary. For example, because of a combination of laws requiring cities to plan for more homes while also limiting their ability to reject compliant housing proposals, cities have fewer options to stop new homes from being built. A few developers told us that some cities have adopted their own local rules that are favorable to developers in order to curtail developer use of state laws that would otherwise limit their ability to influence a project. Also, while development under some laws may seem limited, we also have found that the presence of these laws is useful nonetheless because they give some builders leverage in negotiations with local officials.

While we have yet to reach the levels of homebuilding required to adequately address our state’s housing shortage, there are signs that we are generally moving in the right direction. In addition to laws passed in recent years, legislators are also beginning to acknowledge the need to address the rising cost of building homes overall. This was evident in a package of bills the state legislature passed this year that supports the growth of factory-built housing, which has the potential to lower the cost and time it takes to deliver new homes. In addition, they passed Assembly Bill 179, a budget trailer bill that discourages cities from imposing impact fees on certain affordable housing projects. There was also an effort to address rising costs related to construction defect liability, though this effort ultimately did not make it to the governor’s desk. Nevertheless, the attention paid to cost reduction is needed if California is to address the full range of issues limiting the expansion of the state’s housing supply.

Lastly, it is imperative that policymakers continue to pursue efforts to collect comprehensive data and assess the effectiveness of recent, past, and future laws. While California is a national leader in collecting local-level data through the Annual Progress Report process, much more could be done to capture information related to how state laws are being used and whether or not they are working as intended. At the Terner Center, such information is vital for us to perform the analysis and research needed to support the state’s broader housing efforts.

Thank you once again for the opportunity to testify to the commission, and I look forward to answering any questions.

Endnotes

^[1] Garcia, D. (2026, February 26). Testimony to the California State Assembly Committee on Housing and Community Development. Terner Center for Housing Innovation, University of California, Berkeley. Retrieved from: https://ternercenter.berkeley.edu/blog/testimony-to-the-california-state-assembly-committee-on-housing-and-community-development/

^[2] Garcia, D., and Alameldin, M. (2023, January 18). California’s HOME Act Turns One: Data and Insights from the First Year of Senate Bill 9. Terner Center for Housing Innovation, UC Berkeley. Retrieved from: https://ternercenter.berkeley.edu/research-and-policy/sb-9-turns-one-applications/

^[3] Circulate Planning & Policy. (2026.) Win-Win Bonus: How California’s Bonus Law Quietly Transformed Housing Approvals. Retrieved from: https://www.circulatesd.org/win_win_bonus_report