Residential Housing Is Now Allowed in All Commercial Zones: Are California Cities Ready?

Overview 

California Assembly Bill 2011 (Wicks) was signed into law by Governor Newsom in September 2022 and went into effect on July 1, 2023. It is one of several recently-passed state laws that aims to address the shortage of housing in California, in this case, by creating a pathway for residential development on sites otherwise exclusively locally zoned for commercial use. A 2021 Terner Center study finds that only 38,000 homes were built on commercially-zoned land between 2014 to 2019 in California. AB 2011 was passed with the expectation that it might significantly increase this type of housing production.

Drawing on research and interviews conducted with Bay Area jurisdictions, this commentary summarizes a student capstone research project by Snow Zhu that assesses the extent to which cities and counties anticipated implementation of AB 2011 in their 6th Cycle Housing Element planning process as well as what barriers remain.

What does AB 2011 do?

AB 2011 provides a streamlined ministerial approval pathway for qualifying multifamily projects on commercially-zoned land. The legislation provides two options for eligibility: one for 100 percent affordable housing projects located on commercially-zoned land, and a second for mixed-income projects located on “commercial corridors.”¹ Projects must meet specific labor standards including paying prevailing wages for construction work. Additionally, projects must conform to various requirements related to anticipated demolitions, site location, site size, density, building height, setbacks, and parking. Lastly, jurisdictions evaluating AB 2011 applications must adhere to specific timelines for processing.²

What did Bay Area jurisdictions do to prepare for AB 2011?

Concurrent with the debate and passage of this new law, California jurisdictions had been working to implement 6th Cycle Housing Elements. Every eight years, cities are required by State Housing Element law to zone adequate land to meet state growth targets and to reduce constraints to new housing supply. Interviews with eleven housing experts and an analysis of 106 Bay Area Housing Element documents (draft or approved) revealed that the vast majority of Bay Area jurisdictions were deferring planning to address AB 2011 until after the law was in effect. Only 16 out of 106 Bay Area jurisdictions addressed AB 2011 in their housing element.

For the few jurisdictions that reported taking steps to proactively implement AB 2011, methods include creating a separate permitting process, updating zoning codes, or adopting an implementing ordinance. Interviewees reported that the complexity of AB 2011’s qualifying requirements had posed challenges for many jurisdictions, leading to questions about internal interpretation as well as how to communicate implementation to the public. AB 2011 is only one of a series of new housing laws passed over the last six years, and city planners indicated they are increasingly challenged to track, implement, and ensure compliance with all of them.

Conclusion 

In an ideal world, California’s new housing laws would arrive in time for each jurisdiction to thoughtfully incorporate the local implications of those laws into their updated Housing Elements. However, that is not always possible. To ensure that jurisdictions can successfully implement new housing laws regardless of timing within the Housing Element cycle, there must be more support and technical assistance aimed at the local level. This support can come from the state as well as regional governments and other intermediaries. Each of these entities has an important role to play in helping jurisdictions effectively implement new laws like AB 2011.

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.

This professional report was submitted in partial satisfaction of the requirements for the degree of Master of City Planning in the Department of City and Regional Planning of the University of California, Berkeley, May 2023. Carolina Reid, Faculty Research Advisor for the Terner Center, and Ben Metcalf, Managing Director for the Terner Center, both served as faculty advisors. The analyses and policy proposals put forth in these projects may not be reflective of the views of the Terner Center.

Read the full report as well as a complete set of recommendations in: “Implementation of AB 2011 in the Bay Area: Opportunities for the Housing Element and Beyond.”

Footnotes

1. Mixed-income projects are typically 15 percent affordable. The mix of income levels varies based on tenure (rental or ownership), and a jurisdiction’s existing inclusionary housing policy.

2. See implementation resources published by ABAG-MTC for more details: https://abag.ca.gov/technical-assistance/ab-2011-and-sb-6-staff-resources-implementation.