Lawmakers push $10 billion housing bond, rent cap removal

from Yue Stella YuCalMatters

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California lawmakers showed historic enthusiasm for the affluence movement last year when they passed sweeping housing laws that waive landmark environmental reviews for most urban developments and allow denser housing near transit — ambitious endeavors that would have gotten nowhere just a few years ago.

This year, housing advocates are trying to seize the moment again, especially in pro-construction Gov. Gavin Newsom’s final year in office.

Just days after returning to work, state lawmakers are already paying off $10 billion in bonds that were suspended last year to pay for new and existing affordable housing. the proposal Senate Bill 417cleared the Senate Housing Committee by an 8-1 vote last week and heads to the Senate Appropriations Committee next week. Lawmakers are aiming to put the measure on the June primary ballot, which would require the governor to sign it into law by Jan. 22.

“These homes don’t build themselves, and it’s time to finish the job,” Sen said. Chris Cabaldona Napa Democrat who authored the legislation during a hearing last week. “To unlock the full promise of these reforms, money is needed. Sufficient capital is required, as always, to move these affordable housing projects through approval and planning permission.”

The bond measure would allocate $7 billion to the state’s multifamily housing program, which issues low-interest loans to build and maintain permanent and temporary rental housing for lower-income households. It also includes $2 billion for wildfire prevention, rental assistance and affordable housing for low-income renters and farmworkers, and $1 billion for low-income first-time homebuyer assistance, including down payment assistance.

The committee also approved a separate bond proposal to pay for housing for homeless youth, even as lawmakers sought to combine the bond measures. Sen. Caroline Menjivara Van Nuys Democrat who authored the proposal, said she “couch surfed” at age 19 when she became homeless for a year and a half. The money will help reduce homelessness by offering relief earlier in people’s lives, she said.

“It’s an investment that will really help us save money down the line,” she said.

Legislative appetite for housing bonds points to another good year for abundance advocates. They already have the ear of the governor, who declared himself an ally of the “Yes in the Backyard” movement by signing a stack of bills last year to accelerate housing production, which the governor touted in his Government address status last week.

This year, the governor said, the Legislature should focus on reducing construction costs, “using new construction methods and technologies” and enacting “worker-oriented reforms that bring our labor brothers and sisters with us.”

In February Sen. Jesse Arreguin of Oakland, tenant who is great for quickly finding housing construction, will take the helm of the Senate Housing Committee. He will replace Sen. Aisha Wahaba fellow tenant and Fremont Democrat who has long criticized new construction without protections for low-income tenants.

Rent increase cap bill dies again

But efforts to protect tenant protections hit a major roadblock Tuesday when a controversial rent control proposal died in the Assembly Judiciary Committee. Assembly Bill 1157introduced last year to further limit how much landlords can raise rent each year failed to garner enough votes Tuesday despite being authored by the committee’s chairman, Democratic Assembly Ash Kalra from San Jose.

The bill, sponsored by the tenant rights group Alliance of Californians for Community Empowerment, would have tied the annual rent increase rate to the consumer price index, which measures inflation, and capped it for most rentals at 5 percent, instead of 10 percent under current state law. As a compromise, Kalra narrowed the bill Tuesday to exclude single-family renters from the proposed rent relief in hopes of securing passage. Individual landlords of single-family homes are not subject to rent control under state law.

“Tenants need a permanent solution, not a temporary solution,” Kalra said during Tuesday’s hearing. “If we don’t act urgently to help our tenants in crisis, we will continue to contribute to the risk of homelessness.”

The proposal was halted last year amid strong headwinds from a coalition of landlords and brokers led by the California Apartment Association. They argued on Tuesday that the measure would discourage investment in rental housing and squeeze small landlords. Voters have rejected past rent control measures, such as Proposition 10 in 2018 and Proposition 33 in 2024

The measure needed seven votes to pass, but got just four, all from Democrats. All three Republican committee members voted against the bill. Five other Democrats – MPs Rick Zbar from Los Angeles, Blanca Pacheco of Downey, Diane Papan of San Mateo, Katherine Stephanie of San Francisco and Rebecca Bauer-Kahan of San Ramon — did not vote, which effectively counts as a no vote.

“It shows the power and influence of moneyed interests.”

Assemblyman Ash Kalra, a Democrat who represents San Jose

Some, like Zbur and Bauer-Kahan, raised concerns during the hearing that the proposed law could hurt landlords. The increase in rents is caused by the state’s housing shortage, they argue, and the Legislature should instead focus on building more housing.

Echoing similar concerns, Stephanie’s spokesman, Daniel Herzstein, said in a statement that a lower rent cap would risk squeezing landlords already facing rising costs. Pacheco wasn’t sure how the bill would affect property owners like Mom and Dad, said her spokeswoman, Alina Evans. Pappan’s office did not immediately return a request for comment from CalMatters.

Lydia Morales, a 53-year-old San Diego single mother of three, said her monthly rent increased from $1,300 in 2022 to $2,000 last year. She works at three different hotels to afford it, she said. Without the proposed rent relief, she said she fears being downsized.

“I don’t want to live in my car with my kids,” she said.

After the bill’s defeat, hundreds of tenants affiliated with ACCE chanted in protest. “Housing is a human right!” Some were shouting. Others shouted “shame” at the committee’s almost empty podium after most MPs went into hiding after the vote.

Kalra told CalMatters that the bill failed because “we’re listening to these wealthy landowners and condo owners, not those who are literally struggling.”

“I think it shows the power and influence of moneyed interests,” he said.

Taming unintended consequences

In addition to unveiling ambitious proposals, state lawmakers this year must also figure out how to clean up after new housing policies like Senate Bill 79controversial law created by Sen. Scott Wiener of San Francisco, which waives local zoning restrictions to allow residential buildings up to seven stories near major transit stops in metro areas.

Lawmakers narrowly passed the law last year after it went through 13 rounds of amendments to quell criticism from a a coalition of interest groups and state legislatorswho asked for stricter environmental reviews, labor protections, affordable units and local control.

But critics say the resulting law still has unintended consequences.

Residents of the mobile home park in the Bay Area who live near transit lines say the law makes them vulnerable to displacement by allowing their parks to be redeveloped into apartment complexes, a loophole that Wiener himself acknowledges.

Gail Rubino, a resident of El Dorado Mobile Home Park in Sunnyvale, said at least 36 parks in six of the state’s most populous counties would be affected by the new law. If all are allowed to be rebuilt, more than 5,400 people will be displaced, she estimates. A new account of Wahab, whose district includes many of the parks, seeks to prevent mobile home parks from being redeveloped into transit-oriented housing.

“This lack of protection threatens the existing affordable housing stock that SB 79 seeks to increase,” Rubino told lawmakers last week.

SB79 has caused confusion among local governments, who say the law is so vague they can’t even agree on which counties it applies to. While Wiener said he intends to implement the new law in eight of the state’s most urban counties, local government associations insist only four qualify. Some local government agencies say they are afraid to adopt new zoning maps without clear guidelines, worried it will lead to litigation.

Wiener said he will introduce new legislation later this year to clarify how counties must implement the new law.

This article was originally published on CalMatters and is republished under Creative Commons Attribution-NonCommercial-No Derivatives license.