Newsom signs off on bills to increase California housing production, bolster tenant protections

Starting next year in California, homeowners can sell ADUs separately from their home, religious institutions can build housing on their land, and developers can add more homes along the coast.

Starting next year in California, homeowners can sell the granny unit in their backyard. Religious institutions can build housing on their land. And developers can add more homes along the coast in places that were once off-limits.

The sweeping initiatives were among more than 50 housing bills signed by Gov. Gavin Newsom intended to expedite the state’s housing supply and protect tenants from evictions in the face of a statewide housing crisis.

The flurry of housing bills this year passed with the support of labor interests who came together with housing advocates to break through opposition from local governments that stand to lose control over approving housing.

“It’s simple math — California needs to build more housing and ensure the housing we have is affordable,” Newsom said in a statement. “These 56 bills build on that work, supporting tenants and ensuring cities are held accountable to plan for and permit their fair share of housing.”

Despite years of legislation, California is still behind on its housing production goals, with many localities continuing to put up roadblocks. Newsom has become increasingly aggressive about pushing back on “not in my backyard” politics: With the Legislature, he has directed billions toward affordable housing production and worked with the attorney general to bring cities and counties into compliance with state housing laws.

Working toward those efforts on the legislative side is Sen. Scott Wiener, a leader on housing issues who authored two of the major bills to come out of this year’s session, SB 4 and SB 423.

“The era of saying no to housing is coming to an end,” the San Francisco Democrat said in a statement. “We’ve been planting seeds for years to get us to a brighter housing future, and today we’re continuing strongly down that path.”

Streamlining housing

SB 423, authored by Wiener, extends by a decade a law meant to sunset in 2026 that allows developers of multifamily housing to bypass some of the lengthy approval processes in cities that are falling behind on their state-mandated housing goals. That law, SB 35, has led to the approval of more than 18,000 new units since it was passed in 2017, according to a recent study by the Terner Center for Housing Innovation at UC Berkeley.

The more time that a developer spends getting the permit for a project, the more expensive the eventual project costs, said Muhammad Alameldin, a policy associate with the Terner Center. Those costs eventually are passed onto the homeowner or renter.

“Streamlining housing development is important to cut down costs and to deliver the housing that we desperately need now,” he said.

The law also allows construction in certain coastal areas that were exempted from the 2017 law. The bill faced opposition this summer from environmental groups and coastal communities that worried it would open the door for projects to be built in areas vulnerable to flooding and sea level rise. The California Coastal Commission, which regulates development along the coast, eventually dropped its opposition to the law after Wiener clarified that the law wouldn’t apply to “environmentally sensitive or hazardous” areas.

Developers who take advantage of the streamlining process will be required to pay prevailing union wages — a provision pushed for by the California Conference of Carpenters, the union that co-sponsored the bill. But many developers say that can raise construction costs, and prevents them from taking advantage of the law.

‘Yes in God’s Backyard’

SB 4, authored by Wiener, rezones land owned by religious organizations and nonprofit colleges to allow for affordable housing on their property. Nicknamed YIGBY, or “Yes in God’s Backyard,” this was the bill’s third time before the Legislature.

“Many synagogues and houses of worship are eager to do more than volunteer and donate — they want to build affordable housing and bring their neighbors off the streets for good,” said David Bocarsly, executive director for the Jewish Public Affairs Committee of California, in a statement.

A recent study by the Terner Center found that SB4 would open up 171,000 acres of land across the state for affordable housing.

ADUs can be sold separately from a home

There’s been a boom in construction of ADUs, or accessory dwelling units, also known as “granny units,” since state laws were passed in 2016 and 2017 to streamline permitting. Nearly one in five new housing units built in California today are ADUs, according to data from the state Department of Housing and Community Development.

And now AB 1033, authored by Assemblymember Phil Ting of San Francisco, allows property owners to sell those dwelling units separately from homes.

“With the governor’s signature on my bills, ADUs can continue to build on the success of our backyard revolution. Not only will there be more rental units, but this will also open the door to affordable homeownership for many,” Ting said in a statement.

Ting also pushed for another $25 million in this year’s budget for the ADU Grant Program, which helps homeowners with preconstruction costs for ADUs.

‘People as pollution’

A new law drafted in response to a lawsuit filed by neighbors who opposed a UC Berkeley housing project at People’s Park exempts noise generated by the residents of a residential project as an impact on the environment under the California Environmental Quality Act (CEQA).

In the 2021 lawsuit, neighbors argued that university officials had failed to consider the noise impact of students from the planned 1,100-bed student dormitory. In a February ruling, an appeals court judge sided with neighbors.

The bill, authored by Assemblymember Buffy Wicks, an Oakland Democrat, doesn’t mean that the university will be allowed to begin construction on its project right away. The case still heads to the state Supreme Court. But the new law will undermine the basis of the appeals court ruling from February.

“AB 1307 reestablishes over 50 years of CEQA precedent, and reaffirms that people are not pollution,” Wicks said in a statement.

Limiting security deposits

In a win for renters, the governor also signed AB 12, which limits landlords from taking no more than a month’s rent for security deposits. Currently, landlords may charge up to two months’ rent for a deposit, or three months for furnished properties.

“Massive security deposits can create insurmountable barriers to housing affordability and accessibility for millions of Californians,” the bill’s author, Matt Haney, said on social media Wednesday. “Despite skyrocketing rents, laws on ensuring affordable security deposits haven’t changed substantially since the 1970s. The result is that landlords lose out on good tenants and tenants stay in homes that are too crowded, unsafe or far from work.”

The law will go into effect in June 2024.