Hoping to make a dent in California's housing crisis, state lawmakers have passed a barrage of sweeping new laws that streamline approval processes for residential developments, limit the ability of cities to regulate density in housing projects and effectively abolish single-family zones.
But while the laws have been hailed by housing advocates, Democratic lawmakers and Gov. Gavin Newsom as necessary tools to create more housing, local officials are still trying to grasp the laws' implications on both their communities and their zoning codes. In Palo Alto, city planners are already crafting an "urgency ordinance" that would modify the municipal code to comply with the state laws — an update that they hope to bring to the City Council in December.
The two bills that have garnered the most attention, celebration and pushback during the recently concluded legislative session have been Senate Bill 9, which allows the splitting of single-family lots to create up to four total dwellings, and SB 10, which allows cities to approve developments with 10 dwellings per acre in transit-rich areas, notwithstanding any existing zoning restrictions that require a lower density.
But while SB 9 and SB 10 have dominated the spotlight, neither is expected to significantly boost housing any time soon. An analysis by the Terner Center for Housing Innovation at University of California at Berkeley estimated that SB 9 could potentially generate 700,000 new dwellings across the state. The analysis notes, however, that "relatively few new single-family parcels are expected to become financially feasible for added units as a direct consequence of this bill" and suggests that the law will "modestly accelerate the addition of new units relative to status quo."
The impact of SB 10, which drew intense opposition from Palo Alto, Redondo Beach and other cities, will likely be even more negligible. That's because it's optional and, in Palo Alto at least, neither the council nor planning staff intend to exercise the option.
"It's a tool and not a mandate. … Unless we received direction otherwise, we'd acknowledge that this is a tool and we can use it, but we're not considering this as part of our work plan going forward," principal planner Sheldon Ah Sing said Wednesday night during a Planning and Transportation Commission discussion of new housing laws.
A lesser known law that could have a potentially greater impact in Palo Alto is SB 478, which prohibits cities from using minimal lot-size requirements to preclude residential development and which sets minimum density requirements in residential zones that have multiunit developments. Under this law, developments that have between three and seven units would have a minimum floor area ratio of 1.0, while those with between eight and 10 units must be allowed a floor area ratio of 1.25.
Because many of these zones in Palo Alto currently allow a floor area ratio of 0.4 or 0.6, SB 478 would effectively double the density on residential lots.
Given the city's existing density restrictions, SB 478 impacts most of Palo Alto's existing mixed-use development standards in commercial districts, according to planning staff. Sing said that the law is one of several that will require the city to make changes to the local zoning code to ensure compliance. Planning staff expect to bring an urgency ordinance with a host of zoning changes to the council in early December and approve permanent ordinances in spring 2022.
Like SB 10, SB 478 was authored by state Sen. Scott Wiener, D-San Francisco, who described it as a "nerd bill," but an "important one" insomuch as it prevents loopholes that cities use to deny housing.
"Small, multi-unit housing — prior to SB 478 — could be prevented even allowed by local zoning code because of onerous and unnecessary restrictions on square footage and lot size," Wiener said in a statement just after Newsom signed the bill into law. "Now, with the passage of SB 9 and SB 10, SB 478 will ensure we can actually build the small, multi-unit housing that we need so badly across the state. SB 478 is wonky, but it will help us make a dent in our housing crisis."
Another law that Palo Alto planners are paying close attention to is SB 8, which extends by five years the provisions of SB 330, also known as the Housing Crisis Act of 2019. SB 330 was set to expire in 2025; SB 8 extends it to 2030.
Both bills effectively freeze the design standards that a city has in place at the time a developer submits a housing application, thus preventing municipalities from erecting new barriers over the approval process. They also prohibit cities from holding more than five public hearings for residential developments. SB 8 clarifies that the five-meeting limit includes appeal hearings and that the law applies to projects that include a single-dwelling unit.
The law is particularly relevant in Palo Alto, which is currently reviewing two development proposals that are relying on the streamlining provisions of SB 330: a proposal from The Sobrato Organization for 91 townhomes at 200 Portage Ave., next to the former site of Fry's Electronics, and a plan by SummerHill Homes to construct 48 residences at 2850 W. Bayshore Road, next to Greer Park.
A new report from the Department of Planning and Development Services highlights SB 8 as one of four laws — along with SB 9, SB 10 and SB 478 — that are "relevant to our planning and housing policies and are focused primarily on process streamlining and housing production." Deputy City Attorney Albert Yang said that while SB 8 technically doesn't require the city to modify its code, staff will review its code to ensure it is consistent with the law's extension of the Housing Crisis Act's streamlining provisions to single-dwelling residences.
The planning commission supported planning staff's proposal to modify the zoning code with the urgency ordinance later this year and then make further refinements early next year before adopting permanent changes. Chair Bart Hechtman pointed to the potentially dramatic implications of the new bills — particularly SB 9 — and said he expects the planning commission to play a role in creating the permanent ordinance.
"This is a far-reaching legislation that the state has adopted and placed on our doorstep," Hechtman said. "It can have some potentially significant effects."