SB 827: Another Imperfect yet Positive Effort to Break State’s Housing Logjam

We’ve been critical, for good reason, of the Legislature’s attempts to solve California’s housing crisis. Lawmakers have done little more than talk about the problem and pass useless, even counterproductive, legislation.

But we acknowledge good work when we see it, and we commend Democratic Sen. Scott Wiener for his improved effort on housing. But that’s faint praise compared to the words of Michael Hendrix, director of state and local policy at the Manhattan Institute. He wrote in the California Political Review that “Scott Wiener has positioned himself as a visionary reformer of California’s housing crisis.”

So what has Wiener done to deserve such accolades? He’s introduced Senate Bill 827, legislation that would override some local restrictions on housing developments that are near transit stations and bus stops located on high-traffic routes.

“The bill, in its present form, is an appropriate use of the state’s preemptive power and is likely to slow or reverse the growth in housing costs,” says a new paper from the Mercatus Center at George Mason University in Virginia. “State law already includes a requirement for cities to permit new housing to meet targets for new supply, but the law has no teeth. SB 827, in turn, would more effectively limit localities’ ability to restrict housing supply.”

“Midrise development in the 45- to 85-foot range, which SB 827 would allow, would certainly transform areas” such as those near the many California transit stations which “are surrounded by low-density retail centers, suburban homes, and parking lots,” say Mercatus research fellows Emily Hamilton and Salim Furth. (Note:  You can listen to Hamilton and Furth discuss their paper on this week’s edition of the PRI podcast.)

The owners of these real estate parcels are unable, due to local zoning laws, to realize the full value of their property. Lifting the in-place restrictions would allow those properties to be put to their highest, best use, which in many areas would be housing developments that would increase the state’s lagging housing stock.

For those worried about local interference from Sacramento, Hamilton and Furth remind us that “preemption of local land-use regulations is a legal recourse of state governments because municipalities are ‘creatures of their states.’”

In fact, it is “the state’s duty,” says the paper, “to protect property owners’ rights to determine the best use of their land. The bill would allow more development options than current local rules do.”

According to Hamilton and Furth, SB 827 would also:

“Improve conditions for economic growth” because “the density of people, firms, and industries within cities results in agglomeration benefits; living in cities makes those residents more productive by giving them an opportunity to learn from one another and creating an environment that supports innovation.”

Support “efficient use of state transportation investments” since “liberal zoning near transit” would likely increase transit fares, which “could cover a larger portion of its expenses, freeing taxpayers from having to subsidize it so heavily.”

The report reminds us that as “the bill moves forward in the political process, it will likely continue to evolve.” But as long as it “still upzones substantial amounts of land near transit stations, it can be expected to increase housing supply growth and improve affordability.”

Alone, SB 827 won’t resolve the state’s housing problem. Wiener deserves credit, though, for recognizing an opportunity and trying to seize it.

Kerry Jackson is a fellow with the Center for California Reform at the Pacific Research Institute.

Nothing contained in this blog is to be construed as necessarily reflecting the views of the Pacific Research Institute or as an attempt to thwart or aid the passage of any legislation.

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