September 3, 2020
FROM: Sustainable TamAlmonte
TO: Honorable Gavin Newsom, Governor, State of California , 1303 10th Street, Suite 1173, Sacramento, CA 95814
Re: Veto Assembly Bill 725 (Wicks D) General plans: housing element: moderate-income and above moderate-income housing: suburban and metropolitan jurisdictions.
Dear Governor Newsom,
We urge you to veto Assembly Bill 725.
I. ABOUT ASSEMBLY BILL 725
Bill Overview: As part of the Housing Element process, jurisdictions must show they have sufficient sites to accommodate their 8-year Regional Housing Needs Allocation (RHNA), including units affordable at very low, low, moderate, and above moderate-incomes.
As part of the Housing Element process, jurisdictions must show they have sufficient sites to accommodate their 8-year Regional Housing Needs Allocation (RHNA), including units affordable at very low, low, moderate, and above moderate-incomes.
AB-725 would require metropolitan jurisdictions (but not unincorporated areas) to accommodate at least 25% of their RHNA for moderate-income housing on sites with zoning that allows at least four units of housing, but not more than 100 units of housing. In addition, AB-725 would require metropolitan jurisdictions to accommodate 25% of their RHNA for above moderate-income housing on sites with zoning that allows at least four units of housing.
Sites with an existing single-family home could be included in the sites used to satisfy the above requirements, if they were up-zoned to 4 units. The units authorized by the zoning would not include any ADUs or JADUs. In other words, these parcels would require at least four units in addition to any permissible ADUs or JADUs.
II. REASONS TO VETO AB-725
A. AB-725 makes it more difficult for jurisdictions to select the best sites to accommodate their RHNA:
Due to pressures created by previous Housing Element legislation, the majority of cities and counties are having difficulty attracting enough housing to hit state-ordered growth targets known as the Regional Housing Needs Allocation (RHNA). By restricting where RHNA sites can be located, AB-725 would make it even more difficult for jurisdictions to meet their targets.
B. AB-725 takes away local control of land use:
By forcing cities to target growth in low-density areas, AB-725 would override local land use plans and eviscerate decades of careful planning. Local governments are much better than the State at determining where and how much housing growth should occur. Local jurisdictions are also better at anticipating significant adverse impacts and necessary infrastructure, utilities, and public services.
C. AB-725 could bring upheaval to low-density residential areas:
AB-725 could pressure cities to up-zone established single-family and other low-density built residential neighborhoods. This could open up such communities to speculators who could demolish existing housing in order to create dense residential development. Working-class and middle-class single-family neighborhoods could be turned into market-rate and luxury multifamily rental complexes owned by private equity firms. The New York Times Magazine article entitled; “A $60 Billion Housing Grab by Wall Street” illustrates the appetite that Wallstreet and Big Real Estate have for snatching up single-family homes and turning them into rental properties.
D. AB-725 punishes cities and discourages Accessory Dwelling Units (ADUs) by not allowing ADUs to count towards RHNA targets:
The bill’s definition of “units of housing” disqualifies Accessory Dwelling Units [ADUs] aka granny flats, from being counted as housing in the state’s RHNA targets. This provision punishes cities who are doing the right thing by encouraging ADUs.
E. AB-725 could ruin single-family neighborhoods, which are greatly treasured and should be protected:
AB-725 could pressure jurisdictions to up-zone single-family zones and allow four housing units where there used to be one, even though most residents prefer single-family homes. A 2019 Redfin survey found that regardless of where people live within the US, more than 85% of home buyers and sellers (including millennials) prefer single-family homes with more space, privacy, and gardens over a unit in a triplex that has a shorter commute.
In addition, since the outbreak of COVID-19, realtors report a trend of city dwellers wanting to move to single-family neighborhoods in the suburbs to escape dense living conditions, which contribute to the spread of the disease.
Over time, the bill would cause the supply of single-family homes to diminish due to conversions to fourplexes and the price for the remaining single-family dwellings would become even more expensive. This would make it more difficult for residents to attain their preferred lifestyle.
F. AB-725 would increase the risk of significant adverse impacts:
The bill’s subsequent housing densification and population growth would increase the risk of adverse impacts on the environment, public health and safety, traffic congestion, infrastructure, utilities (water supply), public services (schools), views, sunlight, privacy, neighborhood character, and quality of life.
G. AB-725 would create unfunded mandates:
There is no funding for dealing with the above listed impacts and SB-1120 provides an official sidestep of addressing this issue. The bill states; “SEC. 4. No reimbursement is required by this act pursuant to Section 6 of Article XIII B of the California Constitution because a local agency or school district has the authority to levy service charges, fees, or assessments sufficient to pay for the program or level of service mandated by this act, within the meaning of Section 17556 of the Government Code."
H. Increasing housing density is the wrong solution to meet our affordable housing needs:
Assembly Bill 725 is based on the unrealistic premise that increasing density and allowable buildout of housing would result in affordable housing being built. However, there is already plenty of density and allowable buildout for housing and this has not led to enough affordable housing being provided.
We know from experience and observation that high-density housing does not equate to affordable housing. San Francisco’s Nob and Telegraph Hills, Los Angeles’ Wilshire Corridor, and high-rises in downtown San Diego are all examples of upper-income areas where housing densities are quite high. Indeed, San Francisco is the second densest city in the United States with a density of 6,266 people per square mile and yet its median home price is $1.4 million and its median 1-bedroom rent is $3360 per month.
When discussing the need for housing, it is important to recognize that California’s population growth rate is at a record low and predicted to remain low. Estimates released on Dec. 20, 2019 by the California Department of Finance show that between July 1, 2018 and July 1, 2019, the growth rate was just .35%, the lowest recorded growth rate since 1900. During the same time period, the Department reported that there was substantial negative domestic net migration, which resulted in a loss of 39,500 residents – “the first time since the 2010 census that California has had more people leaving the state than moving in from abroad or other states”.
Therefore, California, as a whole, only needs a modest increase in housing every year. We do not need to significantly up-zone vast areas of the state to accomplish this. There is plenty of potential housing buildout already allowed by the General Plans and zoning of jurisdictions throughout the state. And, under current Housing Element Law, this will grow each time jurisdictions update their housing plans to meet new Regional Housing Need Allocations.
So, massive up-zoning by the State for mostly market rate housing is not the answer. This strategy primarily benefits real estate investors, real estate developers, real estate rental firms, and large corporations rather than those in need of affordable housing.
Instead, we need to provide the correct amount of affordable housing where it is already allowed and prevent the loss of existing affordable housing. Funding and subsidies are needed for local solutions to affordable housing. In addition, funding/subsidies are required to mitigate the adverse impacts that the increased housing would create.
Regarding the jobs/housing imbalance created by large corporations, the State should incentivize Corporations to open offices in less populated areas of California that are jobs poor and housing rich, where the cost of land and housing are much less expensive. In addition, the State should incentivize cities and counties to require “Full Mitigation”, which makes commercial development approval contingent on adequate housing.
Once again, we urge you to veto Assembly Bill 725. Local jurisdictions are much better than the State at determining where and how much housing should occur.
Thank you in advance for your conscientious consideration.
Very truly yours,
Sharon Rushton, Chair