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State Sen. Scott Wiener, D-San Francisco, came to Oakland on Tuesday to promote a bill that would boost construction of apartment buildings and condominiums in an effort to address the state’s housing shortage.
But Wiener and other speakers at a news conference on the steps of City Hall were drowned out by protesters, including people from the homeless activist group Moms 4 Housing, who said Senate Bill 50 wouldn’t provide enough affordable housing.
Wiener has tried for several years to get the state Legislature to pass his bill, which he said would eliminate restrictive low-density zoning near public transit and job centers and create new zoning standards for those areas.
SB 50 must pass the Senate Appropriations Committee and then the full Senate by the end of January in order to move forward in the new legislative session.
Wiener told reporters after the noisy news conference ended that he’s “cautiously optimistic we will pass this to the Senate floor.”
At the beginning of the news conference, Wiener said the legislation is needed because, “We have a terrible housing crisis in California.”
Wiener said he recently revised SB 50 to allow for more flexibility in how best to implement the legislation, such as creating a two-year delayed implementation period and allowing cities to craft their own alternative plans that meet the bill’s goals.
He said that under his bill, cities won’t be able to limit density near job or transit centers and will be required to allow small and mid-size apartment buildings.
Wiener said an example is that cities will be able to build taller in one area but shorter in another, or denser in one area but less dense in another.
He said SB 50 guarantees that up to 25% of units must be affordable, protects tenants by restricting demolitions of sound housing and has a five-year delayed implementation in low-income communities that are at risk of gentrification.
Oakland Mayor Libby Schaaf, state Sen. Nancy Skinner, D-Berkeley, and other elected officials joined Wiener at the news conference to speak in support of his bill.
But their remarks were mostly drowned out by a large group of housing activists who loudly shouted slogans such as, “Affordability — the rent’s too high!” and “Housing for people, not for profit!”
Other slogans that the protesters chanted were, “Give the moms a home today!” and, “Where’s the affordable housing?”
When a representative from the California Association of Realtors tried to speak, the protesters booed her and shouted, “No more speculators!”
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I was 15 feet from the speakers; I could not hear any of them.
The protesters paused to identify a speaker half-way through but booed when she admitted to being a REALTOR.
SB 50 is about adding high-density ownership housing in areas otherwise zoned for single-family homes – including 5-story condos with little or no onsite parking.
No Moms-4-Housing would be buying any subsidized units. If developers built apartments – which is less likely – only upper-middle income tenants could afford even “below-market” units included.
It was clear 2 years ago that HIGH TECH CORPORATIONS created YIMBY and proposed SB 50’s predecessor: SB 827. The big corporations are now staying low to the ground – leaving their operatives and politicians to speak for them.
But at this news conference, the two-faced, double-talking politicians were not going to be heard – except by the press microphones.
@Gary the changes can be viewed here: https://leginfo.legislature.ca.gov/faces/billVersionsCompareClient.xhtml?bill_id=201920200SB50&cversion=20190SB5096AMD
In response to Gary you said:
”Thanks for the link to proposed amendments to SB 50. The legislative analysis of the bill for the Senate Appropriations Committee (the bill’s next stop) confirms that SB 50 – if adopted as proposed – would not REQUIRE any below-market housing for either ownership or rental projects.”
Again, even if SB50 does not require affordable housing, the other laws will. I looked at the updated SB 50 bill and this is what I found. The proposed bill includes the following sections:
“SECTION 1. Section 65589.5 of the Government Code, as amended by Section 3.1 of Chapter 665 of the Statutes of 2019, is amended to read:
65589.5.
(g) THIS SECTION SHALL BE APPLICABLE TO CHARTER CITIES BECAUSE THE LEGISLATURE FINDS THAT THE LACK OF HOUSING, INCLUDING EMERGENCY SHELTER, IS A CRITICAL STATEWIDE PROBLEM.
(h) The following definitions apply for the purposes of this section:
(1) “Feasible” means capable of being accomplished in a successful manner within a reasonable period of time, taking into account economic, environmental, social, and technological factors.
(2) “Housing development project” means a use consisting of any of the following:
(A) Residential units only.
(B) Mixed-use developments consisting of residential and nonresidential uses with at least two-thirds of the square footage designated for residential use.
(C) Transitional housing or supportive housing.
(3) “HOUSING FOR VERY LOW, LOW-, OR MODERATE-INCOME HOUSEHOLDS” MEANS THAT EITHER (A) AT LEAST 20 PERCENT OF THE TOTAL UNITS SHALL BE SOLD OR RENTED TO LOWER INCOME HOUSEHOLDS, AS DEFINED IN SECTION 50079.5 OF THE HEALTH AND SAFETY CODE, OR (B) 100 PERCENT OF THE UNITS SHALL BE SOLD OR RENTED TO PERSONS AND FAMILIES OF MODERATE INCOME AS DEFINED IN SECTION 50093 OF THE HEALTH AND SAFETY CODE, OR PERSONS AND FAMILIES OF MIDDLE INCOME, AS DEFINED IN SECTION 65008 OF THIS CODE. HOUSING UNITS TARGETED FOR LOWER INCOME HOUSEHOLDS SHALL BE MADE AVAILABLE AT A MONTHLY HOUSING COST THAT DOES NOT EXCEED 30 PERCENT OF 60 PERCENT OF AREA MEDIAN INCOME WITH ADJUSTMENTS FOR HOUSEHOLD SIZE MADE IN ACCORDANCE WITH THE ADJUSTMENT FACTORS ON WHICH THE LOWER INCOME ELIGIBILITY LIMITS ARE BASED. HOUSING UNITS TARGETED FOR PERSONS AND FAMILIES OF MODERATE INCOME SHALL BE MADE AVAILABLE AT A MONTHLY HOUSING COST THAT DOES NOT EXCEED 30 PERCENT OF 100 PERCENT OF AREA MEDIAN INCOME WITH ADJUSTMENTS FOR HOUSEHOLD SIZE MADE IN ACCORDANCE WITH THE ADJUSTMENT FACTORS ON WHICH THE MODERATE-INCOME ELIGIBILITY LIMITS ARE BASED.”
So at least 20% of the units have to be priced for lower income, which is 80% of the area median income or 100% has to be priced at moderate income levels which is equal to only up to 120% area median income, but that means the rate cannot exceed 30% of that income at the same time.
So let’s look at the area median income of Mountain View which is $120,351. At 60% the income would be $ 72,210.6 and 30% of that would be $ 21,663.18 or a monthly rate of $ 1,805.27 a month. Given that the MEDIAN rent price in Mountain View from Zillow is $4,200 a month, that is a significant price cut regarding the “market rates” of 57%. But that is if they choose the 20% option. That will reduce the cash flow per unit on only the 20% units. If you adjust the overall cash flow impact on the project, that would mean that the 57% will need to be divided by 5 which results in 11.4% impact on potential cash flow
So let’s look at the area median income of Mountain View which is $120,351. At 120% the income would be $144,421.2 and 30% of the 100% AMI is of that would be $ 36,105.3 or a monthly rate of $ 3,008.7 a month. Given that the MEDIAN rent price in Mountain View from Zillow (https://www.zillow.com/mountain-view-ca/home-values/#tt-zri) is $4,200 a month, that is a significant price cut regarding the “market rates” of 28%. But that is if they choose the 100% option. That will reduce the cash flow per unit on all units by 28%.
It would look like the 100% option will be a lot more costly than the 20% option Gary. The developers will do this math and choose the one with the lesser cash flow impact. They will want to take the choice that increases there cash flow by 16%. In effect, that will eliminate the 100% option in lieu of the 20% one. Gary, you are not really understanding the bill or you are misleading the public. You said:
“It would provide incentives – such as higher buildings and more density and no onsite parking – to include some units affordable to relatively well-off people. As to two other laws cited by THE BUSINESS MAN above, I will discuss them next time.”
My reporting above simply does not support this conclusion. Maybe you should do some math to evaluate you conclusions. I have proven that the developer’s choice will be to not avoid the 20% requirement. On top of that then there will be the other laws that will also apply regarding affordability as well.
@Gary
None of the SB 50 incentives (increased height, density, etc) would apply unless affordable housing is included in the project:
Project Size Inclusionary Requirement
21–200 units
15% lower income; or
8% very low income; or
6% extremely low income
201–350 units
17% lower income; or
10% very low income; or
8% extremely low income
351 or more units
25% lower income; or
15% very low income; or
11% extremely low income
Lower income is defined as 80% AMI (area mean income).
Very low income is defined as 50% AMI.
Extremely low income is defined as 30% AMI.
(A project of 11-20 units would require an in-lieu fee. There’s no affordability requirement on fewer than 10 units, but Mountain View’s BMR ordinance would likely apply here anyway.)
slight correction: AMI is “area median income”, not mean.
Gary, thanks to Jeff, I have some corrected information
Jeff, thanks let’s look at the real numbers then:
For a project were there is 21–200 units, where the median income in Mountain View is $120,351.
And lower income is based on 80% of the median income, and that 30% of that is the yearly rate of affordability that comes to ($120,351 * .8) * .3 = $28,884.24 or $2,407.02 a month. Given that the median rent in Mountain View is $4200 a month that is a discount of 43%.
And very low income is based on 50% of the median income, and that 30% of that is the yearly rate of affordability that comes to ($120,351 * .5) * .3 = $18,052.65 or $1,504.39 a month. Given that the median rent in Mountain View is $4,200 a month that is a discount of 64%.
And extremely low income is based on 30% of the median income, and that 30% of that is the yearly rate of affordability that comes to ($120,351 * .3) * .3 = $10,831.59 or $902.63 a month. Given that the median rent in Mountain View is $4,200 a month that is a discount of 79%.
Now let’s look at the total impact on the project of 40 units. Say 29% is price controlled that means that 71% would possibly get the median monthly rent rate which is $4,200, 15% would get $2,407.02, 8% would get $1,504.39 and 6% would get $902.63 then the monthly rent rate income would be $140,702.48 with SB50. Otherwise without SB50 the projects would charge market rate on all units, thus there is a loss of $27,297.52 a month, or $327,570.26 a year.
Now let’s look at the total impact on the project of 250 units. Say 33% is price controlled that means that 67% would possibly get the median monthly rent rate which is $4,200, 17% would get $2,407.02, 10% would get $1,504.39 and 8% would get $902.63 then the monthly rent rate income would be $861,460.69 with SB50. Otherwise without SB50 the projects would charge market rate on all units, thus there is a loss of $188,539.31 a month, or $2,262,471.75 a year.
Now let’s look at the total impact on the project of 400 units. Say 51% is price controlled that means that 49% would possibly get the median monthly rent rate which is $4,200, 25% would get $2,407.02, 15% would get $1,504.39 and 11% would get $902.63 then the monthly rent rate income would be $1,343,116.22 with SB50. Otherwise without SB50 the projects would charge market rate on all units, thus there is a loss of $546,883.79 a month, or $6,562,605.42 a year.
No wonder the cities are fighting back against SB50. The property values will be significantly hit if these price controls are put into effect. But the values are inflated because of the housing shortage anyway, and it needs to be corrected.
Jeff is the Google employee who wrote in support of the prior version of SB 50 last year. But good to have his input on the latest version. A couple of questions: (1) Is there anything in the latest version that requires any developer or other project applicant to build rental housing rather than ownership housing? (2) Does the latest version provide that housing built thereunder may have be subjected to local requirements such as the City of Mountain View’s BMR ordinance – or are the limited BMR provisions of SB 50 preemptive?
In response to Gary you said:
“Jeff is the Google employee who wrote in support of the prior version of SB 50 last year.”
Nice try to attempt to discredit information that hurts your position. You said:
“But good to have his input on the latest version. A couple of questions: (1) Is there anything in the latest version that requires any developer or other project applicant to build rental housing rather than ownership housing?”
Actually yes, the provisions apply to either rentals or ownership. That means that if you take the prices I described you get the following possible cost scenarios. These are calculations from the Citi home financing website found here (https://online.citi.com/US/JRS/portal/template.do?ID=mortgage_borrow_limit_calculator)
In the case of a 40 unit project. A monthly payment of a mortgage for regarding the previous post of $2,408 will result in a value of only $436,071 at 5% interest. A monthly payment of a mortgage of $1,504 will result in a value of only $272,363 at 5% interest. And a monthly payment of $902 a mortgage of $163,346 at 5% interest. However the cost of the median house in Mountain View is $1,719,536. That means the low income housing will sell at a discount of 75% of the value, the very low housing will sell for a discount of 84% the value, and the extreme low income will sell for a discount of 91% the value. Will any business take these kinds of loss? Thus it would be much more cost effective to do rentals given this situation. Maybe you should again do some math homework. You went on to say:
“(2) Does the latest version provide that housing built thereunder may have be subjected to local requirements such as the City of Mountain View’s BMR ordinance – or are the limited BMR provisions of SB 50 preemptive?”
Only where the number of units are below 20 will the City BMR laws apply. Otherwise, the SB50 will override the City. Given the nature of SB50, the likelihood of these projects to be less than 20 units is not very good. Unless the City decides to attempt to violate the Housing Accountability laws by intentionally underbuilding which is very easily proven with the new revisions.
@Gary
SB 50 doesn’t mandate that a developer must build rental housing instead of ownership housing. And I don’t see why it should. Its affordability requirements would apply to both rental and ownership housing, however. From section 65918.53:
(4) The affordability of units made affordable to meet the requirements of this subdivision shall be restricted by deed for a period of 55 years for rental units or 45 years for units offered for sale.
Regarding Mountain View’s BMR ordinance, whichever requirement is stronger (local ordinance or SB 50) would apply. SB 50 just sets a minimum baseline. Reference (also from section 65918.53):
65918.53. A residential development is not eligible for an equitable communities incentive pursuant to this chapter unless the residential development meets all of the following criteria:
(a) If the local government has adopted an inclusionary housing ordinance requiring that the development include a certain number of units affordable to households with incomes that do not exceed the limits for moderate income, lower income, very low income, or extremely low income specified in Sections 50079.5, 50093, 50105, and 50106 of the Health and Safety Code, and that ordinance requires that a new development include levels of affordable housing in excess of the requirements specified in paragraph (2), the residential development complies with that ordinance. The ordinance may provide alternative means of compliance that may include, but are not limited to, in-lieu fees, land dedication, offsite construction, or acquisition and rehabilitation of existing units.
(b) (1) If the local government has not adopted an inclusionary housing ordinance, as described in subdivision (a), the residential development includes an affordable housing contribution for households with incomes that do not exceed the limits for extremely low income, very low income, and low income specified in Sections 50093, 50105, and 50106 of the Health and Safety Code.
Neither of these have changed from last year’s version of SB 50.
One thing that is new is this section of 65918.53, which prioritizes some of the newly-built affordable housing produced by SB 50 to existing residents to help prevent displacement:
(c) Residents living within one-half mile of the development at time of application shall receive priority for the following:
(1) Forty percent of the affordable housing units in the development that are reserved for lower income households.
(2) Forty percent of the affordable housing units in the development that are reserved for very low income households.
(3) Forty percent of the affordable housing units in the development that are reserved for extremely low income households.
The January amendments have made the bill a bit hard to read, largely cause many parts were moved around. You can view today’s law as amended (i.e. what the bill would change in existing law) here, free from any intermediate amendments: https://leginfo.legislature.ca.gov/faces/billCompareClient.xhtml?bill_id=201920200SB50
So, no rental housing is required. None. Anyone who cannot qualify to buy is not helped – directly. Second, the language you cite about the role of a local BMR ordinance seems to apply to incentives – advantages beyond the basic giveaway to developers (or other project applicants) of high-density in single-family neighborhoods. Is that correct?
In response to Gary:
Are you the same Gary Kent that is a real estate agent that wrote the opinion article “Readers React: Save neighborhoods by opposing SB 50” found (https://www.sandiegouniontribune.com/opinion/letters-to-the-editor/story/2020-01-10/save-neighborhoods-by-opposing-sb-50-utak).
You said:
“So, no rental housing is required. None.”
Except for SB 330 that will require it if there is affordable housing being taken off-line in that location. Again you are trying to think too narrowly regarding the total new housing laws that already exist. You said:
“Anyone who cannot qualify to buy is not helped – directly.”
Except that if there are no buyers for the inclusionary ownerships like you suggest, they cannot be sold at market rate. And only those that meet the earnings standards of HUD can apply. Thus they may be left vacant and not get any buyers. Is that a good solution? You will wind up with as much as half a million dollars spent with no revenue. Thus that will not be a popular option for development in the real workd.
Also you are possibly going to encourage housing discrimination based on disparate impact. This occurs when housing provider’s use what is called “intent neutral” actions that result in discrimination based on the general rules of suspect classes. You are really not expecting us to think you want to encourage that illegal action? You said:
“Second, the language you cite about the role of a local BMR ordinance seems to apply to incentives – advantages beyond the basic giveaway to developers (or other project applicants) of high-density in single-family neighborhoods. Is that correct?”
That seems to be a stretch. It doesn’t look like that kind of action has been established yet. It may be situation that might result in some court action to determine it.
Gary,
Why are you impersonating another individual that is a registered user of this website? Perhaps because you are a sponsored sock puppet working an astroturfing campaign?
Also, you have been proven wrong regarding the content of SB50. I will be happy to provide the text again that is in the bill. It includes required below market housing because of other state laws. As well as adding more requirements within SB50.
What is the real situation is that you are advocating the real estate markets single family units. Perhaps you are one that makes a living off this, but you use your fictitious name to prevent disclosure of this conflict of interest. This inflated market due to the shortage of 3.5 million units as determined by the Legislative Analyst’s Office. Thus this critical shortage has caused an artificial inflated values of these units.
Simply yelling louder than others does not mean that your argument is sound. That is only an indication that you want to prevent the public from hearing information that is likely to disprove your claims. This is the “Trump” political strategy, get people to intimidate others by “filibustering” the discussion and distract the public regarding the issues.
Unfortunately, if no one else will counter the claims you make, then the public loses.
I am not impersonating a “BUSINESS MAN” or anyone else. SB 50, as last amended, requires no “affordable housing.” No other law you cited does either. When a density bonus is sought under some laws, some slightly “below-market” units can be required. Such laws do nothing for anyone who cannot afford to buy or rent at that (slightly) reduced level – except maybe to add to overall housing that could affect the overall market and, in theory, lead to lower housing prices and rents in the realm of TRICKLE DOWN ECONOMICS. If, though, big corporations continue to add jobs and import new workers to California, any such TRICKLE DOWN disappears. As to Senator Wiener’s particular new amendments to SB 50, create a link for us so they may be read and discussed precisely. Link the language Mr. “BUSINESS MAN.” Surely you have it. Law is language – not a news release.
And by the way, Mr. Business Man, pop over to the newest news article about the controlled meeting scheduled for State Senate candidates. I refer to you and Senator Wiener there too. Hard to keep track posting using a little cell phone.
Gary, your previous post was not registered, I an noticing 2 people posting under the name Gary thats all.
Gary, again you simply do not want to acknowledge that there are laws in place that will impact any other projects, they are:
You are nitpicking on the current bill. However that is a major mistake because there are concurrent laws that will require affordable or below market housing to be built in any new project.
The first law found under the legislature’s website (https://leginfo.legislature.ca.gov/faces/billCompareClient.xhtml?bill_id=201720180SB166)is SB 166 Enforceable since Jan. 2019 (2017): NO‐NET‐LOSS LAW STRENGTHENED FORTIFIED HOUSING ELEMENT SITE PRESERVATION REQUIREMENTS
OVERVIEW
The 2017 California legislative session yielded a “housing package” of 15 bills that significantly increased both the financing of affordable housing development and the obligation of local governments to plan, zone and approve affordable housing developments. This memorandum focuses on SB 166 (Skinner), a bill that substantially strengthens the No‐Net‐Loss Law’s1 obligations for jurisdictions to preserve sufficient sites to address the community’s identified need for lower‐income housing.2
SB 166 amends the No‐Net‐Loss Law to require that the land inventory and site identification programs in the housing element always include sufficient sites to accommodate the unmet RHNA. When a site identified in the housing element as available for the development of housing to accommodate the lower‐income portion of the RHNA is actually developed for a higher income group, the locality must either (1) identify and rezone if necessary an adequate substitute site or (2) demonstrate that the land inventory already contains an adequate substitute site.”
On top of that there is SB35 under the legislature’s website (https://leginfo.legislature.ca.gov/faces/billCompareClient.xhtml?bill_id=201720180SB35) Enforceable since Jan 2019 as I pointed out states:
““(B) The development is subject to a requirement mandating a minimum percentage of below market rate housing based on one of the following:
(i) The locality did not submit its latest production report to the department by the time period required by Section 65400, or that production report reflects that there were fewer units of above moderate-income housing approved than were required for the regional housing needs assessment cycle for that reporting period. In addition, if the project contains more than 10 units of housing, the project seeking approval dedicates a minimum of 10 percent of the total number of units to housing affordable to households making below 80 percent of the area median income. If the locality has adopted a local ordinance that requires that greater than 10 percent of the units be dedicated to housing affordable to households making below 80 percent of the area median income, that zoning ordinance applies.
(ii) The locality did not submit its latest production report to the department by the time period required by Section 65400, or that production report reflects that there were fewer units of housing affordable to households making below 80 percent of the area median income that were issued building permits than were required for the regional housing needs assessment cycle for that reporting period, AND THE PROJECT SEEKING APPROVAL DEDICATES 50 PERCENT OF THE TOTAL NUMBER OF UNITS TO HOUSING AFFORDABLE TO HOUSEHOLDS MAKING BELOW 80 PERCENT OF THE AREA MEDIAN INCOME, UNLESS THE LOCALITY HAS ADOPTED A LOCAL ORDINANCE THAT REQUIRES THAT GREATER THAN 50 PERCENT OF THE UNITS BE DEDICATED TO HOUSING AFFORDABLE TO HOUSEHOLDS MAKING BELOW 80 PERCENT OF THE AREA MEDIAN INCOME, IN WHICH CASE THAT ORDINANCE APPLIES.”
The other LAW is SB 540 found under the legislature’s website (https://leginfo.legislature.ca.gov/faces/billCompareClient.xhtml?bill_id=201720180SB540) Enforceable since Jan. 2019 Which states:
“(3) At least 30 PERCENT OF THE TOTAL UNITS CONSTRUCTED OR SUBSTANTIALLY REHABILITATED IN THE ZONE WILL BE SOLD OR RENTED TO PERSONS AND FAMILIES OF MODERATE INCOME, as defined by Section 50093 of the Health and Safety Code, or persons and families of middle income, as defined in Section 65008; AT LEAST 15 PERCENT OF THE TOTAL UNITS CONSTRUCTED OR SUBSTANTIALLY REHABILITATED IN THE ZONE WILL BE SOLD OR RENTED TO LOWER INCOME HOUSEHOLDS, as defined by Section 50079.5 of the Health and Safety Code; and AT LEAST 5 PERCENT OF THE TOTAL UNITS CONSTRUCTED OR SUBSTANTIALLY REHABILITATED IN THE ZONE WILL BE RESTRICTED FOR A TERM OF 55 YEARS FOR VERY LOW INCOME HOUSEHOLDS, as defined by Section 50105 of the Health and Safety Code. NO MORE THAN 50 PERCENT OF THE TOTAL UNITS CONSTRUCTED OR SUBSTANTIALLY REHABILITATED IN THE ZONE SHALL BE SOLD OR RENTED TO PERSONS AND FAMILIES OF ABOVE MODERATE INCOME.
The developer shall provide sufficient legal commitments to ensure continued availability of units for very low, low- moderate-, or middle-income households in accordance with the provisions of this subdivision for 55 years for rental units and 45 years for owner-occupied units.”
You claim there is the following:
“A quick look at SB 540 indicates that it allows a city to allow a developer to obtain project approval without doing the usually CEQA (ENVIRONMENTAL) review if some units affordable to middle-income families are included. That would not guarantee any “affordable” units in projects authorized by SB 50 (if it becomes law). SB 50 is about providing more nearby housing for well-paid corporate employees – current and planned. Any benefit to others would be trickle down.”
Again, you want the public to believe that SB50 is going to only provide housing for the “well-paid”. The fact is that you haven’t proven that the conditions I disclosed are not enforceable regarding new projects. As much as 50% of all new units rent or sale will be under price controls for as long as 45 to 55 years. No one can purchase a property under price controls and resell it or rerent it for “market-rate” until at least 45-55 years have transpired.
Unless you can demonstrate under the laws that my information is inaccurate, you’re simply making up issues.
Thanks for the link to proposed amendments to SB 50. The legislative analysis of the bill for the Senate Appropriations Committee (the bill’s next stop) confirms that SB 50 – if adopted as proposed – would not REQUIRE any below-market housing for either ownership or rental projects. It would provide incentives – such as higher buildings and more density and no onsite parking – to include some units affordable to relatively well-off people. As to two other laws cited by THE BUSINESS MAN above, I will discuss them next time.