While Sacramento’s legislative gears grind, transform and halt many bills proposed to combat the state’s affordable housing crisis, a Bay Area lawmaker’s initiatives have established increasing momentum.
Assemblyman David Chiu, D-San Francisco, authored two potentially impactful proposals aiming to address opposing ends of housing crunch by capping exorbitant rent hikes and facilitating affordable housing construction.
Assembly Bill 1482, aiming to establish a ceiling for allowable rent increases, and Assembly Bill 1763, proposing to loosen development regulations for affordable housing projects, both passed into the Senate, where they await hearings.
Chiu said he considers the initiatives, as well as other housing legislation he crafted or sponsored, potent tools for fighting the cost of living problems plaguing millions of Californians.
“I proposed a number of housing proposals to address the most intense housing crisis in our region’s, and our state’s, history,” he said.
Michael Lane, deputy director of Silicon Valley At Home and a board member with Housing Leadership Council of San Mateo County, lauded Chiu’s vision and leadership.
“Assemblymember David Chiu’s important bills, which we strongly support, will protect tenants from excessive rent increases that drive economic evictions and help produce more affordable housing by increasing the allowable building density,” he said in an email.
Chiu said the rent hike cap proposal is intended to fend off the threat of displacement for those who cannot afford an unanticipated and unjustified additional fee from their landlord.
“We need to do something because millions of tenants in California are one rent increase away from being forced out of their homes and being homeless, and we must act,” said Chiu.
The initiative is unpopular with the California Apartment Association though, according to a spokesman with the organization.
“Whenever rents are regulated by government, it’s rent control. Calling AB 1482 an anti-price gouging measure is a rebranding tactic to make a failed policy like rent control more politically palatable,” said Joshua Howard, senior vice president with the advocacy organization in email.
Under the proposal, landlords would be disallowed from asking for rent increases greater than the consumer price index plus 7% in one year. Chiu said initially he proposed a lower rate, but was persuaded to raise it higher following pushback from real estate and property management advocacy associations.
He noted the most recent rate is equivalent to a similar cap recently established in Oregon, which he considered a precedent for the viability of such a policy proposal. Howard though claimed the Oregon law has led to decreased investment in properties and fears the same would occur in California if Chiu’s effort is successful.
Chiu also said the rate assures that landlords will be able to continue operating without a threat to their bottom line, while setting a reasonable threshold for identifying predatory behavior.
“Our bill protects against the most egregious rent increases,” said Chiu.
The proposal would not apply to units constructed in the last decade, and is designed to sunset in three years, by which time Chiu is hopeful the housing market has cooled to a point at which such legislation is no longer necessary. It would also exempt property owners with 10 or fewer single-family homes.
Looking ahead to a series of Senate hearings on the bill, Chiu said he is optimistic the proposal will eventually continue to the desk of Gov. Gavin Newsom for approval.
“Anyone who knows anything about our housing crisis supports the idea of needing to do something in that area,” he said, regarding the rent-gouging proposal. “And the deep engagement of stakeholders is an indication of how seriously everyone is trying to find a solution.”
Chiu’s other battle in his war to drive the cost of living lower in California focuses on deregulating affordable housing developments by allowing taller and more dense projects.
The proposal, which advanced to the Senate, is intended to lower the cost of construction for developers building projects comprised entirely of affordable units, said Chiu. The legislation would also limit the authority of local officials to amend proposals targeting sites a short distance from public transit stops.
Legislation intended to limit local control traditionally has faced great opposition, most notably in the case of state Sen. Scott Wiener’s Senate Bill 50, which partially aimed to streamline housing development through bypassing city councils. Wiener’s bill stalled earlier this year, but not before riling critics who claimed his effort would diminish the quality of life across the state.
Chiu meanwhile is optimistic his bill will not face such backlash, largely because the projects which would benefit from his proposal are rare in a building market constantly growing more expensive.
Because affordable housing is difficult for developers to finance, Chiu said his proposal is needed to generate the most units possible each time a building breaks ground.
“Existing zoning is often too restrictive for affordable housing to make pencil out,” he said.
Considering the potential benefits offered, and lack of critics seeking to stand in the way of affordable housing development, Chiu said he is optimistic about the viability of the proposal.
“We are very hopeful about this bill,” he said.
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