Commentary: SB 9 Moves Closer, but the Debate Continues

By David M. Greenwald
Executive Editor

Sacramento, CA – SB 9 passed the Assembly Appropriations Committee on a 12-1 vote on Thursday.  It is moving toward a showdown now.  But the debate is not subsiding.

In a release this week, the League of California Cities warned: “Current legislative efforts in Sacramento, like SB 9 (Atkins), not only threaten the ability of local governments to plan for the type of housing that’s needed in their communities, but also disregard local democracy by ignoring the voices of local leaders and residents.”

They add, “SB 9 would allow developers to build up to four housing units on a single parcel in residential neighborhoods traditionally zoned for single-family homes. While high-density housing is part of the solution, SB 9 goes about it in the worst way. It is a top-down, one-size-fits-all approach to land use policy that fails to recognize or incorporate local flexibility, decision-making, and community input.”

David Garcia, policy director at the Terner Center for Housing Innovation at UC Berkeley, whose organization studied the impact of SB 9, doesn’t believe that SB 9 will change people’s neighborhoods in the way they think or fear.

In an op-ed in the Bee on Thursday, he notes, “A recent analysis by UC Berkeley found that SB 9 could play a role in the state’s overall housing solution, but financial and geographic factors will limit its impact to just a small percentage of the state’s single-family homes.”

While the bill “has attracted fierce opposition in recent months,” he argues, “Research has shown, however, that the changes proposed in SB 9 would not lead to the wholesale changes that opponents fear.”

The findings, again from the Berkeley study, show that “relatively few of the state’s roughly 7.5 million single-family parcels would see any new home construction whatsoever as a result of SB 9. The bill would only enable about 110,000 new parcels to feasibly add new housing — just 1.5% of all single-family parcels statewide.”

“Why are so few single-family lots impacted?” Garcia asks.  “Construction costs are exceedingly high.”

This is a point that we keep making over and over again.

Why can’t we build more affordable housing in downtown infill?  Construction costs.

Why can’t we build the housing we need for the next RHNA cycle through redevelopment?  Construction costs.

Garcia adds: “Even today’s skyrocketing rents and home prices are not enough to cover the development costs on most single-family parcels across the state, whether the new housing is a single-family home, a duplex, two single-family homes or any other housing types considered in our model.”

We keep seeing readers arguing—would you want someone building a duplex on the lot next door?

But what the studies show: “Concerns of widespread demolition of existing single-family homes are unsubstantiated. For 97% of single-family homes in California, demolition would not be financially advantageous.”

That means that there is not really an incentive to do that.  But Garcia goes further.

He points out that, even in cases where this type of redevelopment does occur, “the most likely path to add units is dividing an existing home into two.”

In other words, you won’t see a lot of split lots become fourplexes, in part because the “lots are simply too small for multiple homes.”  Even in a neighborhood like mine with large houses, you could create a duplex, but splitting the lot is probably not feasible.  Plus, why would you go through the expense of doing that when you can sell the base home for over $1 million without having to demolish and rebuild?

Garcia does think, despite these limitations, that there will be potential benefits.

He writes: “SB 9 still offers potential benefits, particularly in incrementally expanding wealth building and homeownership opportunities. While recent legislation has made it possible for homeowners to add an accessory dwelling unit (ADU), our research has found that the benefits of these policies largely go to affluent homeowners who can leverage significant equity or cash savings to build an ADU, financing options that are not available to low- and moderate-income homeowners.”

He concludes: “SB 9 is a modest housing production bill. Certainly, new homes will be built that would not otherwise be allowed under current zoning, but the scale of this development is not enough to solve California’s overall housing deficit. However, while other strategies are needed to adequately address our housing crisis — such as lowering building costs and focusing resources on affordable housing — SB 9 can be an important piece of the solution.”

That’s my view as well.  SB 9 is not really a game changer.  Not in a good way or a bad way.