Senate Standing Committee on Housing

I will call to order the Senate Committee on Housing. As you can see, we currently do not have a quorum. Thank you, Senator Seyarto, for being here. We really appreciate your participation. We will establish quorum as soon as a few more Members come, but we will begin as a subcommitee. The Senate continues to welcome public, in person, and teleconference participation for individuals wishing to provide public comment today, the participant number is 877-226-8163. The access code is 736-2834.

We're, of course, holding our Committee hearing here in the O Street building. I will announce to TV for all staff, if you can get your Members down, at least, to establish quorum, that would be fantastic. I want to make a few announcements. First of all, SB 352, which is item 14 by Senator Padilla, has been pulled, and we will be hearing it in our next Committee hearing next week.

So we have 15 bills on today's agenda with one on consent. The consent item is file item 12, SB 91 by Senator Umberg. In addition, SB 450 by Senator Atkins, the pro tem. I will be presenting that on her behalf. That is file item 1. Before we hear presentation. Oh, actually, no, we can't establish a quorum, so we will now proceed as a subcommitee. And the first item that we are going to hear is item number 4, SB 469 by Senator Allen.

Senator Allen. Senator, welcome to the Housing Committee.

Well, thank you so much, Mr. Chair.

And we'll get his microphone turned on. Okay, now it's on.

All right. Thank you, Mr. Chair. So, as you know very well, Mr. Chair, Article 34 of the Constitution is a relic of the pre civil rights era that's thought to limit the development of affordable housing and serve as a de facto tool for segregation. And the LA Times has written extensively about this. So while the deeply problematic nature of the original intent demands action through our efforts, and that's why we're doing SCA two, which, of course, was a bipartisan effort to remove Article 34 from the Constitution that enjoys widespread support.

We're going to be putting it on, it's on the ballot next year. One unintended interpretation of Article 34 has placed the state in a legal gray area that continues to thwart the affordable housing goals that I know this committee believes in so deeply. So Article 34 requires local voter approval of, quote, any low rent housing project that is, quote, developed, constructed, or acquired in any manner by any state body, state public body. Now, you go back.

Article 34 was not intended to cover affordable housing that receives state funding, but is developed by private entities such as nonprofit affordable housing developers. And yet, out of an abundance of caution, and I understand how these things work, the state has required applicants for some funding sources to demonstrate Article 34 compliance before developments may proceed. And this has added a whole set of unnecessary cost delays and uncertainty to the housing projects that California desperately needs to address our affordable housing challenges. So article 34 did grant the Legislature the power to enact laws to implement it.

And it's a power the Legislature has exercised numerous times over the decades that it followed. In recent years, as the states invested in programs administered by HCD, the Legislature has used its authority under Article 34 to make clear that an affordable housing developer's receipt of funds from some crucial programs, like the Home Key program, housing Accelerator program, portfolio restructuring program, veterans housing and homeless eviction, sorry, the Veterans Housing and Homelessness Prevention program, do not trigger a local Article 34 election, for example.

So this Bill, SB 469, underscores last year's strong bipartisan support for SB 2, and it exercises the state's authority to bring consistency to all state affordable housing funding programs. It clarifies that a housing development that receives a loan or a grant from HCD or a reservation of low income housing tax credits from the state's tax credit allocation Committee is not a low rent housing project developed, constructed or acquired in any manner by any state public body as defined by Article 34.

So much has happened since the passage of Article 34. Obviously, back in the while no one person is to blame for its impact, we in the Legislature have the duty and responsibility to try to find some solutions to our current housing crisis using every tool that we have in the box. And this bill does just that by anyway, I appreciate your consideration. I appreciate the good work of the Committee in analyzing the bill, and joining me to testify in support today are Mark Stivers from the California Housing Partnership and also Brian Augusta from the California Rural Legal Assistance Foundation.

Mr. Augusta, you may proceed.

Thank you. Good morning, or good afternoon, Chair and Members Brian Augusta on behalf of the California Rural Legal Assistance foundation, on behalf of our low income clients that live in rural areas, we are pleased to sponsor this bill. The cost and uncertainty of an Article 34 election, which is one solution to the barriers that Article 34 presents, is a barrier in rural areas because of the cost and the uncertainty of that.

And so for development in rural areas, we're often navigating around those restrictions that make it more complex and costly to produce affordable housing that serves our clients. This common sense approach is consistent with what the Legislature has done over several years now to remove those barriers. And so while we work, as the author and chair have been doing, to permanently repeal Article 34, this bill will help remove those barriers in the short term. And for those reasons, we urge and aye vote.

Mark Stivers with the California Housing Partnership and my colleagues work on the financing of about 200 affordable housing developments per year. We have to deal with the ramifications of trying to comply with Article 34 in all these situations when, even when state funding is approved. I've been in the position of administering state programs, and I've also seen the mental gymnastics that we go through and the added time and lawyer cost that is involved in terms of trying to make sure developments are complying with Article 34. We have used this measure of exempting out programs that are just providing financing on a couple of occasions, as the Senator mentioned, and they have worked and it has not been challenged, and we think that this is the way to go. So thank you very much for your support. We're proud to co sponsor.

Marina Wiant with the California Housing Consortium in support.

Thank you very much. Is there any additional support in the hearing room?

Matthew with inner city Law center in support.

Anyone else present here? Okay. Seeing none, is there any opposition to SB 469 in the hearing room? Seeing none, we'll go to the phone lines. Will the moderator please queue up any support or opposition on the phone lines?

Of course. Ladies and gentlemen, if you wish to make a comment in support or opposition, please press 1 and 0. You will be given your line number. Again, If you wish to make a comment in support or opposition, please press 1 then 0. We'll go to line 72, please go ahead.

Yes, good afternoon. This is Ralph Sonnenfeld calling in strong support on behalf of YIMBY action and our dozen or so chapters and partners in California. Thank You.

Next, we'll go to line 71. Please go ahead.

Yes, this is Michael Soloff calling in on behalf of the Santa Monica Democratic Club and strong support of this measure.

There's currently no one else in the queue.

Thank you very much. We'll bring it back to the Committee. Senator Seyarto, Senator Blakespear, for any comment. Questions. Senator Blakespear.

I strongly support this, Senator, and I'm grateful that you brought it forward. Thank you.

Great. I just also, as Senator Allen, you and I have been partners on this endeavor for a few years now, and it was really exciting at the very last night of session last year to place Article 34 repeal on the ballot. Article 34 is an absolute scar on the California Constitution. It is harmful and humiliating that in 2023, we have this provision in our constitution that was designed to keep our communities segregated, and it's long, long past due to strip it out.

And I think it's fantastic that we have a broad coalition ranging from advocates for tenants and affordable housing and the realtors, and we got overwhelming, almost unanimous bipartisan support last year. It's really inspiring, and I look forward to getting it out of the constitution, but this is a great complement to that, and I really appreciate you bringing this forward. I'm proud to be a joint author. We will, of course, take a motion once we have a quorum, and you may close.

Appreciate your comments. Great deal. This is an important step in helping to address this real inadequacy that I think has become so clear under the state's current posture with regards to their interpretation. It's just that they're taking a cautious approach. We're going to get it addressed with this bill, and I just appreciate an eye vote.

Thank you very much. And again, we'll take up a motion when we have a quorum. Thank you. We have another author, Mr. Archuleta, item number two, SB 356.

Well, thank you, Mr. Chair and Committee Members. Thank you so very much. Today I would like to, first off, by pointing out that I have and will accept the amendments. And today I'm presenting Senate Bill 356 to restore funding to modernize the Code Enforcement Grant Incentive Program and the Community Code Enforcement Incentive Program to support healthy and safe housing.

Over 20 years ago, the state implemented these two programs to support local efforts to identify and fix existing housing before problems get so severe they are lost to the market. Funding for these programs was a victim of budget cuts during the Great Recession. Senate Bill 356 would increase the maximum grant to a single municipality under the Code Enforcement Grant Incentive Program from 1 million to 2 million and require the department to adjust that amount for inflation at least once every five years.

The bill would change the local match requirement under this program to require a recipient city or municipality to match 35% of the funds awarded over three years. This will allow local governments to better budget for the grant. And under current law, the local match goes from 25% up to 75% in the final year. The bill would also increase the maximum grant under the Community Code Incentive Program, which is a second program, from 450,000 to 2 million, and adjust for inflation.

With these grants, local governments will be able to creatively and effectively address code enforcement issues in their communities. California is investing hundreds of millions of dollars to support the construction of new housing units to help alleviate the housing crisis. This bill should go hand in hand. However, very little is invested in housing code enforcement to ensure the state's existing housing stock is not lost due to neglect and disrepair. The loss of existing housing undermines the gains of our massive investments in new construction.

This bill has no opposition and is supported by a broad coalition of groups who support healthy and safe housing. And with me today to testify and provide technical assistance are Brandon Kitagawa and on behalf of Regional Asthma and Prevention, as well as Larry Brooks, on behalf of the California Association of Code Enforcement Officers. And I respectfully ask her aye vote, and I thank you.

You may proceed.

Great. Good afternoon, Chair and Members. My name is Brandon Kitagawa. I'm with Regional Asthma Management and Prevention. We're a part of the Public Health Institute. Our mission is to reduce the burden of asthma, particularly in communities most impacted by the disease.

Our work to reduce exposure to environmental asthma triggers has led us to partner with tenants rights organizations, public health agencies, and local code enforcement to address unhealthy, substandard conditions such as pest infestations and mold, which can exacerbate and sometimes cause asthma, as well as other health conditions. Unhealthy housing is not uncommon, unfortunately, in the state. According to 2021 data from the American Housing Survey, over 1 million homes in California have signs of mice. Over 1.4 million report having cockroaches.

1.5 million have identified plumbing or other water leaks, which contribute to over 350,000 households having mold. According to the same data, these conditions are substantially more common in rental housing, with renters two and a half more times likely to have cockroaches in their homes or live with mold. These disparities are particularly concerning given that they're given their impacts on communities of color, where a significant majority of households are renters.

Existing state and local law requires landlords to adequately maintain their rental housing while designating local code enforcement agencies responsible for enforcing these health and safety standards. In our work with code enforcement, we often share model policies we see across the state, but often hear agencies say that they can't try these new things because they don't have the resources to do it.

When we learned about these grant programs, we thought it was a great opportunity to update them and restore funding so that they can provide the seed money to help jurisdictions better address their housing stock. So we respectfully ask for your aye vote.

Good afternoon, honorable Committee Members. My name is Larry Brooks, board member of California Association of Code Enforcement, Director of Alameda County Healthy Homes Department, and previously the Deputy Chief of Code Enforcement for Sacramento County, and previous Manager of Code Enforcement for the City of West Sacramento. I come to you to urge your support for Senate Bill 356, often referred to as the Code Enforcement Incentive Grant and Community Code Enforcement Pilot Program Grant.

Having received one of these grants while working for Sacramento County, I can attest to how effective these grants can be in helping code enforcement programs succeed in preserving safe and healthy affordable housing. Unfortunately, in the 20 plus years since the last round of these grants existed, demands on code enforcement programs have outpaced the resources that many jurisdictions can provide them, as some cities and counties have had to create or expand regulatory activities such as cannabis massage parlors, homeless camps, downtown, nightlife, entertainment venues.

On top of their traditional code enforcement activities like land use, illegal dumping, animal and vehicle control, many code enforcement officers are left strapped to address housing preservation issues through training, modernization, and innovation. Just as the original grants brought many of us from using clipboards to laptop computers, polaroids to smartphones with digital cameras, these grants could help some code enforcement programs leap forward in addressing many healthy housing issues historically overlooked by many building code regulators, such as mold, asbestos, and lead paint hazards. Therefore, for these and many other reasons, that time does not allow me to explain to you, I urge you to vote aye on Senate Bill 356.

Thank you very much. Is there any additional support in the hearing room? Please come forward.

Good afternoon, Chair and Members. Brady Guertin on behalf of the California Building Officials in strong support of this bill. Thank you.

Good afternoon. Cynthia Castillo on behalf of Western Center on Law and Poverty in support.

Any additional support in the hearing room? Okay, is there any opposition in the hearing room? Any opposition? Seeing none, we'll go to the phone lines. Mr. Moderator, will you please queue up any telephonic testimony?

Of course. Ladies and gentlemen, once again, if you wish to speak in support or opposition, please press 1, then 0. There's currently no one queuing up.

Okay, we'll bring it back to the Committee. Colleagues, any questions or comments on SB 356? Okay. Seeing none. Mr. Archuleta, you may close.

I urge you, and I thank you for an aye vote. Thank you very much.

Thank you. Thank you. Once we have a quorum, we'll take a motion and we'll vote. So thank you. Okay, I see Mr. Portantino here for item number three, SB 834. Welcome.

Thank you. Mr. Chair and Members, SB 834 proposes to place a $25 billion voter approved General obligation bond on the next statewide General election ballot to finance home ownership opportunities and promote new home construction Senators homeownership benefits are indisputable and lead to measurable improvements in health, education and security. Obviously, escalating home prices, severe production shortage and generational barriers caused by systemic issues and inequalities are squeezing many aspiring homeowners out of the market. Renters of all income levels, but especially those of low and moderate income, view homeownership.

Frankly, some of them view it as an unattainable goal. We have a responsibility to create more opportunities for first time and often left behind homebuyers to purchase a home, thrive in the middle class and build generational wealth. This cannot be accomplished without addressing the severe lack of housing production that is fueling much of our crisis. SB 834 will address housing production by increased home ownership.

The Bill uses bond proceeds to generated by the measure to create two unique financing programs, one to provide down payment assistance to homebuyers and another to provide infrastructure loans for upfront construction costs. Let me say that again, we would be building more and then helping people afford those new homes. Importantly, SB, this Bill proposes use investor money to build new housing, not taxpayer money, and use the bond funds insured by the program is backed by the full faith and credit of the state.

So we're going to create this program. We're going to use our own proceeds. There's nothing in the law that says we have to make a profit so we can use this to help build more and help more people buy.

With that, I respectfully ask for an aye vote and we have representatives from the state building and Construction Trades Council, I think, who are going to do a me too, and so would respectfully ask for an aye vote when you have a quorum and when you're ready to do that.

Thank you very much. Any support testimony.

State Building and Construction Trades Council appreciate the hearing today. Would like to thank the author for bringing this Bill forward. This Bill provides mortgage assistance, new home construction, pre development work and middle class wages and benefits so that workers building the new housing can afford to buy one. This Bill will also make the dream of owning a home more attainable, more people at no cost to the state, who will otherwise be trapped in a vicious cycle of renting. For these reasons, we ask for your aye vote. Thank you very much.

Thank you very much. Additional support.

Jennifer Svec on behalf of the California Association of Realtors, we're here in an amend support position currently, but we are working collectively with the author and his staff to facilitate technical improvements in the Bill to ensure that it operates in the way that is best available for use within the State of California, and we look forward to continuing our efforts with the author. Thank you.

Mr. Chairman and Member Scott Wetch, on behalf of the California State Association of Electrical Workers, the California State Pipe Trades Council, and the Western States Council of Sheet Metal Workers in support. Thank you.

Thank you. Any additional support in the hearing room? Saying none. Any opposition in the hearing? Yes. Please come forward. If you're opposed, please turn the microphone on. Thank you.

Mark Stivers with the California Housing Partnership. And we are opposed unless amended to one particular provision of the Bill. There are a couple of places where it sets a lower affordability threshold than is currently exists in SB 35 or in local inclusionary ordinances. So we'd like to work with the author on that.

And then just more broadly, we do have some concerns about doing a $25 billion housing bond that is solely focused on homeownership. We support homeownership, but we would like to see a bond that's more broadly based on homeownership and rental as we have done in the past. Thank you.

Cynthia Castillo, on behalf of Western Center on Poverty, respectfully opposed, unless amended.

Marina Wyatt with the California Housing Consortium, respectfully opposed, unless amended for the reasons stated.

Any additional opposition? Seeing none. We'll go to the phone lines. Please queue up both support and opposition, telephonically, of course. And if we wish to queue up to make a comment, support for opposition, please. Someone has queued up one moment while they're giving their line number, please go ahead.

Sylvia Solis Shaw here on behalf of the California Faculty Association, in support. Thank you.

There's currently no one else in the. Okay, thank you very much. We'll bring it back to the Committee. Colleagues, any questions or comments? Senator Caballero?

Thank you very much, Mr. Chair. First, let me thank the author for proposing this Bill. There's no question that we need to use bond funds in order to be able to do constructions. Let me give you my concerns. I'm going to support the Bill today, but I do have some concerns. They've been mentioned by some of the opposition. One is the affordability provisions in SB 35, as well as local inclusionary ordinances.

But the other thing about it that concerns me is that we put out $500 million this past year in the budget for a first time home buyers program through Calhfa, and they released 300 million of it, or close to, I think it's 288,000,000 in change, and it went within 11 days. And I've been asking for information as to what cities or what regions benefited because when we put it in the budget.

I asked if Calhfa would do some workshops in my communities to advise people how to access the money and how they should prepare themselves to be able to access resources. And the communities have a high second language rate. In other words, English is not their first language. Their economies are usually cash economies, not built on credit and maintaining good credit, and they're Low income. The housing stock is much more affordable than in some of the urbanized regions. And yet the money's gone. Poof.

It's gone. My vision is that none of the first time homebuyers money will ever get out if it's a first come, first serve basis, because sophisticated, educated communities tend to get in line much faster and to utilize that. So, having said that, I'd like there to be a carve out or a set aside or some recognition that disadvantaged communities have a hard time accessing some of these resources.

Number one, and number two is if you do it to 180% of the median income, a snapshot of my region, it's probably been 15 years ago now, but our median income used to be about 48,50,000, and we were always trying to get affordability to 40% to 60% of the median income. San Jose, which is 1 hour away from the Salinas Valley, had a median income of about $110,000.

So they were trying to reach up to 120% of the median income and would subsidize up to 120 income of 100 and 2130 $1000. My point about that is that if you were subsidizing in my community, you'd be subsidized only up to about $36,000 if you were earning $36,000 or less, as opposed to individual, so you don't get much value for your money if you have to subsidize a home that costs multiple millions of dollars.

I'm not saying we don't do it, but I just think that there has to be some equity and I'm really concerned. So I'm going to support you, Bill, today, but I do want to raise those issues. And when it comes to the floor, if it looks exactly the same, I may not.

You may.

So, two things. One, we have the benefit of that 500 $1.0 million investment to see what worked and what didn't work and how it was implemented. So I think the lessons that you're outlining, I want to try to incorporate how to make this better. That's one. So we have a blueprint of what works and what doesn't work. And two, obviously, $25 billion is a lot bigger than 500 million.

And so we have, in essence, a bigger pot to where we can try to accommodate the different regions of the state more equitably. So completely and totally open to working with you on trying to figure out how to apply it in a better way, because you're right. We want to make sure that we're helping all of California, not just one particular part of California, and doing it fairly.

Thank you. I appreciate that.

Absolutely. Any other questions or comments? Senator Blakespear.

Thank you I'll be supporting this Bill today as well. But I just wanted to ask you two questions. So the first is that this Bill is identical to SB 1457. And I just want from last year. So I wanted to hear why you think it might meet a different fate.

For the risk of insulting Mr. Hertzberg, better author.

Okay. If that's the answer, then I accept that answer. Okay. Any other substitute? Okay.

I knew that would go over well.

I'm also concerned about the lack of rental housing and the reality that such a large bond would crowd out other types of bonds for rental housing. And I just wanted to hear any response to that.

So that's a philosophical question, which, obviously, taking the input of the Committee and others seriously, I mean, we've done so much over the past decade on rental housing, but not a lot on first time home buyers. And I just want to make sure that the sociology of California, when I talk to young families, first generation Californians, they have this dream of home ownership, and I want to make sure that we have policies in place that help us meet that dream.

And so I hear that criticism, and obviously, I know the chair has worked significantly on numerous bills to create more housing stock of all types. But I just wanted to really emphasize the importance of this home ownership piece and make sure that in the sociology of housing, we give it as much focus as possible.

Okay? Thank you. And then just my last point is, I am supportive of the variety of inclusionary ordinance percentages that lead to more affordable housing. And I think cities, there are some cities who might try to set them too high to prevent any type of housing to be built, but in reality, that is challenged at the HCD level and also potentially in court. And so higher inclusionary percentages do result in more deed restricted affordable units, which I think is a good thing.

So just the fact that your Bill would override local ordinances that have higher inclusionary percentages, that was a bit of a concern to me as well. So I just want to flag that.

And that's one of the things that we'll be discussing as the Bill moves forward.

Okay, thank you.

As the better author.

Any other questions or comments? Okay, so I just want to make a few comments. I'm supporting the Bill today with some reservations. And this Bill, of course, was proposed by Senator Herzberg was the last year or the year before. Whenever. It was two years ago. I think it was two years. I think it was a two. Yeah. And so I do have some concerns about using bond money and having a bond for homeownership. Obviously, I'm not categorically opposed to it.

I wouldn't be supporting the Bill if I were. But it does raise some questions for me, and I think as this moves forward, it's something to be considered. Typically, our housing subsidies have really focused more on rental and on folks who may not be in a position to be in a homeownership situation, but need housing. Also, I want to thank you for keeping all of the.

We worked with Senator Herzberg to make a number of amendments to the Bill to make it more consistent with California housing policy, to put strong anti sprawl limitations in the Bill, to make sure that it includes not just single family homes, but townhomes and condos, because there are a lot of different forms of home ownership. And also, and this was not my Amendment, Senator Hertzberg on his own, and you've kept. This includes SB 35 streamlining in the build.

And I want to just thank you for embracing SB 35, which I think will help make this bond, if it is successful, much more successful by getting. You want this housing to be built quickly, as do I, if this passes and this will help. As noted in the analysis, I do have a concern that I think others share about. For the first time ever, as far as I'm aware, this would attach a skilled workforce to public housing money. That's, to my knowledge, not been done before.

Prevailing wage has long been attached to certain affordable housing funding streams. But never skilled workforce, of course, is the broader conversation we're having in the capital, because, unfortunately, I would love for the entire residential construction workforce to be unionized. It's not even 10%. It's less than 10%. The vast majority of residential construction workers are not in unions. I want that to change. I want that 9% to become, if not 100%, then close to it. But we're not there.

And so I do have concerns about this provision, and we've explained in the analysis why and what we recommend. However, I typically, in this Committee, do not try to dictate to authors what labor protections to put in their legislation. So I defer to you in making that choice while just expressing that point. So with that, I'll be voting for this today. We do not yet have a quorum, and when we do, we will entertain a motion and take a vote.

Thank you.

And you may close when appropriate.

I respectfully ask for an aye vote.

Thank you very much, Senator Porntino. Yeah, so, Senator Blakespear, would you like to? We will call item number--Senator Blakespear has two. Item eight, SB seven, we'll start with. And then from there go to item nine, SB 482.

Well, thank you, Chair and colleagues, and the Committee, for their work on the analysis and amendment suggestions. I just want to say that I'm happy to be here at my First Committee on SB 7, the Housing Committee. And this bill, the genesis of it, was my experience in local government as a mayor of a city, and also running the Subcommitee for the COG that distributed the RHNA allocations to cities, and watching that process over multiple years.

So I will start by saying I have accepted the amendments that are proposed as described on page nine, comment 10 of the analysis, and my staff and I are continuing to explore the implications of the remaining proposed amendments with our sponsors. So SB 7 essentially seeks to mandate that local jurisdictions meet the housing needs of their homeless populations. This bill adds the category of homelessness to RHNA. The premise of RHNA is that every city and county is obligated to plan for housing at all income levels.

There are currently five income categories which start at above moderate income and go to extremely low income. But critically, there is no requirement for cities and counties to plan for the housing of their homeless population specifically. While we have many federal, state, and philanthropically funded programs that help our unsheltered neighbors, we also have the cold, hard facts that homelessness continues to get worse in this state every month, including within the shadow of the capital of the fourth largest economy in the world, right here in Sacramento.

So we are simply stated, not keeping up with the need, and we are not working systemically toward getting people out of encampments and into homes. And the state has not provided an obligation for cities and counties to do this. So it is currently discretionary.

And just as an example, in the San Diego Union Tribune Newspaper today, an article above the fold on the first page states that in North San Diego County, which is the area that I represent, the point in time count indicated--that the point in time count is a well recognized undercount of homelessness--but indicated that there are 2,000 unsheltered people in north San Diego County and there are a total of 150 shelter beds.

Now, this is not a statistic that's changing: 2,000 homeless people, 150 shelter beds. So candidly, every city wants another city, or better yet, the county, to manage the homelessness problem. A city's decision to build a shelter, or to find a location for a safe parking or safe camping program, or to provide rapid rehousing or to permit a single room occupancy hotel is 100% discretionary. This bill would add homeless housing planning to the RHNA process so that providing for homeless residents is not discretionary.

The bill would also establish the Homeless Housing Obligation Fund, which may be renamed and may also be subsumed under a different fund that would enable local public agencies and nonprofits to access the funding to meet their obligations through a wide range of activities, including motel and hotel conversions, affordable housing preservation, permanent housing construction, rental assistance, and rapid rehousing, among others. This bill is still a work in progress as my staff sponsors and I continue to research and refine this bill to achieve the goals.

And I would like to thank the Committee again for the research assistance and analysis that has been provided to help us strengthen this legislation. I hope this bill proceeds today, and should it, I will continue to work with the Committee and all of you individually to amend it into its best possible form. So with me in support are Mahdi Manji and Deon Turner from the Inner City Law Center.

Welcome.

Thank you. Good afternoon, Chairman, Members. My name is Deon Turner with Inner City Law Center. We're proud to sponsor Senate Bill 7. Inner City Law Center is Skid Row's Pro Bono legal services' provider. Every day, we help people who are homeless or at the precipice of becoming homeless, find and secure housing through free legal services. SB Seven will ensure that every locality is required to build housing for residents experiencing homelessness within their jurisdiction.

Every locality in California is either home or a place of work for low income Californians. The pandemic has shown us that our essential workers are the heart of California's economy. Nevertheless, low income Californians are the most likely to be rent burdened and fall through the homelessness cracks. A 2022 report from the California Department of Housing and Community Development found that we need to build 1.2 million affordable homes over the next decade to meet our housing goals.

LA County alone is short over 500,000 homes that are affordable to lower income households. An economic roundtable study in 2018 found that almost 600,000 LA County residents are in poverty and spend 90% or more of their income on housing. When folks are spending drastic amount of income on housing, they are one parking ticket away, one medical bill or mishap from falling into the spiral of homelessness.

A 2020 USC study found that three-fourths of LA households are rent burdened, spending over 30% of household income on rent and utilities, and half being severely burdened, spending over 50% of their income on rent and utilities. Almost half delayed their bill payments or took on additional debt just to make rent. Ending homelessness will require California to significantly scale the production and funding of affordable housing. We must move rapidly to provide affordable housing to our unhoused neighbors living on the street and struggling families alike.

SB Seven requires localities to provide sufficient affordable housing to meet the needs of all their unhoused residents. SB Seven introduces a variety of means to accomplish affordable housing goals, including master leasing, the provision of rental subsidies, hotel and motel conversions, and building new affordable housing. In addition, SB Seven creates a fund to support cities in meeting the needs of their unhoused residents.

Should a locality fail to meet their published goals, SB seven allows a diverse range of housing modalities to be developed through a streamlined process, and for these reasons, we respectfully urge an aye vote on SB seven.

Thank you very much. Is there any additional support? Public comment in the hearing room? Please come forward.

Andrew Dawson with the California Housing Partnership in support.

Welcome back to the Committee.

I'm Amber Lee Leslie with Housing California and also on behalf of CSH. We support in concept and really appreciate the author and staff for working through some additional amendments. Thank you.

Any additional support? Public comments? Maybe, no? Okay, any opposition in the hearing room please come forward.

Elizabeth Elliott, Northern Circle Indian Housing Authority. And we stand in opposition unless there's an amendment to include tribal nations in this bill. Thank you.

Thank you.

Mr. Chair and members, Sylvio Ferrari, on behalf of the California Building Industry Association, and apologies. We are late opposition as early as yesterday, and we've communicated that with the author. We do have a meeting coming up, so we're looking forward to that. I think our view right now is that there are ample opportunities in existing law to do the analysis and better plan. So where that's deficient. We're looking forward to having that conversation. Thank you.

Next, Speaker

Ben Triffo at the league of California Cities. We have some concerns with the most recent amendments to SB 7. However, we appreciate the recognition for the need for ongoing funding to address the housing and homelessness crisis. The board will be working through office. Thank you.

Thank you. Any additional opposition in the hearing room, seeing none, will go to the phone lines. Will the moderator please queue up both support and opposition?

Of course. Ladies and gentlemen, if you wish to speak or opposition, please press 1-0. Going to line 72. Go ahead, 72. Your line is open.

Yes, this is Ralph Sonnenfeld calling on behalf of YIMBY Law and YIMBY action in support of SB 7. Thank you.

No one else in the queue.

Okay, we'll bring it back to the Committee. Colleagues, any questions or comments for Senator Blakespear? Yes, Senator Sayarto.

Well, thank you. I'm kind of curious about the cities you represent and I represent, and all of us have these cities, and I keep reading, no registered opposition. But all I hear from these cities is that they oppose this. Have you had conversations with the communities that you represent regarding this bill and where they stand on it? Because I know they all have concerns about local control. I know there's issues about the point in time counts.

Previously, the point in time counts were meant as a tool for cities to develop, to kind of know where they're at, as far as the homeless populations that are in their communities. If we turn it into something that requires them to do unfunded mandates, then it turns into something that is ripe for manipulation, either by physical manipulation, not having anybody.

When you're doing your point in time count, all of a sudden there's mass migration from one city to another with homeless people, and so one city winds up with none and the other city winds up with too many. So I'm kind of curious how this bill proposes to control that. And I think there's a lot of cities that have concerns about this. Some of them are probably more able to or more susceptible, should I say, to that kind of movement of populations than others are?

Yes. Well, thank you for the questions. So the point and time count numbers are an objective way of actually looking at the homeless count in our state. And so if you are thinking about trying to figure out how to distribute solving the homeless problem in a way that's based upon something that is done at a statewide level and isn't just self reported by a city, I think the point in time count number is the number that's the clearest.

It's definitely an undercount according to nearly every source. But if there's a jurisdiction that reports that they have 20 homeless people and then they have an obligation to find housing for 20 people, that's actually more than they're currently doing. So I see that as a start. And maybe the point in time count process will change over time, or there will be additional amendments around point in time count numbers. But I think that it's premature, really, to be trying to work in that area.

And then to your first point, which was about cities, you heard league of cities and the opposition who was here today to speak. I mean, this is the first Committee hearing and it was introduced and it's going to gov and Phi after this. So I expect that there will be quite a bit of engagement on this.

I just want to say that despite the fact that there's a widespread belief that the arena process is forcing cities to do things, essentially the arena process is rooted in local control, because there's a number that's given to a city, but the city figures out how to meet it. And a city could choose to build 100% affordable housing project that would immediately meet all of the needs of the lower income categories. Or it could choose to upzone properties that have a 10% inclusionary ordinance, and then they would have a lot of market rate housing and 10% inclusionary, and there's a no net loss process that results in cities having to work toward that goal.

So to me, the reality is that if we're going to work within our current system, which is that cities and counties conceptually are forced to because of state laws, we think of housing as being the obligation of every city and county to do their part for low income residents. Cities aren't allowed to opt out of that. That we should have the same concept for homelessness, which is cities and counties should not be able to opt out of providing for homeless residents.

And right now they essentially are. And so we have hap funding in large cities who are accessing funding sources to do things. There are things happening, but we are actually not reducing homeless numbers in the state. And if we want to, if we see that as a goal and we don't want to have encampments in public spaces, which I don't want and I don't think any residents want, then we have to say, how are we getting there? And so distributing the obligation among the 500 a little bit less than that, cities and counties in this state seems to be a reasonable way to go about that.

Okay, well, thank you for the explanation. I kind of disagree with you a little bit on the RHNA numbers, the 2010 to 2020 RHNA numbers. A lot of cities did not make their number. And the biggest reason for that is because we had a recession in the front half of that where nobody was building. And then the second half of it, people that were brave enough to start building came forward, started their process that they have to go through.

But that process, before they can get building permits, takes about five to six or seven years. And so pushed them into the 2020 to 2030 range. And because they didn't make their numbers previously that a bunch of their local control was taken away via all this many of our bills that actually we haven't even allowed to come to see how they're working. We spent $22 billion for homeless issues and housing, and yet we're going backwards still.

And we've introduced and enacted a lot of bills in the last two years and three years. And we just seem to be piling more bills on that actually strip local control away and force mandates that cost money onto local agencies. And then every one of these bills has in, after passing, the voters passed a thing. They said, when we do unforced mandates, the state needs to reimburse cities. Well, all of these now have a clause that says this is not reimbursable by the state.

So that's how they get around that. So the cities are really frustrated with this issue of being told, you're going to have to do this and you have to do that. Otherwise, we're going to take away even more control when they haven't even allowed the measures that they're trying to take already that have been passed into law to be able to be studied, to see if they're effective, if they're even needed to be in law anymore or anything. So that's my concern.

We seem to be piling on a lot, and I would like, on a lot of these bills, just take the comments I just said and apply them to all of those other bills. So you don't have to hear me again over and over. So, anyway, I appreciate it and appreciate your efforts to try to work in this. I just wish we would let some of our bills work a little bit before we add on to other ones. Thank you.

And just briefly, to respond to some of the things you just said. So this is not an unfunded mandate, because it has this homeless housing obligation fund attached to it, which would allow cities to access funds for these projects. And also, despite the fact that RHNA may have problems, it actually has resulted in housing that would not have been built otherwise. And that's because of restrictive zoning that prohibited higher density housing that is naturally more affordable.

When those types of projects can't be developed, then it's essentially a stagnant housing market, which has created these systemic problems over multiple decades that we have in. So I know that RHNA gets a really bad rap, and so does HCD. And I was on the other side as a mayor who was in litigation with HCD and really experienced this firsthand. But when you rise up a little bit and look down at it, you realize that there is housing being built because of this.

It is an effective process. It is the process we have. And I'm not trying to create a whole nother agency or oversight mechanism here. It's leaning into the HCD and RHNA process. We have to try to create the opportunities for our unhoused neighbors to be housed and to have that be an obligation that sits at some level of government. And currently it doesn't actually sit anywhere. So this moves that forward.

Yes, Senator Cortese.

Thank you, Mr. Chair. I'm supportive of the bill and no need for the author to respond unless you want to during close, unless the chair wants you to as well. I'm not trying to be the chair here, but I just wanted to indicate why I'm supportive, having presided over the RHNA process once and participated in it at the regional level a number of times, as did our chair at one time in the Bay Area version of the process.

I think of the four things that are sort of highlighted in the digest paragraph about the bill or description, all of them, to me, are really kind of no brainer things. I do think, though, that the bill adds something that's sort of missing. I think the modeling traditionally has been done based on what the cities and counties push up to the region in terms of what they indicate is developable in their general plans.

So their numbers, basically, this is what's developable the region takes that does modeling to see how that's going to match up with job growth, basically, and then moves it. I'm oversimplifying a little bit and then moves it on to HCD. But the fact of the matter is, I have not seen in the modeling in our region, homeless or unhoused population called out.

And we know from point in time census that at least in our area, 97% of the folks they count self identify with that same county, oftentimes with the same city where they're located. So why wouldn't we be including in our needs analysis the housing for them as well? Because they're unhoused and unemployed. I mean, it's almost counterintuitive to exclude them.

I don't know on the piece of it that calls for the homeless Housing Obligation act requirements, whether that's going to be proved to be too burdensome for local government as the bill moves along. But for my part, I think it's a fascinating conversation, and anything that tries to better this RHNA process with fundamentals like this, I think is a good thing. So I'm supportive. Thank you, Mr. Chair.

Can I just briefly respond to what he said there? It'll be quick.

Okay.

So the RHNA process used to involve the locals pushing up what is it their general plans reflect. But HCD has become much more prescriptive. And now, for example, when we just went through it two years ago in San Diego, county, we had a jobs and transit analysis that led to the distribution of housing units. So what type of transit stops are there in the city or county? And then what does the job picture look like? And that drove what the housing needed to be.

So I think the analysis of how RHNA is distributed has changed over time. But also, when you think about it, it is a notable lack that RHNA doesn't include homelessness, because essentially, cities can be zoning for people who are only previously housed. Like, there actually is not a consideration within RHNA now that is dealing with homelessness in a way that has any type of a production requirement.

So there are statements that need to be made and barriers that need to be identified, but all of that is just words. I mean, what I'm really looking for is the action is to say, what is it that the city and county is going to do to provide for a certain specific number of people, not just to talk about identification of barriers and doing additional studies? Because I don't see that as substantive work.

And I think it's very easy for cities to say, we're going to do a homeless action plan, and that's the end of what they do. Doing a homeless action plan actually isn't actually helping any homeless person. So this tries to get to that next level.

Okay. Anything else? Thank you very much. And you may close.

I respectfully ask for an aye vote. Thank you.

Great. Thank you. And we should hopefully momentarily have a six member and establish quorum, and we'll take a motion then. I'm actually going to go. We're now going to call up Senator Limon, and you can present your second bill a little later.

Okay.

Thank you, Senator Blakespear, for coming out of order. Senator Limon. And this is item number five, SB 584.

Thank you, Chair and Senators. First, I want to start off by thanking the Committee staff for their work on this bill. And I'd like to continue to commit to work with this Committee on this bill. California has struggled to get all the low income housing that we need to address the housing crisis.

In addition to all that California has done to address the housing crisis, it's important that we also consider a model in which the government plays a greater role in building and rehabilitating affordable housing projects that are publicly owned and financed. I have heard repeatedly from my local governments for years that we need an ongoing funding source to meet our housing goals, especially for affordable housing. This bill creates a statewide assessment on the commercial use of residential homes and apartments for transient occupancy or short term rentals.

This will provide a budget proof source of income for more affordable housing that California desperately needs. With me today, I have Beverly Yu from the State Building and Construction Trades Council of California and Andres Ramos from Public Advocates to speak in support of the bill.

Thank you, may proceed.

Mr. Chair, Members. Beverly Yu, on behalf of State Building and Construction Trades Council, representing half a million construction workers statewide, we are a proud sponsor of SB 584 and would like to thank the author and her staff for the work on this bill. As you know, California is in a severe housing crisis, and one of the many reasons why affordable housing isn't being built is because there isn't a dedicated, budget proof funding stream. In the last decade, California's population has grown over two and a half million.

But unfortunately, the creation of housing units has not kept up. So, unfortunately, we're seeing a housing shortage for both renters and homebuyers alike. In the past three years, there has been strides to get affordable housing built, but we are still funding only 16% of what is needed to get these projects off the ground. I want to make sure I get the bill right.

SB 584 would create an assessment on short term rentals, and it is important to have this to make sure that this assessment is there to fill in for the portion of housing units that aren't available for permanent occupancy purposes. The Department of Housing Community Development will be collecting the assessment and would be distributing it proportionate to what was collected to the local jurisdiction, and this would go to funding labor force housing for the construction and rehabilitation of these housing units.

This bill also includes strong labor protections as well. SB 584 presents a real solution to our state's housing needs, taking the profit motive out of keeping people housed, allowing families to grow their savings and stabilizing communities. We urge your aye vote. Thank you.

Thank you. Next speaker.

Good afternoon, Chair and Members. I'm Andres Ramos, legislative council with Public Advocates. We're a law firm and advocacy organization that represents the interests and needs of low income communities and communities of color. Throughout California, evictions and homelessness are on the rise because corporate landlords and private equity are driving costs up through speculation, worsening our housing affordability crisis. Short term rentals have contributed to this crisis by removing needed housing from the rental market and thereby pushing rents higher.

We need to create a large sector of housing sheltered from the speculative market that is permanently affordable for people of all income levels who can't afford market rents. That's what this bill calls labor force housing, also sometimes called social housing. It provides public entities and mission driven nonprofits, like community land trusts, with a new source of revenue to provide that housing.

That revenue will supplement local funding sources for social housing, like measure ULA and Los Angeles County, that are likely to continue to arise across the state. Specifically, SB 584 creates a new revenue source to both build new labor force housing and take existing housing off the speculative market. It provides strong renter protections to keep families in their homes.

It will task the Department of Housing and Community Development with developing guidelines on the specifics and implementation, including on the mix of household incomes in labor force housing developments. For these reasons, we respectfully urge an aye vote on SB 584. Thank you.

Thank you very much. Any additional support in the hearing room? Please come forward.

Mr. Chair, Members. Sarah Hawks, California Labor Federation in support.

Next speaker.

Tom Anslow, on behalf of the California State Pipe Trades Council, the Western States Council of Sheet Metal Workers, and the State Association of Electrical Workers, in support.

Mahdi Manji, on behalf of Inner City Law Center, in support.

Cassie Mancini, on behalf of the California School Employees Association, in support.

Any additional support, comment in the hearing room? Seeing none. Is there any opposition in the hearing room? Please come forward.

Mark Stivers with the California Housing Partnership again, and we are very sympathetic with the author's goal of increasing affordable housing supply. We're also very sympathetic to the idea of increasing revenues to help fund that. We have an opposed, unless amended position. We do have an affordable housing finance system that works. We just need more defunding to take it to scale. And this bill would create a kind of a completely new paradigm that competes with that existing system that works well.

And then secondarily, we've had many conversations as a Committee about skilled and trained labor requirements, but we think that will be unmeetable in various parts of the state and would also make it undermine the goal in parts of the state, even where we can find union labor. So our oppose unless amended is that we would like to see the revenues directed towards existing programs and that we use the AB 2011 labor standards in lieu of skilled and trained. But we will happy to have more conversations with you. Thank you.

Ms. Wyatt.

Marina Wyatt with the California Housing Consortium. We submitted a letter of concern, so I don't know if it's appropriate. So we strongly support the addition of new funding sources to both leverage existing private capital and expand the types of affordable housing the state needs to meet its diverse housing needs. However, we have concerns that, as written, this bill will not be as impactful as it could be for the following reasons.

First, the bill unnecessarily limits the types of entities that can develop, produce and manage labor force housing, which will drastically limit the ability to leverage other public, private and philanthropic resources. The deed restrictions will also be challenging to execute for legal and underwriting reasons. And the bill lacks any specific affordability requirements to ensure that the public funds are being used to support housing that the market is not already producing. And third, again, that the skilled and trained workforce requirement, or PLA requirements will limit where the housing can be built because there's many parts of the state that do not have a workforce that can meet those requirements. Thank you.

Thank you. Any additional opposition testimony in the hearing room? Seeing none. We will go to the phone lines. Will the moderator please queue up support and opposition telephonic testimony?

Ladies and gentlemen, if you would wish to comment in support or opposition, please press one, then zero at this time. Please only do so once. One moment. First comment comes from line 82. 82, your line is open.

... CFT, a union of educators and classified professionals and we're proud to support.

Next line is line 84. Please go ahead.

Hi, yes, good afternoon, Mr. Chair and Members. Karim Drissi, on behalf of the California Association of Realtors in opposition for the reasons stated in our letter, we respectfully request a no vote. Thank you.

And at this time, we have nobody else queued up.

Thank you very much. We will bring it back to the Committee. Colleagues, any questions or comments? Senator Cortese and then Senator Seyarto, Senator Caballero.

Thank you, Mr. Chair. I'll be supporting the bill. Just a question on the mechanics of it, if you will. We were trying to do a little research on that office to office beforehand. At what point will we have a better understanding as to actual cost? I mean, it talks about an unspecified percentage of the rent and whether or not that'll be tiered in any way for mom-and-pop operations, which, of course, is some significant percentage of this market, from what I understand. I don't deal with this market a lot, but I know enough about it to know that there's different levels of investment out there, and some are neighborhood people and such.

So we are actually in conversations right now with the short-term rental advocates trying to determine what a percentage would be, and that's why it is not included in this version of the bill. This bill is double referred, and so we hope that we would be able to either come to an agreement or move forward with putting more clear language in terms of what that percentage would be.

Okay. And if I may, without giving up--I'm not asking for any negotiating position, but on the mechanics of it as to pass through to consumers, is this something that you're still working on, whether it basically becomes a property owner cost or what?

Yes, we are still working on that, but the thought was to essentially model some of what we've seen structured through TOT locally. And so that was our starting point. I'm not sure that that's where we will be, but that was our starting point to model a TOT.

All right. Sounds like a good starting point. Thank you, Mr. Chair.

Senator Seyarto.

Thank you. I had questions similar to my colleague over there, especially for the mom-and-pop. They have a vacation home they're trying to keep. This offers them a way of doing that. They're already paying 10% to 12% TOT, in addition to other fees for local and county. So if this is a similar tax to that, another TOT on top of the 10% they already pay, now you're getting into 20% to 25% taxes for operating a single-family home part-time, basically. Because that's what they do. Most Airbnb folks that are of that nature--and I'm not talking about the corporations that go buy 15 or 20 Airbnbs. I know one guy had like 100. If you wanted to focus on those, maybe--but the mom-and-pop, they need to be left alone.

They pay enough taxes. The county can do this if they want. That's what they can use their 10% TOT for. But essentially, most of these folks try to get to a point where they can break even on being able to keep their place. That's a concern: not knowing what that number is is a big factor for me. And also we need to exclude these single operators from this because this will hurt them. This will make some people even lose their property, and I am wholly against that. People have a right to have their vacation home if they want. And moving into that space; I'm not a big fan of that approach. So, thank you.

Thank you. Senator Caballero and then Senator Blakespear.

Thank you. Thank you very much, Mr. Chair. I guess I have to talk for a long time till Senator Blakespear gets back, but I just want to thank the author for bringing this forward. This is going to come to Governance and Finance. So obviously, we'll have an opportunity to talk about what comes next because there's some questions, I think, that need to be answered. Such as, right now, HCD is a collection agency. This is not in their wheelhouse, and so it probably makes more sense to have it somewhere else. And then the ability to create a variety of--there is a missing middle, but there's still a variety of housing needs, and they'll be different in different communities. So you want to make sure we can meet those.

But I want to be even, I think, a little bit more provocative, because back in the day, Senator, I think that people used to own a second home as a vacation home and a destination, and they'd rent it out to family and that kind of stuff. I don't think that's the case anymore. I think people are using land speculation as a way to shelter an investment, put money into buying up land.

And what I've seen is that, especially in tourist destination sites, you see that most of the houses, and I say this because there was a project developed in Monterey County, close to the City of Monterey, that I had friends that moved into around a golf course, and 70% of the units were bought as second homes for someone else and maybe a second or a third home, they're vacant most of the year around, so they're not creating an opportunity to invest in the local community, and they're using up land that would otherwise be used for housing the local workforce. And so, I really think that there ought to be limits on how many units in a community, and that if once it goes beyond a certain amount, that maybe the other units get taxed at a higher level.

I'm spitballing to a certain extent, but it's become really clear to me that one of the challenges in our housing in California is that all locations are really attractive for people to come and have a second or a third or a fourth home. And if we're going to allow it, which is fine, then there ought to be some kind of remuneration that recognizes that then we're crowding out the workforce that can't afford to buy their own home.

And so, I'm putting that out there because I think that the idea is a really good idea. There's some questions I think, that we need to answer, and the TOT model is one that's attractive. And I also think we have to make sure we're building affordable housing units as well. So with that, I look forward to it. I'm going to support it today. I expect it'll get out. And we'll see you at Governance and Finance.

Thank you, Senator Caballero. Okay, so we would have had our 6th vote, but now we've lost one of our original five. So, Senator, please don't leave until Senator Blakespear returns. I would really appreciate that. So we need to wait for lightning to strike. Okay. Any other questions or comments? Okay, Senator Limon, you and I have spoken extensively about this bill--the tax issues that'll be handled in Governance and Finance--but that's not really what we're focused on. I'm sure there will be a robust discussion in Government and Finance. We're focused here on the housing issue, and I'm, of course, a strong supporter of funding for affordable housing, social housing, and I--okay, not too long.

You're all scaring the Chair. Please don't scare him.

Welcome to my world. So I appreciate your work on this. As I have expressed to you, and as we've indicated in the Committee analysis, similar to the Senator Portantino's bill, this bill would set a brand new precedent that for the first time ever, under California law, skilled workforce would attach to affordable housing funding. We've not, to my knowledge--never done that before. And that would be a sea change in affordable housing funding and would set a precedent, as I indicated, relating to Senator Portantino's bill.

I would like to see a dramatically higher percentage of residential construction workers be union members. I fully support that. We are not there. Less than 10% of residential construction workers are currently unionized. That is bad. And I know there are a lot of people working to change that, and I support those efforts wholeheartedly. So skilled workforce language is limiting in terms of what contractors can bid. And even in places like--that we would expect it to be easy, it may not be.

And there are parts of the state where there may not be any bids on a project. And so, when we look at SB 35, which we're trying to renew this year, the prevailing wage part of that bill has gone gangbusters. The skilled workforce part of that bill has not. And so I say all this just to sort of repeat what we say in the analysis and what I've said to you.

As I indicated earlier, I am not in the practice of demanding that authors include particular labor language. To me, that's the author's prerogative. And so I defer to your choice here, and I'll be supporting the bill today. So I appreciate your work. I thought we could take a motion on your bill. We can't yet, hopefully soon, but as soon as we can, we will. And you're welcome to close.

Thank you. And I appreciate the robust discussion. And I think that that is really the intention of this bill, to have a robust discussion. And after seven years of representing the district and certainly being a district that has a high percentage of these short-term rentals and have seen just the impact, the dialogue, the conversation that it generates in communities, it was not easy just to say, "Hey, let's bring this forward." But I think it was needed.

And it went from just something that felt comfortable to something that was needed in a district that was needed, I think, across the state. And that need is to have a robust discussion. Just a couple of things that I wanted to clarify is the one--through TOT models, it is the consumer, right? So if I decide to go to a hotel, if I decide to do a short-term rental, it is the consumer that bears that investment that is made.

And secondly, this bill does allow for project labor agreement or skilled and trained. So it's one or the other. I live, and I represent a district that, whether it's the rural parts of my district that are harder to get to, a little bit further away from some of the jobs, or whether it's the part of the district that has a whole lot of tourists and is very healthy there and becomes more expensive to live in.

I understand some of the real challenges with the labor market and with people not being able to live in the communities that they work in. And so, I think that as a community that has struggled with this in really all sectors, all sectors where people can't always afford to live in the City of Santa Barbara, right? Or in the broader County of Ventura or Santa Barbara County.

I also know that looking at how our local communities have modeled the piece about ensuring that we have been able to have the workforce--really, the PLA, or the skilled and trained system, has even worked in some of these communities where everyone can't afford to live there. So I think that that was part of why we felt that this was something that can be done.

But certainly, you are a thought leader in this space, as is this Committee that works day in and day out to try to help shape us. And so we'll continue to be working with folks. But I wanted to explain why I felt that this piece was important and why we have examples in the state where we can allow for one or the other to work and still see some of the desired outcomes. So, for me, this is an important bill. It's a bill that I'm going to quote, Senator from the Central Valley, that it is provocative, but I think we need that type of conversation right now. So with that, I respectfully ask for an aye vote.

Thank you very much. And I very much appreciate your close. And I want to also just stress that last year, I carried two bills of skilled workforce in the public works context. So my concern is in the residential construction sector, not in commercial, not in public works. So it's a nuanced conversation, and I welcome you to that conversation, Senator. I think it's-

-I shyly come in. And I do want to appreciate the analysis. I will say that I know exactly where you say it. So, page 7 and 8 of the analysis where you lay out this particular concern. So I just want the team to know that it's been read and noted. So thank you.

Thank you very much. We would take a motion, but actually, we're sliding back. We're down to three members. Okay, now we're back up to four.

You might have it.

No, we need--oh, my God. Everyone's here. Okay. I can say this as a Jew. It's a Christmas miracle. Okay, we will establish a quorum now.

Wiener. Present. Ochoa Bogh. Blakespear. Present. Caballero. Present. Cortese. Present. McGuire. Present. Padilla. Seyarto. Present. Skinner. Umberg. Wahab.

Six. We have a quorum. So I would like to entertain a motion by Senator Cortese on SB 584, item 5 by Senator Limon, and we will call the roll.

This is Senate Bill 584 by Senator Limon. The motion is do pass and re-referred to the Committee on Governance and Finance. Wiener. Aye. Ochoa Bogh. Blakespear. Aye. Caballero. Aye. Cortese. Aye. McGuire. Aye. Padilla. Seyarto. No. Skinner. Umberg. Wahab.

Okay, we'll put that Bill on call. It has six. Chris, we're going to vote on all the pending bills if you want to. Yeah. Or have motions and everything. You don't have to say. But if you'd like to vote on them. Now, wait a minute. Okay, great. So let's go back and do motions and votes on all the bills we've heard. Senator Becker will be with you in a moment. So we'll go back to item number two, SB 356 by Senator Archuleta. Hold on 1 second.

And there are amendments on that Bill, so could I get a motion on item two? And actually, before, for Senator Limon that motion is to send the Bill to governance and finance. And so the motion on item two, Archuleta, would be a motion to pass, as amended, to the Committee on Appropriations. Okay, do we have a motion? Motion by Senator Cortese. We will call the roll.

[Roll Call]

We'll put that Bill on call. We'll next go to item number three, SB 834 by Senator Portantino, and I will entertain a motion to pass this Bill to the Governor, to the Committee on Governance and finance. Can I please have a motion by Senator Caballero? By Senator McGuire? Senator Caballero. Okay, we'll call the roll.

[Roll Call]

Okay, we will put that Bill on call. We'll next go to item number four, SB 469 by Senator Allen. And the motion. Is there a motion to pass this Bill to the Committee on appropriations by Senator Cortese? And we will call the roll.

[Roll Call]

Okay, we'll put that Bill on call. And then the final Bill that we've heard but not voted on is item number eight, SB seven, by Senator Blake Spear. And the amendments will not be taken in this Committee. It will be taken in governed finance. So it will just be a straight-up motion to pass the Bill to the Committee on Governance of Finance.

We need to send it to rules first. Okay. My apologies. This will be to send the Bill back to Rules Committee, which will then re refer it. Okay, so, a motion to pass this Bill and send it to the Rules Committee by Senator Cortese. We'll call the roll.

[Roll Call]

Okay, we'll put that on call. And then finally, we're going to do the consent calendar, which is one item. Item number 12, SB 91, by Senator Umberg. Is there a motion on the consent calendar by Senator Caballero? We'll call the roll on the Consent Calendar, which consists of file item 12.

[Roll Call]

Okay, we'll put the consent agenda on call. Okay, we are caught up. I'm very excited. Senator Becker, welcome and thank you for your patience. And this will be item seven, SB 634.

Well, thank you. Good afternoon, Mr. Chair, and Members. I'd like to start by accepting all the Committee amendments, outline the analysis, and thank your Committee staff, particularly Allison Hughes, for working with me and my staff on this Bill. SB 634 will define opportunity housing in statute, and help the state expeditiously address our homelessness crisis. While we wait for permanent supportive housing to be built.

I want to be very clear that I'm supportive of every effort to fund and develop permanent housing, which is the primary way of solving long-term homelessness. California's lack of adequate shelter contributes to California's highest in the nation. Unsheltered rate, with 67% of Californians experiencing homelessness sleeping on the streets without access to shelter or sanitation. In fact, half of all unsheltered homeless Americans live in California.

At the same time, the state and local agencies sit on large swaths of vacant land that is not currently being developed and could be utilized to house our homeless population. California needs a solution that allows people experiencing homelessness to have a roof over their heads while we wait for permanent supportive housing to be constructed. SB 634 helps address these problems by doing the following.

Number one, defining opportunity housing and statute as a low barrier navigation center that is non-congregate, relocatable, reserved for people who are homeless or at risk of experiencing homelessness, and is on land with no demonstrable use within the next five years. Number two, requiring local agencies to respond to requests to develop the land for opportunity housing. Number three, creating a streamlined approval process to develop these kinds of units quickly.

And finally, tasking HCD with reviewing building codes to expedite and reduce construction costs of opportunity housing while maintaining health and safety standards and making sure they're high quality. By doing so, this Bill will be able to rapidly scale inexpensive housing to help house our unhoused neighbors. With me here today, I have two witnesses, Elizabeth Funk from Dignity Moves and Adrian Covert from the Bay Area Council.

Thank you very much. Please come forward. Good to see you.

Okay. Hi, I'm Elizabeth Funk, the founder and CEO of Dignity Moves. Dignity Moves is proud to be a sponsor of SB 634. As Senator Becker mentioned, more permanent housing is the ultimate long-term goal. But because it takes so long and is so expensive, people are languishing on the streets, and the only alternative is group shelters where they don't want to go. Understandably, they're safe, and quite frankly, there still aren't even enough of them.

This model allows us to build fast, scalable solutions to get people indoors immediately, where they can then have the services that they need to rebuild their lives. People don't want to accept group shelter beds because they want their own space. When they have the opportunity to have their own room with a door that locks, it's a game changer and their ability to take a deep breath and start to think forward about rebuilding their lives.

Dignity Moves has built a couple of communities that follow this opportunity housing model. We use vacant land that we borrow because this is obviously an interim use. And we set up relocatable cabins that are easy and fast and scalable where people, the residents, are loving them. They take a deep breath. They have both the combination of privacy, but also the sense of community that has been so important for them that they've learned is what keeps them alive out on the streets. Sorry, excuse me.

As you know, this has become a very popular model. There have been lots of cities that have been curious and have come walking through and toured and aha. Moment when they see what this could be. We're now starting to see interest all across the state, and yet there are things that's being in the way for being able to do this at scale.

And in fact, driving up here today, I had a conversation with a supervisor in Santa Cruz County who said he's writing an ordinance that would allow tiny home communities to be in more zones. I said, I'm doing that job for you today, I hope. And mayhan in San Jose said that he's trying to get public utilities to lend land for their housing and having them drag their feet.

If we could pave the way to do a lot more of this housing fast and scalably, where people can come indoors, we may ultimately need a lot less of that permanent housing, but it keeps people safe while they're waiting. Thank you.

Thank you very much. Thank you. Mr. Chair and Members of the Committee. My name is Adrian Covert. I'm with the Bay Area Council. Housing is a basic human need, as basic as food, water or clothing. Without housing, human health declines rapidly and perishes much more swiftly than their housed counterparts. On any given day in California, there are about 170,000 people experiencing homelessness.

Two-thirds of them about 115,000 people are without access to basic shelter, which puts them at extremely high risk for developing chronic disease, infectious disease, suffering from assaults, homicide, and accidental deaths. Amidst this urgent humanitarian crisis, the Newsom Administration estimates there are about 45,000 Californians with housing vouchers that remain homeless or housing insecure because there's a shortage of places for them to go. We need more places for people to go, permanent housing is the gold standard.

It is the gold standard for how to stably house someone who's been on the streets. But at $600,000 a unit on average, best estimates are that scaling that to meet the need would cost about $70 billion. Currently, the state's facing a $23 billion deficit. The Federal Government is not anywhere to be seen at that kind of level of magnitude of investment. Meanwhile, California is 115,000 homeless residents who are unsheltered cannot wait years or decades for solutions when they're on the streets.

Opportunity housing consists of non-congregate housing that can take months to build and install, not years, and where residents can stay years, not months if no permanent housing is available. And until permanent housing becomes available, this is the missing rung on the ladder between the streets and permanent housing that we can scale quickly and affordably. And it's the most exciting option that I've seen for years. So that's one of the reasons why we're really excited about supporting this Bill.

So SB 634 would encourage the development of opportunity housing while permanent housing is under construction, by defining opportunity housing in statute, by requiring local agencies to respond to a crest to develop the land for this housing type, and by creating a streamlined approval process, by asking HCD to develop and review building codes to expedite the construction of these units. For these reasons, the Bay Area Council is a proud co sponsor of the Bill, and we respectfully ask for your aye vote.

Thank you. Next speaker.

Good afternoon. Ross Buckley, on behalf of Sacramento Mayor Darrell Steinberg, in support.

Michael Lane with SPUR co-sponsor, in strong support.

Steven Szalay with Brownstein on behalf of the Housing Action Coalition in support.

Any additional support in the room? Seeing none. Any opposition in the room? Please come forward. Senator Becker, before we go, I want to just clarify one thing. Thank you for working with us on amendments. I'm truly appreciative of the collaboration you'll be taking those amendments in the Next Committee in Government Finance. Yeah, just wanted to clarify. Next.

Thank you, Mr. Chair, Members standing here, Rashad Johnson, representing Pallet Shelters, respectfully and regrettably in opposition to the Bill, SB 634. In theory, this Bill would normally be something that a company like Pallet would support because we stand to benefit from such a Bill. In its language, buy-right access to surplus land for the intent of increasing shelter and non-congregate navigation center stock would be an invaluable resource in combating homelessness. At Pallet, we have built over 100 non-congregate emergency shelter and transitional housing sites.

Over 40 of those are in California. We have a deep understanding of what is working and what's not in responding to this crisis, as well as where to best invest resources to ensure we effectively and rapidly get to the appropriate goal, more permanent, affordable housing that is accessible to all.

With this experience in mind, pallet cannot support SB 634 unless significantly amended to include guardrails for the following issues, further clarification of the process for surplus land identification, utilization of these public resources, fair processes for access and ultimate long term strategy specification language that prevents developers from being able to charge rent at opportunity housing projects. Requirement of detailed relocation plan for residents that may be asked to relocate from run these sites should the opportunity housing project need to be relocated for any reason.

Requirement of detailed plan for collaboration with local stakeholders to ensure community adoption and engagement with opportunity housing sites with the intent to prioritize placement of residents into permanent housing. Pallet is not a substitute for permanent housing. This Bill, as currently written, provides too many loopholes for developers to aggressively access land for desired models without thought to enforceability and implementation provisions that ensure effective rehabilitation. Residents that would be living in these sites.

Additionally, interim and transitional housing sites should be low cost, easy to deploy, and minimize resource distraction from increasing permanent housing supply. Pallet will be open to supporting SB 634 should significant amendments be to address these issues and concerns. Interim solutions should serve as a starting point, allowing someone the ability to stabilize while they wait for permanent housing to become available. We must embrace alternative interim models so our streets do not continue to serve as waiting rooms for housing.

We must also be very careful to provide these interim models with the appropriate oversight to ensure the safety and care of the residents who will benefit from this model. In this spirit, please consider these amendments. I respectfully urge a no vote unless amended.

Good Afternoon, Mr. Chair and Members Anya Lawler here today on behalf of the California Rural Legal Assistance Foundation and the Public Interest Law Project, both statewide legal services organizations that represent the interests of very low-income Californians, including those experiencing homelessness, appreciate all the work that's been done on the Bill thus far. Regrettably, though, we must remain opposed until a number of outstanding issues have been addressed. We have no issue with this model of housing in general.

Tiny home type developments that provide non congregate shelter on an interim basis, while offering services and other supports, can be an important component of a community's efforts to transition unhoused individuals to stable permanent housing. Unfortunately, we've seen numerous examples of this type of development located in far flung areas that are inaccessible to public transportation, daily necessities and jobs.

More alarmingly, we've seen instances where these developments have been developed rapidly, not because of any urgency to provide humane service and right shelter for the residents, but as a way to justify sweeps. Conditions in some of these developments, which are none that are operated by the sponsor, I should note, have raised significant fair housing and humanitarian concerns.

State law already provides a number of opportunities for buy right approval of this type of housing if it's Low barrier and consistent with housing first principles and appropriately located housing.

Element law requires all jurisdictions to do an in depth analysis of their need for interim housing types and permanent housing types for people experiencing homelessness, and they have to designate a zone or zones where these types of uses can be located by right and prove that those zones have sufficient adequate sites to accommodate the jurisdiction's entire need for that type of housing. Additionally, thanks to your work, Mr. Chair, low barrier navigation centers are also used by right in various zones.

Opportunity housing can utilize these tools already, but if the bill's proponents believe that's unclear, we have no objection to clarifying that. However, if the goal is to expand buy right opportunities to additional locations, it must be clear that the same standards apply both in terms of location and treatment of residents.

We've provided the author with specific statutory language to address these concerns, as well as to clarify that opportunity housing is not permanent housing, and to ensure that opportunity housing proponents proactively develop relocation plans to minimize disruption to residents. Given the likelihood that these temporary housing projects will eventually move, should the Bill move forward today, we look forward to working with the author and sponsors to make these needed changes. Thank you.

Cynthia Castillo, on behalf of Western Center on Law and Poverty, would like to align our comments with Pope Craf and Pallet. Thank you. Next, Speaker Chris Martin, on behalf of Housing California, respectfully, opposed unless amended for the reasons stated by the previous speakers.

Thanks. Thank you. Any additional opposition comment in the hearing room? Seeing none, we'll go to the phone lines. Will the moderator please queue up all telephonic testimony? Both support and oppose, of course.

Ladies and gentlemen, once again, if you wish to make a comment in support or opposition, please press 10. Viewing to line 77. Please go ahead.

Yes, hi, this is Lynette Lee Eng, and I'm a Council Member with the City of Los Alto, and I urge you to support this Bill. SB 634. Thank you. Can you hear me?

Next we go into line 72. Please go ahead.

Good afternoon. Ralph Bonefeld, on behalf of The Action and our 17 affiliated chapters and partners across the state in support of this Bill. Thank you.

Next, we'll be going to line 91. Please go ahead.

Mr. Chair and Members. Sylvia Solis Shaw, here on behalf of the City of Salida and also on behalf of the California Faculty Association, in support of the Bill. Thank you.

Next, we go into line 97. Please go ahead.

Hi, this is Tom Wolf. I'm representing the South Asian Army, San. Francisco, and we support SB 634.

Thank you. Next, we go into line 95. Please go ahead.

Hi, it's Payal Gandhi calling from Connect Homes. We are in support of the Bill and looking for cost-scalable solutions that we provide.

Next, we'll be going to line 100. Please go ahead.

Good afternoon. Sharon Rapport with the Corporation for Supportive Housing, and we respectfully oppose this Bill unless amended.

Next, we go into line 98. Go ahead.

Hello, my name is Romie Nottage I'm the Senior Vice President of Programs for Community Forward SF, and I am here to support the Bill in ending homelessness for women across California. Thank you.

Next we go into line 96. Please go ahead.

Hi, this is Kelly Snyder. Hi. This is Kelly Snyder. I'm a Professor at San Jose State University, and I'm also a missing middle housing developer. I am strongly in support of this Bill. Thank you.

Next we'll be going to line 102. Please go ahead and.

102, your line is open.

Hello, this is Gordon Auchincloss. I am a Chief Assistant District Attorney, retired, for Santa Barbara County, and I am strongly in favor of this bill.

Next we'll be going to line 94. Please go ahead.

Hi, this is Rebecca Eisenberg. I am Director of District 7 of the Santa Clara Valley Water District in Santa Clara County. I speak on my own behalf, but I do know that our entire board cares deeply about serving the unhoused, and I support this bill. Thank you.

Next we'll go on to line 77. Please go ahead.

Yes, I just wanted to make sure you registered my support for this bill. Lynette Lee Eng, Councilmember, City of Los Altos. Thank you.

There's currently no one else in the queue.

Thank you very much. We'll run it back to the Committee. Any questions or comments, colleagues? Senator Blakespear and then Senator Cortese.

Yes, thank you. I appreciate this bill, Senator. Thank you for introducing it. I think that it's quite creative. And the reality is that we run into so much rigidity around our codes when we're trying to solve the homelessness problem that I think figuring out ways to build more housing, more quickly at all levels is just critical.

And I know that in my role in local government, I ran down the rabbit hole of trying to figure out how to do tiny homes, and you run into their RVs, and what about the vehicle code? And what about all these other requirements? And in the end, you're so boxed in in what you can do that you don't end up doing anything. And so, it's okay with me if we consider different ways of even charging rent.

Like we have farm stands that say, "Pay what you can." We have different ways of thinking about how are people participating and living here. Maybe there are ways they can work. Maybe there are different things that I'm not opposed to something to do with rent. And also, I just want to say that in my mind, I always think, "What is the alternative?" And so when we're concerned about things, you think about encampments.

Like, there are so many issues around safety and sanitation and theft and environmental degradation and human trafficking and all of these problems that are in our existing encampments, that having something not happen because, for example, there aren't protections that ensure residents do not exit back into homelessness or temporary shelter. I mean, that's like such a high barrier that it just seems completely unreasonable to me. So I do very much hope that this bill makes it all the way through and that it's not so constrained that it actually ends up resulting in nothing being built, because there's really great opportunity here, and I'm really excited to see what some of these creative things can provide in our state. Thank you.

Thank you. Senator Cortese.

Thank you, Mr. Chair. Thank you for bringing forward a good bill. And it's a bold bill, I think, in some sense, but I wanted to note, and I didn't see it in the legislative history. It may be just because what I'm going to refer to were district bills at the time, but someone that you know well, from the Santa Clara Valley, from Silicon Valley, former Assemblymember Nora Campos, did a district bill that allowed City of San Jose buy right to do this work over a three-year period. And there were no negative repercussions that I know of.

And in fact, to the extent that the county then--and I don't remember the author--mimicked that bill so that Santa Clara County would have a buy right option as well. I think it doesn't get rid of some of the issues that are out there, like where do you actually come up with the sites and so forth. But I'm glad you're pushing forward with this and I hope to see it again in the future.

It sounds like from what I've read, that you've worked very closely with the Committee to try to get the bill in better shape. But I did want you to know it may be worth going back and looking at that old legislative history to help pitch the bill in the future, because as I said, there was really no downside to those programs. I was a county supervisor at the time, and I happen to know that the implementation was not a problem. Thank you. Thank you, Mr. Chair.

Okay. So again, I want to thank you again for working with the Committee, and I think we've agreed to some good amendments. One of the issues that I've expressed to you is DignityMoves is a superb organization that does just fantastic work in the Bay Area and in Southern California. But of course, we have to design a bill that's going to apply to all operators, and not all operators are of the same caliber as DignityMoves. I wish they all were, but we're living in a world where there's variety of quality. But I think this is a strong bill that is, I think, heading in a positive direction. I know you'll continue to engage with the opponents and we'll see what we can do, but you have my support and I appreciate you working with us. So with that, you may close.

Well, thank you. I appreciate all of those comments, and we've had productive conversations with most of the folks that spoke here today. Some of the recent comments came in more recently, but I'm happy to look at them as well and consider those as well. But, yeah, I think as no one needs to be reminded here, people are living on the streets and dying on the streets now every day, and we need to do more.

We don't want to let the perfect ... good on their hand. We do want to make sure that we are putting guardrails up and as you said, make sure that we are accounting for the fact that of all operators in the future who may want to take advantage of this. Thank you, Senator Cortese, for your reminder. We will look into that history as well. And, yeah, just want to thank all who called in. We're really excited about the potential for this to both scale up fast and inexpensive, but also high quality. And that's what drew me to this and why I'm really excited about this and I respectfully ask for your vote.

Thank you very much. Can I have a motion to--this would be to pass to the Committee on Governance and Finance. So moved by Senator Blakespear, and we'll call the roll.

Wiener. Aye. Ochoa Bogh. Blakespear. Aye. Caballero. Cortese. Aye. McGuire. Padilla. Seyarto. Skinner. Umberg. Wahab.

Okay, we'll put that on call. Thank you very much, Senator. Okay. I don't see other authors who aren't on the Committee, so, Senator Blakespear, how about we handle your second bill? This will be item number 9, SB 482.

Okay, thank you. This one should be shorter than the first one, so thank you to the chair and colleagues and staff. Today I present SB 482, which requires HCD to offer capitalized operating subsidy reserves, otherwise called COSRS, to special needs units funded through the multifamily housing program. COSRS are important because, if granted, they set aside upfront money to cover 15 to 20 years worth of deficits in annual operating revenues for housing developments, making easier for the developments to get financed and built.

SB 482 extends cosrs, which are used by HCD and other state agencies for housing developments, to special needs units funded through MHP. By doing so, it ensures that developments serving unhoused individuals with little or no income and the greatest needs can more easily be built. Special needs units are crucial in helping people who are homeless address personal health or substance abuse problems, or to get other help they need.

These units often offer case management, medical and mental health care, substance abuse treatment and employment services, among other resources. This is an essential element in helping to transition some of the most vulnerable Californians out of homelessness. By simply providing cosrs for special needs units, SB 482 ensures that the multifamily housing program can more adequately fund housing developments that serve homeless individuals with the least income and the greatest need.

With me here today to testify in support is Andrew Dawson from the California Housing Partnership and Amber-Lee Leslie from Housing California.

Hello. Andrew Dawson from the California Housing Partnership. The partnership is a private nonprofit that was actually created by the state in 1988 for the preservation and creation of affordable housing for low income households. I'm here to testify on SB 482, a bill that requires HCD to offer COSRS or capitalize operating subsidy reserves in the MHP program. The MHP program is a state's flagship rental housing program that last year has allocated hundreds of millions of dollars for affordable housing.

COSRS are an important tool in our toolkit to create supportive housing, which can be some of the most difficult housing to finance and build. This is because it pairs housing with services for some of the most vulnerable populations, like ELI communities, extremely low income, as well as formerly homeless households. This is hard because we have limited rental income due to serving these communities, as well as higher operating costs because we want to provide these services for these communities to thrive.

COSRS are an important tool that allow developers to draw money with HCD's approval in order to fill in gaps for operating expenses. The bill analysis has a great example of one in one of the comments. We want to ensure that this tool is maintained. Right now, HCD does provide coasters in the no place like home and Veterans housing and homeless prevention program. However, this funding is running out and so ensure this tool is available in the MHP program, which is the flagship program.

With this, I'd like to urge an aye vote and thank you.

Thank you very much. Additional support.

Thank you, Mr. Chairman, Senator Blakespear, I won't elaborate too much on the comments that were made. Again, I'm Amber-Lee Leslie with Housing California Legislative Advocate. We support this bill. We work at the intersection of housing and homelessness, and a lot of the permanent supportive housing providers that we work with are very concerned about the increasing costs just to operate in General.

And so this provides some flexibility upfront for them to provide those critical services to some of the most vulnerable populations that housing providers serve. So with that, we also respectfully urge your aye vote. Thank you.

Niccolo De Luca here on behalf of Nonprofit Housing of Northern California, in support. Thank you.

Embert Madison from the California Apartment Association, in support.

Marina Wiant with the California Housing Consortium, in support.

Any additional support? Comment in the hearing room, seeing none. Is there any opposition in the hearing room? Seeing none. We'll go to the phone lines. Will the moderator please queue up both support and opposition.

First ladies and gentlemen, we should make a comment. In support or opposition, please press 1 and 0. We go into line 72, please go ahead.

Afternoon, this is Ralph Sonnenfeld of EMB Action, calling in proud support on behalf of EMB Action and our 17 chapters and partners across the state. Thank you.

There's currently no one else in the queue.

Thank you. I was just commenting that I always automatically look up when I ask the moderate operator to queue people up. I don't know why I look up, but I look up. Okay, we'll bring it back to the committee. Any questions or comments? Okay. A motion by Senator Cortese to pass the bill to the committee on appropriations. You may close.

I respectfully ask for an aye vote. Thank you.

Okay, we have a motion, and we will call the roll.

[Roll Call]

We'll put that on call. And we'll now ask Senator Cortese to present item 15, SB 745.

Thank you, Mr. Chair and Members. Today I'm here to present SB 745, the Drought Resilient Buildings Act, to address projected water shortages in California due to global climate change. SB 745 directs the California Department of Housing and Community Development and the California Building Standards Commission to research, develop, adopt, approve, codify and publish voluntary mandatory building standards to reduce potable water use in new, non-residential buildings.

The bill also requires both HCD and the Building Standards Commission to review and update the water efficiency and water reuse standards in the California Building Standards Code every three years. Scientists project the average water supply from snowpack will decline to two-thirds of historical levels by 2050. Because buildings stay in use for 30 to 100 years before they're replaced, it's very, very important that California prepare for the realities of climate change by reducing the designed potable water demand of new buildings.

Now, the version before you today includes amendments that we negotiated with the California Building Industry Association in order to ensure that we have builder support for this bill. And key to those amendments, we're making sure that any new voluntary and mandatory standards are developed through the Normal State Building Standards Code adoption process, which provides all stakeholders an opportunity to participate and provide their expertise. Here to testify in support and answer any technical questions: we have Scott Wetch and Thomas Enslow from the California State Pipe Trades Council. Thank you.

Thank you. And, Senator, I apologize if I missed this, but you're accepting the Committee's amendments?

Yes.

Okay. Thank you for working with us on that.

Thank you for working with me. Appreciate it.

Absolutely. You may proceed.

Thank you. Tom Enslow. I'm also here today on behalf of the International Association of Plumbing and Mechanical Officials, IATMO, which represent all the plumbing officials in California, as well as publishes the California Plumbing Code. California population is expected to grow from 40 million to 60 million by 2050, while at the same time the available water is projected to decrease by 15%.

This coming water shortage needs to be addressed in multiple levels, both through urban water use objectives for existing users that water districts are already required to establish, but also by reducing new water demand from new buildings, which is what this legislation addresses. We're reaching a limit of water savings that we can achieve for more efficient appliances, but mandatory water reuse requirements can substantially reduce the additional demand that new buildings create.

A recent study by the San Francisco Public Utilities Commission--and San Francisco has already adopted some mandatory water reuse standards--they found that potable water use can be reduced by between 15% to 38% just through the implementation of onsite gray water recycling in buildings where that makes sense.

This actually supports the urban water objective requirements imposed in water districts because it reduces demand from new buildings, making it easier for water utilities to meet their water use objectives because this means there's less new water that they will need to identify and purchase. Some opponents have also inaccurately claimed that SB 745 is premature because the State Water Resources Control Board is in the process of updating regulations for water quality standards for onsite treatment and reuse of nonpotable water.

However, this is just an update to existing standards and is going to be completed by the end of this year. But the process for adopting new voluntary mandatory standards has to follow the building standards code process, which is on a three-year cycle. The soonest that new mandatory standards required under this bill could be developed and effective would be January of 2026, three years from now. But under this process, the standards have to start being developed by next year. If we don't pass the bill this year, we won't have standards in place to address these issues until 2029. We need to start this process now. We ask for your aye vote. Thank you.

Thank you. Mr. Wetch.

Mr. Chairman and Members, Scott Wetch, on behalf of the California State Pipe Trades Council. The Pipe Trades Council is probably one of the sponsors of this legislation. SB 745 addresses the projected water shortages that the author mentioned due to climate change by requiring the adoption of building standards to reduce the designed potable water demand of new buildings. We've worked with the Building Industry Association. It's beyond me that anybody outside the construction industry would oppose having the Building Standards Commission make buildings more water efficient.

Still haven't wrapped my head around that. It also directs the Building Standards Commission to develop model ordinance language and guidance to streamline local implementation of Water Code Section 13558 which allows builders to install onsite-treated, nonpotable water systems for indoor building water use, where a local approval program has been adopted. Let me use this example. San Francisco has done this. Sacramento has adopted an ordinance.

If this building that we stand in today had been built in San Francisco rather than in Sacramento, and the state had chosen to follow the San Francisco building ordinance, every drop of water that we use washing our hands in the sink basins would be recycled in this building, in the water closets, in the urinals, and in the toilets. Just that simple process could save millions of gallons of water just in this state capitol building. Australia has been doing this for decades. It's time that California caught up and led the way in the country. And we'd urge an aye vote.

Thank you very much. Next speaker in support? Yeah. Just name, organization.

Mr. Chair, Members, Dennis O'Connor, volunteer with the Mono Lake Committee. Also as of last September, recently retired Chief Consultant of the Senate Natural Resources and Water Committee. We need to become more frugal with our water. Mono Lakes Committee supports.

Welcome back.

Mr. Chair, Members, Silvio Ferrari, on behalf of the California Building Industry Association. We're--at the moment, with the language in print--sort of in-between, but based on the amendments and the great work with the sponsors and the author, we're hoping to get there and move into support in the near future. Thank you.

Thank you. Any additional support, comment? Okay. That's great. We have multiple former Committee consultants and staff back today testifying. It's great. We'll now go to opposition.

Good afternoon, Mr. Chair and Members. Beth Olhasso, on behalf of Water Reuse California. We're the association of water recyclers in the state. There's a coalition letter of all the major water associations circulating in opposition; opposed unless amended. Very clearly: we are very supportive of onsite reuse. We are supportive of your SB 966 from 2018. We worked on that. Our problem is mandating any one type of water use. That is our major concern with this piece of legislation.

The state, through the Legislature, passed SB 606, AB 1668 and SB 1157 to require communities to establish an urban water use objective that allows them to use the different tools in their toolbox; what makes sense for the hydrology and a local community to hit that urban water use objective. Communities have invested significantly from San Diego up to Sacramento in centralized water recycling.

And if that's the best use of ratepayer funds, then that's what they should be able to do, the tool they should be able to use to meet that urban water use objective. We do have some concerns with the proposed amendments. It talks about black water. I don't think any home should be recycling their own sewage. That is just wildly out of the scope of something that a homeowner can do.

So there are just some technical things that we are concerned with on that side because it's not just limited to commercial. I haven't seen an RN. We've just gotten a Word document of what we think the amendments are. But everything I have, it says black water multiple times. So that's a big concern. I mean, we really just want to focus the Committee on where the state is going with this urban water use objective and letting local communities.

It makes sense in San Francisco to do on site reuse. It might not in San Diego or the Inland Empire. And let it be a tool in the toolbox. We are happy we have put significant funding into developing a model ordinance. We're happy to dedicate more if there's things that need to happen to allow local communities to develop their own ordinances and regulations after the Water Board does their process of the water quality standards. Thank you.

Thank you. Name, organization.

Julia Hall with the Association of California Water Agencies. Also respectfully opposed, unless amended, align our comments with Beth from Water Reuse. Thank you.

Thank you.

Spencer Saks with the California Association of Sanitation Agencies. Respectfully opposed, unless amended. Thank you.

Aaron Avery with the California Special Districts Association. Respectfully opposed, unless amended and align my comments with Water Reuse. Thank you.

Thank you. Any additional opposition in the room? Seeing none. We'll go to the phone lines.

Ladies and gentlemen, once again, if you wish to make a comment in support or opposition, please press 1, then 0. We'll be going to line 106. Please go ahead.

Good afternoon, Mr. Chair and Members. This is James, Director of the California State Council of Laborers. Don't have a formal position as well. We have had some really robust and productive conversations with the author. We do have a couple of concerns as far as they pertain to green water catchment systems, but we look forward to working with you out there and figuring that out. Thank you.

We currently have one person has just queue up. So one moment while they're in line. Next we'll be going to line 103. Please go ahead.

Good afternoon, Andrea Abergel with the California Municipal Utilities Association in opposition unless amended. Thank you.

There's currently no one else in the queue.

Okay, we'll bring it back to the committee. Any questions? One, Senator, any questions or comments? Okay, great. Senator, I want to thank you for working with us and for accepting the committee's amendments. I think this is an important bill. I know there will be some continuing conversations, but we have to move the dial on water reuse, and that includes blackwater. It includes everything. And I think sometimes with water recycling policy, there is this ick factor that people have and we have to move past that.

We have really good technology to purify water and to recycle, and we dump so much wastewater into the ocean, we need to move away from that. I know you'll continue the conversation with the water agencies, but this is an important step and I appreciate you bringing this forward and I'm happy to support it as amended. So, Senator Blakespear.

Yeah, I just want to echo that. I think it's really true that it's a great source of water is the recycling of the water we already have instead of trying to find new sources. And we treat water and put nearly potable water back into the ocean in the millions of gallons a day. And so this is really important, and I'm grateful for the bill and I'll move it.

Thank you very much. You may close.

I just want to thank you again for your support and the committee's help. I do think the amendments are clear and I respectfully ask for your aye vote.

Thank you very much. I'm sorry, did you move the bill, Senator Blakespear? Okay, so as a motion to move the bill as amended and passed to the committee on appropriations, we'll call the roll.

[Roll Call]

Okay, we'll put that bill on call. We'll now call--I see that Senator Glazer is here--so we will call item number 6, SB 597. And I'm going to have to go over to Public Safety to vote. So I'm going to hand the gavel to Senator Ochoa Bogh. Normally I wouldn't do this, but since I won't be here, Senator Glazer, I am supporting your bill as we discussed, and I know the laborers came in with some late concerns, and I appreciate you engaging that dialogue, but I just want to ensure that you're committed to that continuing dialogue with the laborers.

I am.

Okay. Thank you very much. I'm sorry to interject that before you've even opened. And I will be back.

Should I begin? Okay. All right. Well, let me start by thanking Chair Wiener for his support, of course, and his help as staff in presenting this bill to you today. SB 597 would require that the California Department of Housing and Community Development to conduct research and propose standards to the California Building Standards Commission for the mandatory installation of rainwater capture system on new homes. As California continues to deal with the effects of climate change, the state must look for ways to mitigate the stress it has on our water resources.

I know it's something we all know. One study, recent study by PPIC, the Public Policy Institute, found that while recreational urban water usage has fallen over the past two decades, landscape watering makes up roughly half of all residential and urban water use. Allowing for the development of standards for these types of devices can increase the state's capture ability during periods of high precipitation, like what we have seen this winter, and decrease reliance on existing water resources during periods of drought.

There are other cities in the United States, such as Tucson, Arizona, and Santa Fe, New Mexico, that already have mandates for rainwater capture systems in select construction. Research on these programs show an average decrease in water demand for residents that implement this technology. Under this bill, HCD would evaluate the economic feasibility of rainwater capture system and their ability to reduce reliance on imported water.

They would also assess potential incentives or subsidies to encourage adoption with input from all the stakeholders: local water agencies, public water systems, product manufacturers, local officials, and other stakeholders. Through this process, California will have the ability to augment its water storage capacity and decrease reliance on municipal water systems. With me today, I have Dennis O'Connor of the Mono Lake Committee to testify in support. At the appropriate time, respectfully ask for an aye vote.

Thank you. Chair and Members, Dennis O'Connor, again a volunteer with Mono Lake Committee. The Mono Lake Committee is a nonprofit citizens group dedicated to protecting and restoring the Mono Basin ecosystem, educating the public about Mono Lake and the impacts on the environment of excess water use, and, important for this Committee, promoting cooperative solutions that protect Mono Lake and meet real water needs without transferring environmental problems to other areas of the state. The author mentioned Tucson and Santa Fe.

Actually, rainwater capture systems are worldwide: Australia, New Zealand, Bermuda, the US Virgin Islands--as an aside, if you'd like me to come back as a retired annuitant and give you an eyewitness counting of all those things, I'd be willing to do that. The technology is widely used, and I've toured some rainwater systems, such as the rainwater capture system at Evergreen Lodge near Yosemite. It's on the road to Hetch Hetchi if you're looking for a road trip.

What's interesting about these systems: they require little or no energy to operate, and less energy means less greenhouse gases emitted as part of moving that water. One inch of rain on a typical 1600 square foot roof generates about 1000 gallons of water. The City of Los Angeles, during a drought year, gets four inches of water a year. And if you were to multiply that by all the houses in LA, we're talking real quantities of water.

And then if you consider a year like this year, we'd literally be awash. And every gallon of water that we capture offsets a gallon of municipally supplied water. My former chair, Senator Pavli, used to say that regional water solutions, such as rainwater capture, promote increased regional water reliability. I would also add, from a Mono Lake perspective, increased regional reliability reduces pressure to import water from other watersheds, which is why the Mono Lake Committee supports this bill. Thank you.

Thank you, sir.

Madam Chair, Members, Scott Wetch, on behalf of the California State Pipe Trades Council and the International Association of Plumbing and Mechanical Officials. Generally very supportive of water capture--we have a very robust provision within the California Plumbing Code which IATMO publishes, and so we are generally supportive of the bill. I do need to say, though, any movement towards adding other standards other than IATMO's standards, which are California standards, and which are in statute, would lead us to change from support to strong opposition. Thank you.

Sorry, I'm not on the Chair mindset yet. I got to settle in. So do we have any other witnesses in support of SB 597? Seeing none. We will now move on to witnesses in opposition of SB 597 in Room 1200.

Good afternoon, Chair and Members. Brady Guertin, on behalf of the California Building Officials in respectful, opposed, unless amended position for now. We've had very productive conversation with the author's office and appreciate the concerns of being heard. Most of our concern is just forcing mandatory building standards through the Building Standards Commission, which we support. But doing it in that time frame without the research to back it up has some concerns. Looking at the language, with only a couple cities in the US doing this, we understand it's worldwide.

We think we need to make sure we know the safety implications as well as the opportunities for cost reduction for these abilities, and going through this Building Standards Commission process is the correct approach to do that. We just think that forcing a timeline for the next code cycle is a little "putting the cart before the horse," if you will.

And I think we need to take a step back and have them may research and propose and adopt those model codes at the national level first before mandating new standards. And additionally for all residential construction, we should be aware of the different areas of California and some of the cost implications of these systems. If a place in the desert doesn't get as much rainfall, is it worth that cost? I think it's just things we need to be aware of before mandating it.

So I wanted to bring those to attention. So we think that pushing back a timeline and having that research is really useful and helpful, and then we would be happy to move to neutral without that specific timeline. So thank you, and we'll look forward to continued conversations with the authors and sponsors on the bill.

Thank you. Any other witnesses in opposition?

Julia Hall with the Association of California Water Agencies. We were late taking a position and we actually have a meeting set to speak with the author. So look forward to having productive conversations, but just wanted to share that position today. Thank you.

Thank you.

Madam Chair and Members. Silvio Ferrari, on behalf of the California Building Industry Association, we're also kind of in that in-betweener--really appreciate the direction of the bill. The one thing I think we guard against--putting building code in statute, I think we're right there and comfortable with that--the one thing we would go beyond is to say, we do think there should be language out of the bill to make sure that HCD has the discretion to determine where it is not appropriate. So they do a good job doing analysis of where it does, but they also need to have the flexibility to say, "You know what, it doesn't make sense there." So thank you.

Thank you very much. Do we have any other witnesses in opposition? Seeing none. We will now move on to witnesses waiting to testify via the teleconference service. Moderator if you would, please prompt the individuals waiting to testify in support or opposition, and we will begin.

Once again, ladies and gentlemen, if you wish to speak in support or opposition, please press 1, then 0. There is currently no one queuing up at this time.

All right. Would you mind checking the lines one more time just to make sure that we've given the opportunity to witnesses to testify via the teleconference service?

Of course. As a reminder, once again, if you wish to make a comment in support or opposition, you may press one, then zero.

There's still currently no one queuing up.

Thank you very much, Mr. Moderator, for your time. And we will now want to also thank our witnesses in support, in opposition that came today to testify. We will now bring the discussion back to our Members. Do we have any comments, questions?

Sorry. I'm going to be taking over as Chair here in one second. So they were just briefing me. I really like this bill, and I'm excited by it, so I'm going to support it. And thank you for bringing it.

Thank you very much. Thank you, Mr. Glazer--Senator Glazer, Mr. Glazer--Senator Glazer, for your time this afternoon and presenting the bill, 597. I actually have concerns with the bill with regards to requiring or adding more requirements to housing in the State of California just because of the cost of housing right now in the State of California. That's not to say that we wouldn't encourage, or I wouldn't encourage any builder to provide certain amenities extra in their developments. And I think that would be great and wonderful.

But I am a bit hesitant to continue to promote additional standards or more building requirements for housing that just adds to the cost. So on that front, I'm going to lay off, because I really do think that this could very much be an amenity that builders decide to promote and depending on the area, the geographical area in which they're building homes, but I'm going to leave it at that. Thank you.

Okay. Has everyone commented?

Ready for a close?

I'm ready for a close. Go ahead.

Members, this isn't my first time dealing with these types of issues of water capture. I actually carried a bill four years ago, put a measure on the ballot that the people of California passed with 85% of the vote, that if you installed a water capture system that you wouldn't increase your tax basis. And I was appreciative of the Legislature support and the people's support to have that in law so that you can improve your property with these water capture systems and not increase your taxes. But the bill is very clear on this issue of cost because I'm sensitive to it. We have a housing crisis. We also have a water crisis, too. So we have to try to do both.

But the instinct on these types of bills is I'm going to mandate, and here's the standards, and I'm going to do all the work for HCD right here in this bill. And I've pulled back from that and decided that a stakeholder process is the better way to do it. And that in the bill, it says that we're asking that an evaluation of costs, benefits and feasibility be part of that analysis. So it's not a switch is turned and a requirement is put in place.

But it has to be a robust stakeholder process that evaluates the same issues that you all are concerned with. How do we encourage to support more housing, but also recognize that we have a serious water problem in our state? And we need to develop the right standards to do both. And that's what's before you. And with that, I respectfully ask for an aye vote.

Okay. Do we have a motion? Okay, a motion to pass to the Appropriations Committee by Senator Blakespear. Excuse me. We'll call the roll.

Wiener. Aye. Ochoa Bogh. No. Blakespear. Aye. Caballero. Cortese. McGuire. Padilla. Seyarto. No. Skinner. Umberg. Wahab.

Okay, we'll put that bill on call. Thank you, Senator Glazer. Okay, so next, I believe Senator Ochoa Bogh will go.

Chair. I was about to chair my first Committee here when you were absent, and I was going to crack the hammer and not allow anyone to go over time, cut them off when they did. But unfortunately, you're back, and so that means that you might be a little more lenient.

Are you saying I'm a softie?

A little bit, yes.

You may proceed, Senator Ochoa Bogh.

Thank you, Senator Wiener or Mr. Chair--I apologize--and Members. I'd like to start by thanking the Committee for their work on this bill and accepting the amendments outlined in the analysis that simply remove the outdated term "transitional" from the bill. It is no secret that California is in the midst of a housing crisis. Even though the Department of Housing Community Development believes the state needs at least 70,000 affordable units annually to keep it up with demand, California produced roughly 19,500 new affordable units last year.

The lack of housing development has continued to increase the cost of housing in California to the point the vast majority of housing units are no longer affordable to the average person. According to the Department of Finance, the median price of a single family home peaked in May of 2022 at $898,980. To afford this, a family would need a combination income of $180,000, more than twice California's median household income, and almost five times the California measures poverty line of $36,900.

Current surplus property disposal laws provide that the Department of General Services is authorized to sell state surplus property to a local agency or nonprofit affordable housing sponsor for affordable housing projects below market value if the Department of General Services determines that such a discount is necessary to finance the housing project and that the housing will remain affordable housing for at least 40 years. However, buyers rarely invoke this option.

In fact, according to DGS, none of the surplus properties sold to local governments or nonprofits from 2018 through 2022 were for affordable housing purposes. SB 240 will further incentivize developers to purchase surplus state property for the purposes of building affordable housing by exempting the property from sequel reviews as buy right developments. SB 240 will also add housing projects intended for formerly incarcerated individuals as a priority in surplus housing disposal laws. Joining me to testify in support is Embert Madison, state policy and compliance counsel for the California Apartment Association.

Please proceed.

Good afternoon, Chair and Members. As mentioned, my name is Embert Madison from the California Apartment Association, and I'm happy to extend the organization's support of SB 240. SB 240 would expand our state's existing surplus property laws to serve a critically under-looked population: formerly incarcerated individuals. SB 240 is a necessary step to address California's homelessness crisis by ensuring that affordable housing is developed for individuals who need assistance transitioning outside of the criminal justice system and back into our communities. Thank you for your time, and I respectfully request an aye vote.

Thank you. Any additional support, comment in the room? Seeing none. Any opposition in the room? Seeing none. We'll go to the phone lines.

Ladies and gentlemen, if you wish to make a comment in support or opposition, please press 1, then 0. We'll go to line 72. Please go ahead.

Good afternoon, this is Ralph ... on behalf of the ... Action in support.

And we currently no longer have--one person did just queue up, so one moment while their line number is given.

Hi, this is Ryan with AT&T. I pulled your line to give you your line number. Your line number is 107. You'll be the next one up. I'll get you right back in.

Good afternoon, Chair and Members. Stanicia Boatner, on behalf of the California State Association of Counties in support of SB 240. Thank you.

There's currently no one else in the queue.

Wonderful. We'll bring it back to the Committee. Any questions or comments? Okay, seeing none. Thank you for this bill, and thank you for working with stakeholders and the Committee, and I'm recommending an aye vote on this bill and you may close.

Thank you, Mr. Chair. The Legislature has already found that the provision of decent housing for all Californians is a state goal of the highest priority and that the disposal of surplus state real property is a direct and substantial public purpose of statewide concern. SB 240 will address these concerns by ensuring we do everything we can to incentivize the development of affordable housing on state surplus land. I respectfully ask for an aye vote.

Okay. And so can I have a motion to pass, as amended, to the Committee on Appropriations? Okay, motion by Senator Cortese. We'll call the roll.

Okay, we'll put that on call. I'm going to now hand the gavel over to Senator Ochoa Bogh so I can present file 1, SB 450 on behalf of Senator Atkins.

Wiener. Aye. Ochoa Bogh. Aye. Blakespear. Aye. Caballero. Cortese. Aye. McGuire. Padilla. Seyarto. Aye. Skinner. Umberg. Wahab.

Many of you will recall a Bill that the Pro Tem previously authored, SB 9, the Home Act, which was signed into law in 2021 to authorize duplexes in the State of California. I was a proud co-author of that legislation, and it is starting to have real impacts. SB 9 sought to widen access to housing for California's working families by streamlining a homeowner's ability to build a duplex or split their residential lot, allowing up to four units.

Unfortunately, in the years since it became law, we have seen a number of local jurisdictions take what we might call creative license in implementing this law, either by ignoring it entirely or imposing overly burdensome, unreasonable standards.

Seeking to discourage its use, this Bill SB 450, includes some key provisions to increase the effectiveness of SB 9 by improving access and certainty for homeowners who wish to use the provisions of the law and increasing enforcement of existing law. Respectfully ask for an aye vote. Here to testify is Graciela Castillo-Krings with California YIMBY and Jennifer Svec from the California Association of Realtors.

Good afternoon, Madam Chair and Members. My name is Graciela Castillo-Krings. I am here in strong support of the Bill, and I am here representing California YIMBY. In the interest of time, I will keep my comments short, but really want to make sure that we understand that this is modeled after some of the success that we have had with ADU legislation.

It took a couple of years, and every time we've actually worked at standardizing fees, increasing the productivity by making it easier, and removing some of the red tape that has precluded a lot of homeowners from adding adus. And it is one of the success stories that we have here in California.

You look at the numbers that are being permitted in LA, and we believe that SB nine can be that impactful, can provide additional opportunities for homeowners to not only build additional equity, but also build more generational health, generational intergenerational wealth. So for those reasons, we believe that this is another step forward to making sure that local governments are able to continue to have local control while also balancing the need of additional housing production. So for those reasons, we urge an aye vote. Thank you.

Ms. Chair and Members of the Committee, Jennifer Svec, on behalf of the California Association of Realtors, SB 450 seeks to create is a modest measure to clean up implementation issues that we've experienced with SB 9. The modest changes proposed in the measure will help to bridge the wealth gap among our most ethnically diverse communities throughout the state by ensuring that homeowners benefit from the additional housing opportunities created under SB 9 specifically. Again, these are extraordinarily technical amendments to resolve concerns with implementation of the measure. We respectfully request your aye vote.

Hello, my name is Brian, and I'm here on behalf of Build Casa. We are a company that helps homeowners across the state do SB 9 projects, and we are strongly in support of SB 450. We urge an aye vote and we look forward to continuing to work with Senator Atkins and Members of the Committee to move this Bill forward. This Bill is sorely needed. We are underground across multiple jurisdictions, and the more clarity, the better. Thank you very much.

Denita Stromgrun, volunteer on behalf of AARP, California Capital Response team in support of SB 450. Thank you.

Good afternoon. Brian Sapp, on behalf of Spur Civic, well, Habitat for Humanity California, also in support. Thank you.

Ember Madison, California Apartment Association, in support.

Thank you so much. We will now move on to witnesses. Do we have any other witnesses in support of SB 450? Seeing none. We will now move on to witnesses in opposition of SB 450 here in room 1200. Seeing none. We will now move on to witnesses via the tele in teleconference. Right. We will now move on to witnesses via the teleconference. Waiting to testify. Mr. Moderator, if you would, please prompt the individuals who are ready to testify via the teleconference service either in support or in opposition of SB 450.

Of course. Ladies and gentlemen, once again, if you wish to make a comment or opposition, please press 1 and 0. We'll be going to line 108. Please go ahead.

Good afternoon Lauren Day Valencia, representing the American Planning Association, California chapter in support.

Actually going to line 72. Please go ahead.

Good afternoon. This is Ross Summenfeld on behalf of YIMBY Action, YIMBY Law, and dozens of chapters across California in support.

Next we go into line 110. Please go ahead.

Good afternoon. Afternoon. This is Bob Naylor representing Field Study that's Howard Amundsen, Jr. An Orange County philanthropist. Strong support.

There's currently no one else in the queue.

Thank you very much, Mr. Moderator. We'll bring it back to our Committee for comments or questions.

I have a quick question. What's the relationship between HOAs and SB 9? Is there any. I'm trying to remember what the resolution was around HOAs and SB 9. Perhaps Ms. Svec can refresh our memory on that HOAs. It's been an ongoing issue, but that was a negotiation. Homeowners associations and condo developments have an extraordinarily complicated construction with respect to the legislative or with the statutory construction.

And it makes it almost like a square peg in a round hole. And if we were to facilitate SB nine type conversions within HOA communities, we would probably have to completely crack open the statute, specifically in Davis Sterling. In order to do that, the question was refreshing our memory on the status of HOA. I think they're exempted from. They are exempted from the Bill. My apologies. I was answering the question as to why we didn't include them. Yeah, so they're exempted out.

And I will say, just in response to Ms. Svec , this is an ongoing discussion and sometimes dispute within housing policies about the status of hoas. Sometimes we don't agree. And I know there has been talk about trying to do perhaps a global HOA related housing law to finally resolve that issue. But that has been a Bill by Bill Dialogue. Right.

So when the report says that two-thirds or three-fourths of the state is single-family zoning, and then it talks about the amount of housing that could be built, I mean, we're taking HOAs off the table in discussing SB 9 with the amount of housing that could be built.

If you're suggesting that HOAs should not be exempted, I agree with that. And I know I've had some disagreements with some of the stakeholders in that. I personally don't think we should be exempting out HOAs, but it becomes a very challenging political situation in the building, and I hope that at some point, that gets fully resolved.

Thank you. I know this isn't your Bill, and you're pinch-hitting, but thank you.

Thank you very much. Any other questions or comments from our Members? Do we have a motion on the Bill moved? Thank you. Senator Cortese. We have a motion from Senator Cortese. Madam Senator, thank you very much.

This is Senate Bill 450 by Senator Atkins. The motion is do pass and Re-Refer the Committee on Rules. [Roll Call]

Okay, we'll put that Bill on call. We have. Our remaining bills are two by Senator McGuire, one by Senator Skinner. They're not currently here. They should be here soon.

Why don't we open the rolls on our bills just for anyone who may not have been here for particular. Oh, and Senator Umberg is here, so he can vote on everything now. Welcome, Senator. He was wondering why I'm not in Judiciary. Okay, we will open the roll, starting with item number one, SB 450. Please call the absent Members.

[Roll Call]

And Senator Wahab here, too. Awesome. We will put that Bill back on call.

Item 2, SB 356, please call the absent Members.

Ochoa Bogh. Aye. Padilla. Skinner. Umberg.

This is Senator Archuleta's bill, SB 356.

Umberg. Aye. Wahab. Aye.

We'll put that back on call. Now, item number 3, SB 834 by Senator Portantino. Please call the absent Members.

Ochoa Bogh. No. Padilla. Skinner. Umberg. I think he left. Wahab. Aye.

Okay, we'll put that back on call. Item number 4, SB 469, please call the absent Members.

Ochoa Bogh. Aye. Padilla. Skinner. Umberg. Wahab. Aye.

Okay, we'll put that back on call. Actually, why don't we--now that Senator McGuire--Are you rushing off somewhere? Okay, so we'll go through the role again for you. Item 5, SB 584, please call the absent Members.

Ochoa Bogh. No. Padilla. Skinner. Umberg. Wahab. Aye.

Put that back on call. Item 6, SB 597 by Senator Glazer. Please call the absent Members.

Senator Caballero. Cortese. Aye. McGuire. Aye. Padilla. Skinner. Umberg. Wahab. Aye.

We'll put that back on call. Now, item 7, SB 634 by Senator Becker. Please call the absent Members.

Senator Ochoa Bogh.

Yeah, later, we'll keep it on call.

Caballero. McGuire. Aye. Padilla. Seyarto. Skinner. Umberg. Wahab. Aye.

Put it back on call. Item number 8, SB 7 by Senator Blakespear. Please call the absent Members.

Ochoa Bogh. Padilla. Skinner. Umberg. Wahab. Aye.

We'll put that back on call.

Next, item 9, SB 482 by Senator Blakespear. Please call the absent Members.

Ochoa Bogh. Aye. Caballero. McGuire. Aye. Padilla. Seyarto. Skinner. Umberg. Wahab. Aye.

Okay, we'll put it back on call. Next, the consent calendar, which is item 12, SB 91 by Senator Umberg. Please call the absent Members.

Ochoa Bogh. Aye. Padilla. Skinner. Umberg. Wahab. Aye.

Put that back on call. Next, item 13, SB 240 by Senator Ochoa Bogh. Please call the absent Members.

Senator Caballero, McGuire.

McGuire. Aye. Padilla. Skinner. Umberg. Wahab. Aye.

Okay, we'll put that back on call. And then finally, item 15, SB 745 by Senator Cortese. Please call the absent Members.

Ochoa Bogh. No. Caballero. McGuire. Aye. Padilla. Seyarto. Skinner. Umberg. Wahab. Aye.

Okay, we'll put that back on call. Thank you very much. Okay, now, Senator McGuire has two bills. We'll start with item number 10, SB 18. You may proceed from your special seat.

And one more time, Mr. Chair, would you like to do SB 18 first, sir, or SB 620?

Why don't we start with SB 18?

Yes, sir. Thank you so much. First and foremost, I want to say thank you to the Chair for his incredible collaboration. What I really appreciate about Chair Wiener is that he is active and engaged on each of these bills and making sure that this meeting runs smoothly and his collaboration, and I just want to take a moment and say how much I appreciate that.

Members, the facts are this: Native Americans in California are disproportionately represented among the state's homeless population and have higher rates of poverty, overcrowded and substandard homes than any other population here in the Golden State. And that's why we've introduced SB 18, the Tribal Housing Program Bill. The rate of tribal poverty is more than twice that of the rest of California's population within Native American communities.

And according to census data, approximately 10% of tribes have homes that lack complete plumbing and 7% lack complete kitchens. Homelessness among indigenous individuals, up to double that of the general population here in California, and one-third of tribal residents live below the federal poverty rate. Now, despite the clear need, the overwhelming majority of tribes are unable to access existing housing programs here in the State of California because they conflict with tribal sovereignty, laws and culture.

They're often too restrictive--those state laws--for tribes to meet threshold and compliance requirements, or they're mismatched to the needs that exist on tribal land. And even when there is one-time dedicated funds for tribes within the State of California, it often goes unspent. And here's a statistic from HCD: in 2019, in an effort to address these issues, the Legislature passed AB 1010, making tribes eligible for most of California's housing programs and allowing Housing and Community Development to waive certain requirements for tribal applications.

Despite this, only 13 out of 109 tribes have been awarded state funds. 13 of 109. So let's be clear. We know that we have significant challenges within the State of California. I'm grateful to Housing and Community Development, but we must do better. So SB 18 would address these challenges by creating a new and separate housing programs for tribal governments, specific to tribal member needs, which would be created in consultation with tribes and tailored to the very specific needs that exist within tribal land.

This is similar to what we've already done as a Legislature for farm worker housing, where the Joe Serna Fund Farm Worker Housing Grant Program is a designated fund exclusively to address the housing needs of agricultural workers across the state. We've also taken a similar approach in other policy areas. For example, just two years ago, this Legislature created a specific tribal wildfire program focused for tribal communities.

This bill will support the construction of new homes and the renovation of existing ones in tribal communities who have the greatest need. The bill also provides technical assistance to assist tribes to navigate the complex web of regulations that we all know exist here in the State of California with tribal housing projects. Simply put, SB 18 is a housing program designed by tribes for tribes.

And I have with me today Elizabeth Elliott, who's the Executive Director of the Northern Circle Indian Housing Authority, and Annalee Trujillo, who's the Executive Director of Pala Housing Resource Center of the Pala Band of Mission Indians. And I'm grateful for their leadership on this and would respectfully ask for an aye vote at an appropriate time, Mr. Chair.

Thank you very much. We'll now go to support testimony. Welcome.

Good afternoon, Mr. Chair and Committee. My name is Elizabeth Elliott. We currently serve eight federally recognized tribes spanning over four counties in Northern California. I want to thank Senator McGuire for seeing and hearing the housing disparity cries from tribal nations across California. I promised the families in my communities who are currently living in storage containers and the elders living in substandard homes without running water or electricity and have been for the last 40 years, why SB 18 matters.

I want to call out to the Committee that we must acknowledge Governor Peter Burnett, the first Governor of California, in the State Address; in where he waged a war on the extermination of the California tribal nations, and that that has extended for 173 years. And a perfect example of how that address still lives on is the barriers tribes face in accessing tribal set asides through HCD. My program, Northern Circle, was awarded a HOME Investment Partnership Grant in 2018. To date, we have no signed standard agreement. I ask the Committee for an aye vote because I'm tired of watching the elders in my community die waiting for a four-plex. Thank you.

Thank you very much. Go ahead, next speaker. Welcome.

Thank you, Mr. Chairman. My name is Annalee Trujillo, and I'm from the Pala Band of Mission Indians in Southern California. We have 32 tribes within our area, and our advocacy for tribal housing--thank God, has gotten us here. Thank you--and California, our tribes were the first tribes to be homeless by state action. When you talk about homelessness, it just takes us back to the displacement of all tribes, whether they're relocated or they were terminated. So the first homelessness started with tribes: tribal nations, tribal people. With the creation of SB 18, it's significantly needed across the board. People think, "Okay, well, do we have gaming tribes?" And not all tribes are gaming, and not all gaming tribes are rich.

We don't have the capacity to house all of our tribal members. We need assistance. So we have been very vocal in our advocacy in hosting tribal housing roadshows on the reservation. And if you haven't yet visited one of your reservations in your districts, I really urge you to do so so you can see firsthand of the lack of housing. Our tribes, since AB 1010--I'm sorry--is the first time that we were included with the state to participate in the state programs. Prior to that, tribes have never been invested in at the state level, particularly for housing. So this program is very much needed. And thank you for that.

Thank you very much. Okay, we'll now go to additional support, public comment. Please just state your name and organization, if anything. And so, we welcome you.

Good afternoon. Ross Buckley, on behalf of the City of Sacramento, in support.

Pamela Lopez, on behalf of the Tule River Tribe, in support.

Steve Frisch, on behalf of the Sierra Business Council, in support.

Andrew Dawson, on behalf of the California Housing Partnership, in support.

Sylvia Solis Shaw here, on behalf of the Board of Supervisors for the County of Mendocino, in strong support. Thank you.

Galen Dobbins on behalf of the California Coalition for Rural Housing, in strong support.

Chris Martin on behalf of Housing California, in support.

Chris Lindstrom on behalf of the California Tribal Business Alliance, in support. Thank you.

Thank you. Any additional support in the room? Okay, seeing none. We'll go to opposition. Is there any opposition in the room? Seeing none. We'll go to the phone lines.

... 1, then 0. And there are currently none in the queue.

Okay, terrific. We'll bring it back to the Committee. Colleagues, any questions or comments on this bill? Yes, Senator Ochoa Bogh.

So I just wanted to make a comment, and with regards to--I was privy to attending the conference that they had with the tribes in Pala and recognized the speakers today, and I was really surprised. And I learned a lot of the facts that the witnesses today shared on there. And there really is a need, and we've had conversations in trying to help me understand. I have several tribes in my district, and it was really enlightening to see the struggles that they have faced with not just having access, but more importantly, being aware in how to navigate the process of acquiring resources for the tribes that are available to them.

But because they don't have many people who understand the system or are trained to navigate the system, they just don't have access. So I'm grateful for the effort that you are putting forth in this bill, and if I'm not already a co-author, would love to be added as a co-author on this bill.

Very grateful. Thank you so much. Grateful, Senator.

Okay. Seeing--yes--motion by Senator Ochoa Bogh, and that is to pass to the Committee on Governmental Organization.

With that said, I want to thank the author for bringing this forward. I view this as a first step in terms of making good on our huge debt to our tribal communities for the extreme harm that the State of California inflicted on them. And I appreciate you bringing this first step forward. It certainly shouldn't be the last step.

When we look at the levels of poverty and other, particularly economic challenges facing tribal communities, which that State of Affairs exists because of the way the State of California and the United States treated tribal communities. And so, we need to repay that debt. And this moves us in that direction. And I'm very grateful for you bringing this forward. And with that, we have a motion. You may close.

We respectfully ask for an aye vote. Thank you so much, Mr. Chair, for your leadership on this.

Thank you. Thank you. We'll call the roll.

Wiener. Aye. Ochoa Bogh. Aye. Blakespear. Aye. Caballero. Cortese. Aye. McGuire. Aye. Padilla. Seyarto. Aye. Skinner. Umberg. Wahab. Aye.

Okay, that has the votes, but we'll put the bill on call for absent Members. We'll now go to item 11, SB 620. Senator McGuire, you may proceed.

Thank you so much, Mr. Chair.

And, Mr. Chair, I just want to say how grateful I am once again for your engagement on The Outdoors for All Act. Of course, I'll be accepting the Committee amendments today, and I cannot say how much I appreciate your open and blunt feedback on all of these and being able to land this here today. So thank you, Chair Wiener. Outdoor recreation hit a record high in 2021, with 19 million Californians getting outside.

And when we take a look at our outdoor recreation economy in this state, our outdoor recreation economy, it's actually one of our largest economic drivers in the State of California. It's worth about $54 billion. Camping and hiking are top tiers within that economy. And in too many cases, though, what we know is the expense associated with camping is out of reach financially for everyday Californians. And nearly half of all campers report difficulty finding available campsites.

And especially coming out of the pandemic, camping was discovered by many more across the state and the west. So here's what SB 620 will do. Create enhanced and more affordable access to camping by streamlining the permitting process for small, low impact campsites, all the while establishing a needed framework, guardrails and regulations governing these new sites, including important health and safety regs.

Currently, the process of obtaining a permit to open and operate a campground in California can literally take years and cost hundreds of thousands of dollars to get through the approval process. The average American campground- Now, you're going to be able to watch jeopardy tonight, the average U.S. campground has 124 campsites, and there are significant impacts associated with this. Campgrounds are also regulated by the State of California and Housing and Community Development here in the state. That's the lead agency.

An HCD doesn't differentiate between 124 space campground and a campground that may have nine or less spaces. So here's what this bill will do. It will take a common sense approach and focus on the next several bullet points. It would allow up to nine low impact campsites to be developed under the authority of a local government, city or county, not HCD. It would have a limit of 14 or fewer consecutive nights at one low impact campsite, and that must be enforced.

No sites are allowed for permanent human occupancy, no on street parking, adherence to local in state fire codes. All pertinent local government ordinances apply, they have to have a policy for trash and restrooms. They have to comply with local noise ordinances. All bed taxes apply. And of course, a 24 hours phone number must be available at each low impact campground.

SB 620 will also empower local governments to manage and oversee low impact camping sites, and it's going to open up new economic opportunities, especially in economically disadvantaged rural communities. I have with me today Ada Waelder, excuse me, with the California State Association of Counties, and, of course, Matt Lyon, who is with the California Outdoor Recreation Partnership, to speak in support and would respectfully ask for an aye vote.

Thank you very much. We'll now go to your lead witnesses.

Hello. Thank you, Chair and Members, we appreciate you offering us the opportunity to come and speak today. My name is Ada Waelder, and I'm a legislative advocate with the California State Association of Counties, which represents all 58 counties in California here in proud support of SB 620. Existing state permitting requirements for special occupancy parks creates confusion and potential conflict with local rules. SB 620 defines and provides standards for low impact camping and empowers local governments to regulate this activity in ways that work for their communities.

This bill will help minimize conflict by clarifying state and local authority. Additionally, statewide land use solutions relating to camping are not one size fits all. Zoning varies widely across counties, and allowing flexibility in this area will ensure land is used most appropriately for local needs.

For example, parcel zoned for single family homes in many counties are actually very compatible with low impact hound camping, and other counties utilize residential agricultural zones, which allow for low density single family dwellings in addition to recreational trails, wineries and farming, all of which are compatible uses with low impact camping. CSAC supports efforts like SB 620 to promote agricultural, historic and natural resources tourism throughout the state. On average, campers spend $300 per person at local restaurants, cafes, gear shops, farm stands and more.

These tourism dollars stimulate local economies by providing sustainable revenue for small businesses and helping create jobs. Low impact camping would help drive economic development into these communities. In summary, SB 620 would clarify state and local authority and increase access to the outdoors while providing economic opportunity to small farmers, ranchers and other small rural businesses. CSAC strongly encourages you to support SB 620, and we thank you for your time today.

Thank you.

All right. Thank you, Mr. Chair and Members of the Committee for the opportunity to comment on SB 620 today. My name is Matt Lyon and I'm representing the California Outdoor Recreation Partnership, or CORP. CORP represents over 80 California companies and organizations in the outdoor recreation industry, including gear manufacturers, retailers, guides and more. Participation in outdoor recreation has skyrocketed during the pandemic. In fact, about half of all Californians participated in outdoor recreation last year.

Low impact camping has also grown and is a great example of how the outdoor recreation industry has been responding to changing consumer preferences. Low impact camping areas offer a range of accommodation types at all price points and are spread throughout the state. Some camping areas provide tents and other gear, which can be invaluable for folks who are newer to camping and who may not have the means or knowledge to provide their own gear.

However, there are still too few campsites to accommodate Californians who want to camp. Nearly half of all campers report difficulty finding an available site. As a result, more than half of those who started camping in the past few years said they will likely camp less in the next year. Because the majority of new campers are people of color, barriers like these disproportionately impact populations who have been historically excluded from outdoor spaces. At the core of this issue are existing state permitting requirements.

They can be confusing, financially burdensome and impractical, especially for properties with just two or three temporary campsites. For example, existing rules require hot showers and the installation of intense artificial lighting. These requirements don't help ensure the health and safety of campers and don't reflect current consumer preferences, but they do add to the challenge for the state in meeting its outdoor access for all goals. SB 620 differentiates between commercial campgrounds and low impact camping.

The proposed bill would establish requirements for low impact camping that are appropriate and right size for this activity. In summary, this bill would increase the supply of outdoor accommodations at all price points to meet the current and expected increased demand. Low impact camping helps provide the opportunity for all Californians to experience the benefits of the outdoors. We respectfully request your votes for SB 620, and I thank you for your time and consideration.

Thank you very much. Is there any additional support in the room? Please come forward and please set your name and your organization, if any.

Hello. Alyssa Ravazio, founder and CEO of Hipcamp, strongly in support of this bill. Thank you.

Thank you. Any additional support, comment in the room? Seeing none. Is there any opposition in the room? Seeing none. We'll go to the phone lines.

Ladies and gentlemen if you wish to speak in support or opposition, please press one and then zero at this time. Someone has queued up. One moment.

I'm sorry, you're cutting out a little bit, Moderator.

Someone has queued up one moment while their line number is given.

Thank you.

And next we will go to line number 79. Please go ahead.

This is Rue Mapp, founder and CEO of Outdoor Afro, calling in strong support of this bill.