Senate Standing Committee on Housing

Come down to room 1200. That's where we are, right? Please come down to room 1200, because we have authors and we want to get going, but we are going to get going. So we will start with our first author, who is, I believe, Senator Wiener. Go ahead, Senator Wiener. You're going to start with 937.

Sure. It is good to be back, Madam Chair. I've missed this Committee a lot. So just go on file order, 937 first?

Sure.

Okay. Colleagues, I'm here to present Senate Bill 937, which temporarily extends entitlement and allows for delayed payment of impact fees for housing development. Many jurisdictions used this intervention during the 2008 financial crisis, and it really threw a lifeline to make sure that entitled housing projects didn't just fall apart. We're in a difficult situation now with high interest rates and high construction costs, and we want to make sure that the housing that's getting approved actually has a shot at getting built.

We know that impact fees can add significantly to the cost of a project, and there is broader work happening around impact fees. But this bill will do two things. First, it allows for not all, but many of the impact fees to be collected at the end of the project, as opposed to the beginning. Usually that would be certificate of occupancy. In some cities, it's the final inspection.

And then the second thing that it does is for projects that have been granted their entitlement before January 1, 2024 and that are set to expire before December 31, 2025 it would extend those entitlements by 24 months. We've done extensive stakeholder work, particularly before the local government Committee hearing with various special districts and local governments. And I think we've refined this bill in a really important way, and I think it will do a lot of good. And I respectfully ask for your aye vote.

With me today to testify is Graciela Castillo-Krings on behalf of the California Housing Consortium, and Muhammad Alameldin, a policy associate with the Terner Center.

Great. And we give our key witnesses five minutes total to share between them. And that's both for the key witnesses in support and in opposition. And please proceed.

Good afternoon, Madam Chair and Members. Graciela Castillo-Krings. I am here on behalf of the California Housing Consortium. The California Housing Consortium is a nonprofit organization that advocates for the preservation and production of affordable housing that is available to both low and moderate income families. Every member of this Committee, I don't have to explain the housing shortage and the impact that it's having on a lot of Californians.

The problem right now is further felt because we do not have a sustained funding source, we don't have a housing bond on the ballot yet, we do not have additional revenue. The Governor is actually proposing to eliminate most of the general fund that has been allocated. So just really quickly on SB 937, it does not prevent the ability for local governments to actually enact fees. It simply delays when those fees are collected, and that is an incredibly boom to the production.

One of the things is that in recent years the Legislature has focused on the cost and structure of impact fees, but new data is showing that when those fees are collected really impacts the viability of a project moving forward and actually getting built. Really quickly, just to cite from a paper by the UCLA Lewis Center looking at fee deferrals in the City of LA, it found that, "assessing the fees at an earlier stage can do real harm and deter production".

It further went on to say that fee deferral programs can efficiently reduce cost and increase the viability of housing productions, and they can do so without asking local governments to forfeit any revenue. At a time when it's unclear how we're going to continue to produce housing because the funding is at risk, we ask that you support this bill. Thank you so much.

Thank you.

I'm so sorry. Much taller.

You're good. I know the feeling.

Thank you, Chair Skinner and Committee Members, for the opportunity to comment on SB 937. My name is Muhammad Alameldin. I serve as the policy associate for Terner Center Housing, Terner Center for Housing Innovation at UC Berkeley. The Terner Center is a research center focused on a range of housing issues, from land use and zoning reform to addressing homelessness and climate change. My aim today is to share relevant insights from our research on the effects of impact fees on new housing supply.

Specifically, our work confirms that a large majority of localities impose impact fees at the time of building permit submission. Only a quarter of only a quarter of jurisdictions deferred fees to final inspection or certificate of occupancy. Why is this important? Five months ago, we released a paper, just making a pencil, the math behind housing development. We analyzed the current feasibility of building housing in three major California markets. Using this modeling, we assessed the impact of deferring fees on prototypical multifamily residential units.

We found that results in the savings of about 1% of total housing development cost. As context, when impact fees are collected at the time of building permit issuance, those costs must be financed by the developer, typically with a mix of equity and debt. The developer must pay all interest on all costs incurred during the entire construction period. This is particularly challenging during a high interest environment leads to overall greater general cost and on the margins to some residential projects not being able to pencil.

Furthermore, requiring fees to be paid later in the process could be expected to reduce the overall development costs for developers of subsidized housing, requiring fewer subsidy dollars per unit and thus freezing up some amount of subsidy for additional units that could not otherwise be funded. In conclusion, our analysis does imply that this bill would have the likely effect of increasing the supply of both market rate and affordable housing in most California jurisdictions. Thank you.

Thank you. Are there me-toos now? People that want to add on in support, just your name and that you support, you're in affiliation

Chris Rosa on behalf of Silicon Valley Leadership Group, in support.

Catherine Charles on behalf of Housing Action Coalition as a co-sponsor.

Skyler Wonnacott on behalf of California Business Properties Association, in support.

Rafa Sonnenfeld with YIMBY Action on behalf of YIMBY actions, chapters and members including East Bay YIMBY, Mountain View YIMBY, Northern Neighbors, Peninsula for Everyone, San Francisco YIMBY, Santa Cruz YIMBY, Santa Rosa YIMBY, San Luis Obispo County YIMBY, Urban Environmentalists, Grow the Richmond, Ventura County YIMBY, Streets for People, Southside Forward, How to ADU, People for Housing Orange County, Progress Noe Valley, South Bay YIMBY and Napa-Solano for Everyone, in support. Thank you.

Hi. Brooke Pritchard on behalf of California YIMBY as a proud cosponsor.

Hi Seamus Garrity with Lighthouse Public Affairs, here on behalf of Sand Hill Properties, Buckeye Properties, BuildCasa, SPUR and Habitat for Humanity California, in support.

Oh, apologies. Now, any others who want to add on as a support? We'll hear from our opposition now and obviously five minutes total share for the key witnesses.

Thank you Madam Chair, Members. Nancy Chaires Espinoza on behalf of the Coalition for Adequate School Housing, California statewide school facilities advocacy organization. The planning, and multiple agency appeals that are necessary to build the school facilities to serve these new housing units has a timeline that is years long. So delays mean that the schools will not be available to serve the students that will live in these housing units. And delays in the education sector, unlike even other areas of infrastructure, mean that we will miss an entire opportunity.

Because in the time it takes to secure those approvals, get the funding and build the school, a student will have moved on from an entire grade span, and in the intervening years we will have all of those students causing overcrowding, both the new residents and the existing residents and folks driving farther. It's certainly not the experience that people are looking for when they move into new housing. The analysis points to increasing costs of construction and inflation as a barrier to housing.

All of those factors affect the construction of schools as well, so the delays and increase our costs as well. So all of the arguments that apply to exemptions for utilities and parks apply to us as well, if not more so. And I want to be clear. We are pro housing. The housing issues affect all of us, right?

It affects our students, it affects our workforce. And we agree that the state should support the development of more housing. But as long as the state has made the policy choice to fund school facilities this way, it's not fair to put that burden on the back of California's 6 million students. I want to thank the authors, staff and the sponsors for working with me, and I look forward to continuing that conversation.

Other opposition?

Good afternoon, Chair, Members. Thank you for the opportunity. Anthony Tannehill with California Special Districts Association. A lot of movement and amendments coming out of the last hearing, the last Committee meeting. Still kind of processing and digesting that, getting the feedback from our constituent organizations and members. Appreciate all the hard work that all the Committee staff, author and author staff and even the proponents have put into this. We're going to take it thoughtful, if perhaps not expeditiously.

And I appreciate your grace, but I want to make sure that we get this right on our end so we can give the best representation. The proponents and the author staff have been quite open to dialogue and continue it, and I look forward to doing that.

Any other opposition?

Hi, good afternoon. Sharon Gonzalez with the City of Belmont with an opposed unless amended position. Really do appreciate the amendments that have been taken in local Government Committee. We do still have a few--

It's just a me-too. So you're opposed unless amended. Thank you.

Good afternoon, Chair, Members. Eric O'Donnell, on behalf of the City of La Verne and a respectful opposition position. Thank you.

Elizabeth Henry, Save Lafayette and Livable California and Catalyst in strong opposition.

Christy, Catalyst, strong opposition.

Any other opposition? All right, we'll turn to Committee. Comments?

Okay. Would you like to close?

Yes, Madam Chair. Thank you so much. We've worked intensively with, for example, utilities that came forward and also made amendments around. If there's like ongoing projects that are being built and the cities have to lay out funds right then that would not be delayed. Cash reached out to us a couple weeks ago. We'll certainly work with them. And I respectfully ask for an aye vote.

I just want to make the comment around the school facilities that, you know, it's number one. It's not the only way we find school facilities, but independent of that, it is a way to find school facilities. But it is worthwhile, a point to think we may need to adjust that, because if we look at our demographics, we're not, the birth rate's not up and our school enrollments down and projected to continue to go down. And so just, this is my kind of editorial comment on it.

To have school fees on housing that impede housing which we need and is independent of, you know, birth rate or anything else. We have not enough units. I think that's something the Legislature probably needs to look at at some point in the future. But certainly we should not be-- they should be semi-divorced, those issues.

If I may, Madam Chair, that was very on point. And I will just say right now the City of San Francisco is about to go into a very painful process, which I know Oakland already went through, where our school district is going to have to close schools. That is unbelievably painful and terrible, but it's going to have to happen because of declining enrollment, because we haven't built enough homes. And so I'm very-- I want to fund school facilities. Absolutely. And I'm very sympathetic to that.

But we have to have students for those schools. And when we push families out because we don't build housing, that harms schools, too. Ask for an aye vote.

Yeah. We cannot assume that new housing units means more kids in a school. Anyway, we need a motion.

We don't have a quorum.

Zero, we can't even take motions yet. I forgot. Silly me, trying to get this-your bill will entertain a motion. Once we have a quorum. You may present your next bill, which is item two, SB 951.

Thank you, Madam Chair. SB 951 does two things with respect to housing in the coastal zone. First, it aligns the timeline for housing element rezoning requirements to amendment of a local coastal plan. Right now, as you know, once a housing element is approved, the city has a certain period of time, sometimes one year, or it could be three years, to actually implement that housing element via a rezoning. If they are in the coastal zone, they have to see seek corresponding amendment to their local coastal plan.

This bill will require that the Coastal Commission act on that, or that that process happen on the same timeframe as the required housing element rezoning, so that cities are not put between a rock and a hard place where they're required to do rezoning in a certain period of time, but their LCP has not been approved, and so they are in violation for reasons outside of their control.

The second thing the bill does is that with respect to situations where you have zoning within a local coastal plan, where more than one use is allowed on the parcel, let's say the primary use is residential, but with a conditional use, you can have commercial under the, under existing law, if it's county jurisdiction. So either. So unincorporated land, then going to that secondary use means that even though it's part of the local coastal plan, it's still appealable to the Coastal Commission.

But if it's in city land, it's not. And the reason for that is that coastal county land is more likely to be rural and more prohibited, environmentally sensitive. And so that's why there's more. Those secondary uses are appealable to the Coastal Commission, but not in cities, which are more likely to be urbanized and less environmentally sensitive.

And so if you are both a city and a county, which I happen to represent the only city and county in the state, you are currently treated as a county, even though that particular city and county known as San Francisco, as I said in the last Committee, is many things, but rural is not one of them. This will clarify that if you are both a city and a county, you are treated as a city, not as a county. We worked with the Coastal Commission.

The original version of the bill was a little broader. We worked with the Coastal Commission, and they've removed their opposition. And I respectfully asked for an aye vote.

Witnesses in support? Witnesses in support again, the five minutes for the key and then the add-ons.

I think it might just be me today, and I promise I won't take five minutes. Good afternoon, Chair Members, my name is Kathryn Charles, and I'm here on behalf of Housing Action Coalition in support of SB 951. I'd like to echo Senator Weiner's thanks to the Commission for their work on moving the bill forward. SB 951 introduces two common sense reforms.

First, existing law allows projects within the coastal zone and in coastal counties to be appealed to the Commission if a project does not conform with the main permitted use. This has allowed the Commission have a hand in conserving agricultural and open lands across the coast. However, this provision is intended to apply to rural counties, not urban San Francisco, which, as the Senator mentioned, is both a city and a county.

SB 951 refines this appeal, maintaining its application in rural California while treating San Francisco like this city that it is. Second, when local governments are required to upstone by HCD they are typically given one to three years to comply. These required actions, however, often result in updates to lcps, which require Coastal Commission review, which takes time. Local governments often end up stuck between two state agencies working on two different schedules.

SB 951 aligns these processes, giving one to three years to both the required up-zoning and its associated LCP update. This bill simply provides clarity to local governments while maintaining coastal resource protection to help California achieve its housing goals. And with that, I respectfully ask for your aye vote. Thank you.

hank you. Now, any other witnesses in support? In support to come up to the mic.

Shame is scaredy with Lighthouse Public Affairs. On behalf of spur in support.

Ralph Sonnenfeld with the MB action. For brevity's sake, I won't list the 19 other chapters in support of this Bill. Thank you.

Any others in support? All right, let's hear our witnesses in opposition.

Good afternoon, chair Members. Brady Garten, on behalf of the League of California Cities in respectful opposed unless amended. We've had very productive conversations with the author's office, but one of our main concerns with the bill. So we represent the 61 cities in the coastal zone. We believe that requiring local governments to update their LCPs zone.

Our proposed amendments would be to shift the burden of doubling down on local planning in the LCP and housing element and rather provide incentives to local governments to identify where there are challenges in the local coastal planning and in meeting housing goals. We look forward to continuing conversations on the measure and appreciate all the productive conversations we have.

We are hoping for some fine tuning in terms of having the Coastal Commission make sure we approve the lcps at the same time while we're moving through the process, and we'll look forward to those continued conversations. Thank you.

Madam Chair Members. Paul Yoder, on behalf of the City and County of San Francisco, a super majority of the Board of Supervisors still opposed to the Bill as written. It does, in fact, and the Senators described it really well. We're having a little respectful family feud here. It does remove the city's appellate authority, period. That's what a provision of this bill does. And again, a supermajority of the Board of Supervisors is opposed to that, and so thus the city's position is dictated that way. Thank you.

Mailing Stefan in opposition on behalf of Sunnyvale United Neighbors. Thank you.

Thank you.

Hi, Susan Kirsch, representing Catalysts for Local Control, speaking in opposition to this bill. We've been here today talking to legislators and various people throughout the Capitol around the fact that the RHNA numbers have been in air. They're inflating.

Excuse me. This is purely an add on. So you are opposed? Opposed. Okay, thank you. Who was going to take five minutes to speak in opposition. Only those are what we consider the witnesses who are the registered opposition. Everything else after that is the add-ons.

Okay, then this is strongly opposed.

Thank you. Appreciate it.

Elizabeth Henry, Lafayette, California. Save Lafayette. Livable California Catalyst in strong opposition. This is a violation of the California Coastal Act.

Next person. Thank you.

Sue Degree. Catalyst, Pacifica. Definitely opposed. Thank you.

Ken Bukowski, Berkeley. Opposed.

Christie, strongly opposed. We all want to use the coast. Thank you.

Thank you. All right. Seeing no other opposition, let me bring it back to the dais.

I've heard it before.

Okay. I know that there were quite a few amendments taken in the last Committee, and so the bill that's before us is those that were as how it was amended. Would you like to close?

Yes. Thank you very much. You're right. The original version of the bill was broader. We worked through issues with the Coastal Commission, and I'm grateful to the Coastal Commission for engaging with us and with the San Francisco Planning Department. This is a very solid Bill, and I respectfully ask for your aye vote.

All right. Do we for have a motion? Okay.

Madam Chair.

No quorum yet that I looked at.

More prepared to move at the right time.

I saw these more people in the room and I thought maybe we had it.

Okay, Senator, you can go to your next Bill. undefined

Okay. The last final bill, Senate Bill 1037, is a bill to ensure that the Attorney General has the tools that he needs to enforce state housing laws. The legislature over the last decade has significantly strengthened state housing law to acknowledge the deep housing crisis that we are in. We've also empowered the Attorney General with various laws to enforce those laws, and he is required to enforce those laws.

And this bill applies to a very narrow set of circumstances where the Attorney General has actually filed a lawsuit against the city, where it has gone through the entire litigation and the Attorney General prevails with a court judgment. So that is a tiny, tiny subset. This is not a run of your mill. A city has some issue and there's back and forth.

This is literally when it's so bad that it's gotten to the point that the Attorney General has filed a lawsuit and instead of settling in the middle, it's gone all the way to the end and a judgment is entered against the city, a finding by a court that the city has violated state housing law. Right now, if that happens, the city can then just immediately come into compliance and start following the law. And there's no penalty.

Yes, they had to spend attorney's fees for the litigation, but there's no incentive other than the attorney's fees for them to actually follow the law because they know that if the Attorney General sues them and they go all the way through and lose, then they have at a minimum, several months to just comply and then there's no financial penalty.

That creates a very inadequate incentive system in terms of cities understanding that they have to follow the law and giving an incentive to just work things out instead of actually inducing litigation.

So what this bill will do and doesn't apply to all state housing laws, but a subset of streamlining laws, like when cities refuse to grant a permit, when they are clearly required to or violate housing element law, and then if they get sued and lose, then the court will be able to impose financial penalties, monthly penalties, going back to the beginning of the violation, and there's a range of month. I want to thank the Attorney General for sponsoring the bill.

I think it's a solid one, and I respectfully ask for your aye vote with me today to testify is Jana Staniford with the Office of the Attorney General and Francesca Marti, senior director of strategy and government affairs for California YIMBY.

Go ahead.

Good afternoon, Madam Chair and committee members. I'm Jana Staniford. I'm legislative advocate and Deputy Attorney General for Attorney General Rob Bonta. I have with me Alex Fisch, who's a special assistant Attorney General for housing for the AG, who can also help answer any technical questions you may have. And on behalf of Attorney General Rob Bonta, I want to start by thanking Senator Wiener for authoring this bill, which the Attorney General is proud to sponsor. As you know, California is facing a severe housing shortage and affordability crisis.

The legislature has passed strong laws in recent years to address this crisis, including over a dozen ministerial approval laws. But those laws will only move the needle to address the housing crisis if local governments follow them. Attorney General Rob Bonta has made enforcement of housing law is a top priority and has taken action against some of the most egregious violators. But the remedies available under existing law are not effectively deterring local governments from violating these laws in the first place.

Despite the ministerial approval laws on the books. Several cities have been reluctant to process qualifying applications ministerially, instead imposing local requirements and other creative policies and practices that deviate from the clear, objective standards that the Legislature has established. This frustrates the purpose of ministerial approval laws, which is to streamline approvals and build housing quickly. And while local governments are tasked with planning to meet housing needs of their communities, there are over 200 jurisdictions out of compliance with housing element law. This noncompliance consumes public resources.

The Attorney General could do more to advance other important state housing priorities if every jurisdiction complied with a simple black and white deadline. To address these rampant compliance issues, local governments must be deterred from violating the law. Effective monetary penalties will serve as a deterrent and will strengthen the state's hand when the Attorney General warns local governments that they're out of compliance.

And for local governments that refuse to comply, who shirk their responsibility to meet their fair share of regional and statewide housing needs, SB 1037 would allow the Attorney General to hold them to account quickly. We respectfully ask for your aye vote.

Hello Chair Skinner, distinguished members of the Senate Housing Committee. My name is Francesc Marti and I am the director of strategy and government affairs at California YIMBY, a grassroots organization with over 80,000 members dedicating to ensuring that California is a place of abundant, secure, and affordable housing for all. I am here today to express our strong support for SB 1037, authored by Senator Wiener, which aims to strengthen the enforcement of California's critical housing laws.

At California YIMBY, we firmly believe that the housing laws passed by the legislature in recent years are essential tools in addressing our state's severe housing shortage and affordability crisis. These laws, including the ministerial approval laws, were designed to streamline housing production and ensure that local governments are doing their part to meet housing needs of their communities. However, we have seen firsthand how the lack of compliance by some local governments has hindered progress towards estate housing goals.

When cities and counties fail to process qualifying applications, ministerially update their housing elements, or impose additional local requirements, they are effectively undermining the intent of these laws and slowing down much needed housing production. Furthermore, the fact that over 200 jurisdictions are currently out of compliance with housing element law is deeply concerning. When cities fail to adhere to these laws, they impede the states overall ability to meet critical housing needs.

This non compliance not only obstructs potential housing projects, but also perpetuates inequality in housing access and affordability. It's a cycle that deepens the crisis rather than alleviating it. We believe that SB 1037 is a crucial step in addressing these compliance issues and ensuring that local governments are held accountable for following the law. By allowing the Attorney General to seek effective monetary penalties for violations, this bill will serve as a strong deterrent and encourage local governments to take their housing responsibilities seriously.

This will change the local the calculus for local governments and instill a sense of urgency and accountability. Furthermore, the funds collected from these penalties are earmarked to develop affordable housing within those same communities, creating a direct link between the penalties imposed and the benefits accrued to the community, ensuring that these funds are reinvested where they are most needed. At California YIMBY, we envision a future where every Californian has access to safe, affordable and abundant housing.

To achieve this goal, we need local governments to be partners in our efforts, not obstacles. By supporting SB 1037, we can send a clear message that compliance with state housing laws is not optional, but a requirement for building the thriving, inclusive communities we all deserve. On behalf of California YIMBY, I urge you to vote aye on SB 1037. Thank you for your time and consideration.

Thank you. Now we're just getting the me too's for in support,

Rafa Sonnenfeld on behalf of YIMBY Action and YIMBY Law, in support.

Catherine Charles on behalf of Housing Action Coalition, in support.

Seamus Garrity is scaredy on behalf of Spur and Civic Well, in support.

All right, any more? Seeing none, let's go to our registered opposition.

Good afternoon, chair and members. Brady Guertin again on behalf of the League of California Cities, in respectful opposition to the measure. As currently drafted, SB 1037 does not provide an opportunity for cities to correct an honest mistake or address a genuine difference in interpreting the law. Even those jurisdictions acting in good faith could be subject to significant fines and be required to pay the Attorney General for all costs investigating and prosecuting the action, including expert witness fees and attorneys fees.

Additionally, as currently drafted in the law, the language is very vague about what specific statutes this bill would apply to. We urge the author's office and have had conversations about our concerns that we look forward to working with them in the AG's office to address this, but it's very vague, so it's hard to know which one specifically this addresses. So it would be helpful to have that through amendments in the future.

The other thing that I want to point out is instead of creating new fines and penalties, lawmakers and the Department of Housing and Community Development should provide cities with clear guidance and technical assistance to help them finalize their housing elements and put those plans to work so much needed housing construction can occur. We thank the author's office for the continued conversations. We look forward to that in addressing our concerns and appreciate the time today. Thank you.

Thank you. I'm going to establish quorum before I go further.

[Roll Call]

Alright, we've established quorum so we can take motions a minute, but let me just see if there's anybody else in opposition that wants to add either as a me too. So it's just me too. Opposition.

[Unintelligible] No, that's enough. You're just an add on. Okay, thank you.

Elizabeth Henry, Lafayette, California. Save Lafayette, Liverpool, California Catalyst United neighbors in strong opposition. Fascism.

Susan Kirsch, Catalyst for Local Control, in opposition.

Christie. Small rule cities are going broke in opposition, strong opposition. We've had a lot of queue, a lot of contractors to do our housing element.

[Unintelligible] activists for truly affordable housing object. Thank you.

Ken Bukowski, Catalyst for Local Control, opposed.

all right, dais, go ahead, Senator Seyarto.

Alright, thank you. So the other two bills I agreed with this. One I have problems with and part of the problems I have with this is, you know, there seems to be this big battle and the battle is, you know, the state thinks it's one reason, the local cities have other reasons that they have problems complying with the housing elements that they're given or the housing requirements that they're given.

There's a lot in the process leading up to an approval for housing that the cities don't have a lot of control over. And whether you say it's a ministerial or whatever it is, ministerial doesn't take care of a lot of the elements of the California Environmental Quality Act, nor does it take care of the elements in the national EPA, NEPA. They have to do seismic studies, they have to do traffic studies, they have to do waterways studies, air studies.

All of these things have to be taken into account when they do their general plan, and then they have to be taken into account again when somebody comes in to do a development. If they miss those, then the Attorney General wants to sue them. If they don't miss them and it takes too long to build, now the Attorney General wants to sue them. This isn't all a city problem.

This is a problem that has been created over the last 30 to 35 years from a state level that does not want to recognize its role in slowing down housing and creating this morass of all these regulations that we've created.

And I don't think that adding on another fee or not fee, I'm sorry, another cost, a fine, especially of $10,000, because there's a disagreement between a city and the state, the Attorney General's Office, about whether or not something, whether they're being compliant or not, that's where they're supposed to go. If they didn't, there wouldn't be a court part of this. The only thing they would do is just send the fine down to them.

If they're in court, they're in court because they're battling, they're trying to figure out who's right and who's wrong. And at the end of the day, the city could be right. But if they're going to be dissuaded from that by these huge fines, why on earth would they do that?

They would just take their taxpayer dollars and pay the fine that they've been given and continue to go through this process of trying to get these plans and these developments approved according to all of the rules and regulations that they're told they have to do. So I think there's more to working with cities that needs to be done, especially from the state level, in order to get a handle on our problem. The housing problem isn't just, it's not cities don't want to build housing.

I live in a community that has been building housing. We're the fastest growing city in the two thousands, along with Lincoln up here. We built housing as fast as the housing can be built. But as we added more and more regulations, more and more studies, when a tire print on the side of the road becomes a fairy shrimp study for two years, what are cities supposed to do with that? Are they supposed to just ignore it and get fined? So that's the problem.

That's the conundrum here with the cities and the state's relationship and the Federal Government. They have a role in this, too. I would like to see approaches that actually work with the city. Stop villainizing them as the only people that are responsible for the housing element not being in compliance. And I've said this before, the 2010 to 2020 era, there was nothing being built. There was nothing coming through. No developers were putting into the hopper their development until about 2016.

And then by the time they take the eight years it takes to get through the process, it's the mid 2020s 2022-2023. Now, right now, we are realizing a lot of those now, if you come down to my district, you'll see tons of apartments going up. But these are all been, these, these were all started the approval process in 2016. So why are we blaming them for something we created, a monster that we created?

And so that's what my problem is with this particular bill. Fining cities, especially these amounts, is not going to help a ding thing. And you're not fining cities, you're fining taxpayers, and the taxpayers are fed up with the cost of the affordability index here in California, and this isn't helping it.

Is that a question or it was comment?

It's more of a statement.

I think it was a statement.

I don't know if there's much.

Do we have any other, anybody else in the dais who? Senator Padilla.

Just a comment Madam Chair. I want to thank the author. I serve many decades in local government and regional government, and I think there's plenty of empirical evidence here. First of all, I don't interpret this bill to be aimed at, at compliant, good actors who seek to comply with the many regulations designed to help assist the development of affordable housing in the midst of a crisis.

I think it's very clearly designed to give the Attorney General already, generally, common law has discretion with respect to initiating a request to seek damages or penalties for noncompliance. I think it's pretty clearly aimed at, as the staff analysis term says, flagrant flouter. And I think that analysis and empirical evidence pretty clearly shows that it's not having the desired effect on folks who simply don't want to comply in the midst of a crisis to help produce more housing stock.

I can testify myself that having worked in regional government for years is not a new debate, and it's one that I was at the table fighting every year and oftentimes with communities that flagrantly did not want to provide affordable product in their communities for a variety of, shall we say, unsavory social and political considerations. It's exactly the kind of discretion the Attorney's General needs. It's missing. It's clear. I'm happy to support the bill.

You making a motion?

I will.

Okay. Senator Ochoa Bogh.

Thank you, Madam Chair. Thank you for bringing this measure forward. There's some concerns I have with particularly moving forward with this bill. So I was speaking to a couple of representatives from various cities up north, and I was also talking to some leadership in my current district.

Some of the concerns that were brought up were the fact that when it comes to the arena numbers being determined within our state, within different jurisdictions, that the formula that is being considered within that arena is somewhat kind of random. It's not a very well represented formula in determining what the responsibilities for each jurisdiction should be when it comes to building the houses. Number two, which poses some unattainable goals for some communities to be able to, in addition to that.

So the process itself is somewhat broken, and I promised them that I would look a little further into studying as to what we currently have in the processes in determining what our communities need to develop within that process. But it's a little late right now for this particular bill. But that is a concern when you're trying to implement a system of accountability moving forward.

Number two, the other concern that I have moving forward is that right now, even if we have cities who are willing to build and have approved plans to be able to build in some of those communities, because I'm in the Inland Empire along with Senator Seyarto, summer side county, we still have land, we still are willing and able to build in many of our communities. So it's not a problem.

However, the challenges that they're posing locally is the fact that the costs and the permitting, after all of those studies are being made, are adding to the construction cost at the very end, posing an impact on the final units for many of these houses. So the cost is a factor that is continually increasing. And we have builders that when they look at everything as the time is moving forward and the delays, everything that's coming through, that is posing a difficulty to build.

So there's that even though the cities in goodwill and good effort have approved these developments, at the end, the developers can't move forward with building these homes in those communities because of the cost. It doesn't break down because of the various requirements that they're required to add on or participate or the studies, everything that's imposed on them, it creates an incredible financial barrier for them to be able to move forward in that.

So based on that, it's difficult for me to support a bill that's going to penalize a city for, you know, for attempting, but can't build or.

It won't. Sorry, I don't want to interrupt you.

No, no worries.

Go ahead. You can respond.

Yeah, no, I appreciate that. First of all, in terms of the arena numbers, arena was so badly broken, it was to the point where the most egregious example was in the last arena cycle, an eight year cycle, the arena for the City of Beverly Hills was 3, 1, 2, 3, 3 homes for an eight year period. Why? Because Beverly Hills is a politically powerful city. And so we had wealthier, often whiter cities pushing off RHNA onto lower income communities. And that's just how it was so politicized.

So now Beverly Hills over an eight year period, their arena is 3000 and that's new. And I understand these. And for my own City of San Francisco, our arena was 27,000 over eight. That was way too low for a large, thriving metropolis. We now are at 82,000. It's tripling. And all of this causes tension. There's no doubt about it. It's different. It's different than what we've done over the last 50 years, which is just to say, do whatever you want.

If you want to build a lot of homes, go build a lot of homes. If you don't want to build. We'll maybe have some laws without teeth on the books and we're not going to do anything about it. And that draws drove the car into the ditch and we see what it's done with low income renters, wave after wave, becoming the next generation of homeless people.

We've seen what it's done with middle class families being pushed out of San Francisco and LA and Santa Monica and Berkeley into the Inland Empire and the Central Valley because my community wasn't building enough homes. And so we changed the rules to say we're going to do it differently. And that creates tension, there's no doubt about it. But I'm confident we will get through that tension. I do want to just stress that there are very. The potential fines here apply to two specific categories.

When a city wrongfully denies a permit for a project that's required to be approved under state law, it could be an ADU that they're required to approve. It could be an SBIR 423 streamlined project and AB 2011 streamlined project. If they refuse to grant the permit, even though they're required to, that could subject them to this. Or if they do not adopt a compliant housing element and they fail, refuse to do so.

If they are approving the projects that they're required to approve, and if they have a compliant housing element, this bill does not apply to them. So if the housing, if a project doesn't get built because the financing falls apart or there's a supply chain issue or whatever the problem is, that would not trigger these penalties. This is only when cities themselves are not following the law.

And so I just want to really stress that, and I've been super clear, this is not, it's not about demonizing cities. I'm a former local elected official. As for you, this is about making it more likely that the housing will actually be built. This is not about an honest disagreement. I think the League of Cities said that honest disagreement. And then we also heard just a disagreement. No, if it's an honest excuse, not honest disagreement. Honest mistake.

An honest mistake means that someone reaches out to you and says, hey, you made a mistake and you correct it. This is about if it's gotten to the extreme point that the Attorney General has filed a lawsuit, which does not happen very often, and then goes all the way to the end of the litigation, and a judgment is entered against the city that triggers the penalties. And that is very different than a city just making a mistake or having a violation that it then corrects.

And so I just think it's important to, because this is a very narrow, focused bills on really egregious situations which do happen, unfortunately.

Madam Chair, may I follow up? Just. So the other question I had for you, the concerns with regards to our rural counties and their ability to build or pay fees, especially if they're distressed. And the last point is the ability to cure on that end.

Yeah. So in terms of curing, there are a million opportunities to cure. So, for example, let's say a city denies a project that there's a supposed to require. They will be told, I'm sure, by the developers, hey, you're supposed to. You're required to do this. HCD could come to them with a letter saying, this has to be approved.

We think that's a violation of the law and potentially the Attorney General, and they could do it with phone calls, with letters, and the city will have ample opportunity to say, you know what? We made a mistake, or we've reevaluated. We're granting the permit, and that will not result in any fines. This is not a gotcha, if you think about it just in real life. We can all envision ourselves in a situation.

If it's to the point where you're having a dispute with someone and they sue you, and you go all the way through the entire litigation, which can take time, and then a court judgment is entered against you, that's not just like an oops. Situation. That is like a million opportunities to resolve it and not have to pay these fines.

These fines are reserved for truly egregious situations where a city violates certain specified laws, refuses to correct despite ample opportunity, gets sued, doesn't settle the lawsuit, and say, "Oh, my God, you sued us. Yeah. You're right. We're going to. We're going to change how we're doing things." It goes all the way through and gets a judgment entered against them. That's a very narrow set of cases, and those are egregious cases.

In terms of rural cities, we have set up various funds, and we can always do more for smaller cities that don't have, like, a robust planning department. In SB two, we did that. It set up dedicated funding for grants for cities to be able to pay for additional planning capacity, and that's very important. And HCD also provides technical support for cities that are maybe struggling a little bit. So this is not about a gotcha. This is for bad actors.

Yes. Senator Cortese.

I don't have a long question or anything. I don't want to extend the debate.

I just wanted to say on this issue that I served with Senator Wiener in regional government. He referred to serving in local and, I think regional government, and he hasn't emphasized it very much, but it didn't surprise me at all that when he got to the legislature, he would start doing this kind of work, because he very much emphasized on the regional level, the nexus between the environmental work we're doing, the workforce proximity work we're doing, the vehicle miles travel work we're doing, and this problem.

And it was, I know, very frustrating for him to see no teeth in arena. And we're trying to do, you know, the, essentially the work to bring housing and transportation closer together to reduce vehicle emissions, which are the number one cause of GHG in the Bay Area, and not to have any cooperation. So I just wanted to add that element. Thank you. Obviously, I'll be supporting the bill, and I appreciate it Madam Chair.

Is that a motion? Did we already had one? Sorry. Okay, close.

Thank you for the debate. One thing that I forgot to mention at the beginning, although one of the commenters did, these funds will go into a trust fund for that city for affordable housing in the city that paid the fines. So the funding will stay dedicated for that city, and they will have five years to use it. And if they don't, then it would go into an affordable housing fund for the entire state. So it's not just money going into the General Fund.

I respectfully ask for an aye vote.

Great. Let's have a roll call on SB 1037, and then I'm going to ask for motions on the previous two bills that were heard and on the consent. Go ahead. SB 1037.

The motions do pass to the Committee on Judiciary. [Roll Call]

All right, that Bill is five to two. It's on call. Do we have a motion on SB 951? I move the Bill. All right, we have a motion now on SB 951. That's item two. Let's do the roll call.

Motion is do pass to the Committee on Appropriations. [Roll Call]

Item two, SB 951.

[Roll Call] Seven to zero.

All right, that Bill is seven. I had eight, too. Sure. Six.

I have seven.

Okay, that bill's on call. And now I'll entertain a motion on item one. Great. Let's have a roll call.

Motion is do pass Committee on Appropriations. [Roll Call] Six to zero.

All right, that vote, six to zero. We'll put it on call. And now, may I have a motion on the consent calendar? Thank you very much. Okay, let's do roll call on consent. On the consent calendar is SB 1443, SB 1361, and SB 1512. Go ahead.

[Roll Call] Seven to zero.

All right, that Bill is on call. Seven to zero. And we will now go with. Let's see a Senator Durazo in the room. Yes, let us hear from Senator Durazo. SB 1500 ready? Yes.

Okay, thank you, Madam Chair. I am proud to present SB 1500 when I was approached by LA City Mayor Bass. Anything that we could do to help her. Extraordinary energy on addressing housing and the homeless.

This Bill will change statutory guidelines for the Housing and Community Development and for the tax credit allocation Committee to reduce barriers to permanent housing for unhoused people. The cost of housing, of course, has increased tremendously, especially for Low and extremely low income households. If you take homeowners, 78% of extremely low homeowners are cost-burdened. Of renters, 82% are extremely low renters and they're also cost-burdened to help provide housing opportunities for low-income individuals.

Cities like Los Angeles provide voucher programs to incentivize developers to house such low-income prosperity. Tenants who may not have the immediately may not have the economic means to secure housing independently. The US Department of Housing and Urban Development granted waivers to the city and County of LA for greater flexibility to be able to move Angelenos into temporary housing by cutting through bureaucracy.

Although these vouchers serve as a critical resource to help shelter the unhoused, housing providers have expressed the risk with the current housing voucher system and rules. If these providers house families based on representations, once they have proper documentation of eligibility, they may later find discrepancies such as income eligibility. The risks are that the housing provider may experience severe financial penalties and the vouchers will go unused.

Housing developers and operators have not filled fully utilized the HUD waivers out of fear of facing financial or other types of penalties. Here with me today, we have Kevin Keller, Deputy Director of Los Angeles City Planning, to testify in support, as well as Freddie Quintana, Senior Director of State Affairs for LA City Mayor Bass Office, to help answer questions. Thank you, Madam Chair. Go ahead.

Thank you. Good afternoon Chair and Members. My name is Kevin Keller. I was the Deputy Director of Planning. Now I am the interim deputy mayor of homelessness for Mayor Karen Bass and thank you so much for letting me share a couple words on this important Bill. As part of Mayor Bass housing first approach to homelessness crisis, the city has made an effort to cut through the bureaucratic red tape and swiftly bring unhoused Angelenos indoors.

Just months ago, people experiencing homelessness were required to fill out 30 page questionnaires, provide proof of income and ID to be placed in housing, all difficult challenges for those living on the streets. In an effort to speed this process, the city successfully appealed last year to the US Department of Housing and Urban Development, securing several waivers for the City and County of Los Angeles.

These waivers provide the city flexibility to speed up the temporary to permanent housing placement process by allowing individuals experiencing homelessness to self-serve certify essential information such as income, Social Security number, date of birth, and disability status. Securing these waivers represented the removal of major barrier, but there are additional roadblocks that exist at the state level that are the subject of this Bill.

The City of LA currently has 36,000 housing choice contracts serving over 68,000 total household members. When people accept these vouchers, they commit. I'm sorry. When a developer accepts this voucher, they commit to meeting certain income eligibility requirements in their funding. However, when a housing provider uses the self-certification waiver allowed by the Federal Government.

They risk facing multiple financial and reputational penalties if a minor discrepancy is uncovered between self-reported data and the later documentation. One example would be a person experiencing homelessness who is believed to be an income level below 30% AMI is then found to be even a dollar over 30% AMI when they do their documentation.

TCAC notifies the IR's if an individual experiencing homelessness does not have income verified within 60 days or has income verified above an established income limit. As a result, unfortunately, housing developers and operators have not fully utilized the HUD waivers that Los Angeles and Los Angeles County have received out of fear of these penalties. Even if the individual is low-income and is experiencing homelessness, the situation can be resolved.

SB 1500 would create a statutory guideline for HCD and TCAC to count a tenant at 30% AMI when the tenant gets a third-party income verification above 30% AMI but below 60% AMI and was placed in an income-restricted housing unit using HUD waiver authority. This count would only be for the purposes of qualifying a tenant for an income-restricted unit. Additionally, SB 1500 would provide a 24-month cure period for any issues stemming from the use of the HUD waiver.

This Bill is critical to the success of the HUD presumptive eligibility waivers, which allow developers and property managers to rely on the income and other eligibility information provided by people experiencing homelessness who are applying for units funded through state funding programs as well as tax credit funded projects. For these reasons, on behalf of Mayor Karen Bass, we're asking for your aye vote on SB 1500. Thank you very much.

Did you want to add? No. Okay. So no other primary witnesses in support or speaking. So could we have any witnesses in support that want to be an add on? All right. Do we have any witnesses in opposition? Lovely. All right, Senator Blakespear.

Yes, thank you. This is a great Bill, and the testimony that we just heard is just such a really good example of the amount of red tape and the difficulties with getting unhoused people housed. So I really appreciate Mayor Bass and her staff digging deep into where can we streamline what red tape can we cut? How can we get people housed faster?

Because the amount of people that have to be hired to help people fill out 30-page forms and correct problems, and, I mean, it just magnifies the problem. So I appreciate you carrying this Bill and then bringing it to you. And I hope that there are many more examples of this kind of thing where we can help streamline the process so we can make real progress. Thank you.

Thank you. Any other comments on the dais? Senator Blakespear, did you want to move that? I will. All right. Would you like to close Senator Durazo?

Thank you for your comments, and I appreciate an aye vote. Okay, so we'll do a roll call.

The motion is do pass the Committee on Military and Veterans Affairs. [Roll Call] Five to two.

All right, that bill's five to two. We'll leave it on call for our absent Members. Thank you, Senator Durazo. We'll now go to. Thank you, Senator Padilla. Item six, SB 1049.

Madam Chair and members, I'm here to present SB 1049. I want to thank the chair and members, and I thank your staff for working with me on this bill. Back again, knowledge and information are power. And as we continue the dialogue about the housing crisis in California, we need to step back from just a conversation about scarcity and the production of additional product and all the good work we've tried to do to foster that.

But there's another important element that is directly relevant to access to affordability, and that is working poverty in the state. Interestingly enough, we don't have data, and we never have, that established a baseline formulaic to determine how we ascertain, for example, a minimum wage standard in the state, how we accelerate that, and certainly we have no formula to determine what a living housing wage looks like.

This bill would require the Department of Industrial Relations, along with the workforce, to development, to develop that standard both by market region and average across the state, to understand at any given time what a living housing wage looks like, what is required to afford to put a roof over your head in this state, never mind to move economically ahead. Nearly a third of California's entry level workforce is economically stranded in a way that no prior generation has been.

That means that more and more of our workforce rely on low wage, minimum wage jobs for their livelihood in a way that generations prior did not. In addition, the demand on their labor is not going anywhere. The market for their labor is not going anywhere, but the demand on the time that they put in to meet the same level of value and benefit is increasing. In other words, more workers in California are working more hours and remain stranded.

That means they can't build wealth, they can't save. They can work 60-70-80 hours a week and still not meet their basic needs. This is unsustainable as an economic model, and it should be intolerable to us as policymakers.

We have been a leader in this nation about wage standards, but it is far past time that we began collecting and reporting this data so that we could utilize it in positive ways with respect to housing access and affordability, with respect to our threshold standards for social safety net programs, and so on.

So I'm back again with a substantially similar bill, but also an element that allows us to create a program of certification so that employers who choose electively to pay a living housing wage to their workforce can receive certification by the state for that, and they can market that to potential employees. I believe that when we are dealing with the housing crisis, it needs to be all hands and all tools on deck.

With me today is Anna Hasselblad, senior deputy director of policy for United Ways of California.

Good afternoon, chair and members Anna Hasselblad with United Ways of California. We are the State Association of all Local United Ways, covering every county in California. We are honored and thrilled to be sponsors of SB 1049 by Senator Padilla, and we believe this measure goes a long way to providing both information and incentives that do good things for Californians. Citing the Real Cost Measure, which is our biannual study on what it takes for households to live with dignity in California.

Of the 3.70 million households that fall below the real cost measure, 97 of them, 97% of them have a working adult. People are already working hard, some taking on multiple jobs, as the Senator noted, and still it is not enough. If someone works one full time job, at minimum, they should be able to cover their housing and basic expenses. But the reality is, currently in California, a minimum wage earner must work more than two full time jobs to afford a one bedroom apartment in most major markets.

That kind of workload is simply not sustainable, nor is it equitable. To put housing costs into context for the state regions that the Senate Housing Committee members represent, here is what percentage of households in that area pay 30% or more on housing, which, as we know, is HUD's measure of a housing burden. According to the real cost measure, Bay Area region, 35% of your constituents pay over 30% for housing.

Inland Region 39%, Greater San Diego region 42%, Central Valley region 35%, Greater Los Angeles 44%, those are really striking numbers. Housing inflation, inflation, housing supply, general inflation and inadequate wages have all contributed to a higher cost of living here in California, and no one knows that better than minimum wage earners who struggle to get by. Californians need to know what the baselines are when it comes to determining a living wage, where they reside and or work.

Californians need to know which employers and businesses pay enough to cover the cost of living in that area. Californians need SB 1049. And as was also noted, knowledge is power. When we have an official state living wage formula that outlines clearly what it costs for people to live with dignity in California versus living paycheck to paycheck, we'll have the power to act to address those gaps.

In fact, addressing those gaps in building sustainable investments through state policy and budget decisions is one of the most important roles of the legislature. Wouldn't it be nice to have that formula developed on an annual basis to inform those decisions, knowing that it is based in equity and what communities need across the state? For these reasons, we urge your support of SB 1049. Thank you so much.

Yes. Other witnesses and support.

Good afternoon, chair Skinner and committee members, Bryant Miramontes with AFSCME California in support.

Great. Any others? All right. Do we have witnesses in opposition? Okay, seeing none. Back to the dais members. Go ahead, Senator Menjivar.

Senator, you mentioned that we don't have any data, but we have nonprofits that collect this data. So we do have some data currently, correct?

We have some data. It's not exactly on point. It isn't on point with respect to factoring housing market costs throughout the state, and it isn't. We don't have data that forms a baseline for establishing the wage standards that the state has set.

So this would be a more robust collection.

It would be more complete. It would be, I think, more accurate, and I think it would have much more direct impact and relevance to policy along a lot of fronts.

Senator Seyarto.

Thank you. I think this type of effort would be a lot more beneficial and probably not much as much needed if we were a little bit better at attracting the kind of employment in California that pays those higher wages. We are not doing that very well in California. We have the highest unemployment in the nation. And part of that is because the type of employment that we are attracting are pretty much the service level jobs, and we've thumbed our noses at bigger corporations.

Everyone knows the Elon Musk story, and the Austin area has the benefit of a bunch of jobs that pay really well, and we don't. And so I think California needs to relook at what we're doing to support our businesses that are here, because every business I talk to, they're getting hammered, and a lot of them are closing.

We can't just keep raising wages on the remaining ones to try to make up for a loss in good paying jobs, especially if those aren't jobs that traditionally pay well. Usually if they don't pay well, it's because they are not the highest skilled jobs. You don't have to go to college for eight years to do those jobs. Otherwise, there are jobs like that in the healthcare industry and doctors and nurses, etcetera. So I understand what you're trying to do here, but without that other piece of the puzzle being addressed, I feel like it's kind of a fruitless adventure.

All right, let me see, Senator Ochoa Bogh.

Sorry. So I completely understand the problem that you're trying to solve, Senator Padilla, and I completely agree with you. The affordability in California is incredibly expensive. But, and I am all for gathering data. I'm okay with that for the most part in general. The concern that I have is that I don't think it's going to have the impact that you think it's going to have in the long run. Sort of.

I liken it to the bills that we passed last year increasing the food, the fast food wage and the healthcare wage in which, you know, we, you know, the legislature stated that, you know, this is not a livable wage so they increased the wages of the fast food workers.

And interestingly enough I just had a town hall where a 17, I think 17, 18 year old kid, a democrat Latino came to my town hall and said I'm kind of curious as to your opinion on the wage increases that the legislature came in to help people with affordability in California. And I said, well, I shared my opinion but I wanted to hear his opinion. And I said, well, what's your opinion? He said well I work in one.

And what I saw was that the cost of our burgers, the food that we're serving has gone up. So it really has not made much of a difference in, in our space because things have gone up and they go. So it's adding to the cost of living in California, is that what you're saying? And he said yes. Overall, yes. In this particular area, yes. It's adding to the cost of increase of the services or products that they're selling.

And then the other interesting point that he said is that not only did the cost of food increase but also, the hours that were given were actually being diminished. So he was working less hours. So a well-intended bill trying to address the cost of affordability or, you know, the cost of living or affordability in, you know, trying to increase that. But the impact, you know, the unintended consequence of the well-intended bill was what he was at a very young age observing.

I'm nervous at this particular bill because it notes on my analysis here that says the benefits of wage increases disappear over time as the market response and rents increase. If the living wage is based on housing costs and evidence shows that wage increases raise housing costs, what is it stopping of a living wage from resulting in a never-ending increase of cost? So basically if we increase certain wages, there's more money out there, right? And people are going to be able to afford more.

So the market's going to be able to bear more in real estate, right? I think you did. You did real estate. I think. Did you do.

I did a lot of land use work.

Okay. So in real estate, as there is more money available, what do people do? The increase of the housing goes up. And I'm afraid that this bill will have that unintended consequence in the long run, that well intended.

And I understand what you're doing here, but if we really want to address, because it won't matter, and people always hear me say this, it won't matter what we pay people if we create policies or has an unintended consequence of raising the goods and the service, the cost of the goods and services. Right.

One of the things that I have that I try to point out in various committees is that when we increase, you know, we expect, we have expectations placed on businesses or even on everyday Californians. There's a cost to that. That cost has to be borne by the consumer. So that's not how we, that's not how we're going to fix the affordability.

The only way that I can think of that, you know, many of us agree that we can actually fix the affordability part in California is to literally lower the cost. And how do we do that? By ensuring that we lower taxes. The cost of doing business. This doesn't cost as much because everything that we impose on any space, it's going to be passed down to the consumer. And I'm nervous that this Bill is going to have that unintended, well-intended, well-meaning.

But in the long run, I don't think it's going to have the impact that I think you're hoping for. So I won't be able to support the bill today, but I do support parts of it. But just the overall, I'm nervous that it will have an unintended consequences. Senator Padilla, with almost respect, Madam Chair.

If I might, to you and the members, Senator, just to clarify, the bill does not impact, does not set a new wage standard. It doesn't amend the statute that sets a minimum wage standard in California. It does not raise wages. I would also just want to be clear that increase in wages is not the driver of the increase in cost of housing.

As a matter of fact, people's enhanced marketability of their labor, their ability to earn a living or housing wage actually increases the likelihood that they'll ultimately be able to afford access to housing.

All right. Do we have it? Go ahead, Senator Cortese.

I'm prepared to support the bill, and I'd be happy to make a motion when needed. I just want to say I know Senator Padilla's worked on this now beyond just this year or prior to just this year, and I think that we've had a lot of discussion with the labor side of that here in housing committee.

But if there was any further affirmation needed as to why we need to centralize this data and gather this data on the housing side, just look at the recent homelessness audit that came out. And I think the biggest conclusion drawn there was that there's no centralized data repository between the CBOs and nonprofits and the cities. There's none between the cities and the state, and therefore, we can't draw conclusions like this in any kind of a definitive way. So I think, you know, and maybe you want.

Maybe you can add some of that to something about this most recent audit to your. Your approach, Senator, just because we now have that information, and I think it does support the nature of your bill and what you're trying to do here. So, again, I'm happy to make the motion.

Great. We'll take that as the motion, and we'll see if there's any other comments. If not, we will do a roll call. Oh, sorry, I didn't get you a chance to close.

Not at all. Thank you, Madam Chair and members, respectfully ask for an aye vote.

The motion is do pass to the Committee on Appropriations. [Roll Call] It's five to one.

All right, the bill will stay on call. It's five to one right now, and we will go to. The one you were just reading? Yeah. Okay, go ahead. Sorry.

[Roll Call] 6-1.

Excellent.

The bill is now six to one on call. We'll go to our last two bills, same author, items 7 and 8. Senator Blakespear, starting with SB 1077, which is item seven. Please, go ahead.

Thank you, Chair and colleagues. As we all know, California is in a housing crisis. Since 2010, homelessness has skyrocketed 50%, and last year, 180,000 Californians did not live inside a home. We in the legislature have passed hundreds of bills to address the root causes of this crisis, which is the underproduction of housing.

One of the most notable successes we've seen so far has been the state's loosening of the restrictions around adding accessory dwelling units, or ADUs, to residential properties, while across most of the state. The process of permitting an ADU or a JADU has been substantially simplified for homeowners. Homeowners in the coastal zone faced systemic challenges in permitting ADU and JADU projects by having to go through sometimes redundant CDP process.

The original version of this bill, SB 1077, would have provided a simple, environmentally responsible solution by exempting ADU and JADU projects that were not near sensitive coastal natural resources from the coastal development permit or CDP process. But due to amendments in the previous Natural Resources Committee and opposition by the Coastal Commission, this bill now directs the Coastal Commission to provide improved guidance to local governments.

This guidance will provide clarity on how they may go about updating their local coastal programs, or LCPs, for the purpose of streamlining their ADU and JADU permitting processes. LCPs are the planning documents that local governments are required to develop and get certified by the Coastal Commission to ensure land use and development, mitigate and environmental impacts, and preserve public access to the coast.

California's coastline has substantial diversity in its natural resources and preexisting levels of land use intensity, so regulating development through LCPs is an advantageous approach because it allows land use planning to be tailored to each jurisdiction's individual context. Over the past handful of years, only around 19 of the 76 local governments on the coast have successfully updated their LCPs to to streamline the ADU permitting process.

Many local governments have reported that they chose not to update their LCPs because of the lack of certainty the Coastal Commission provides regarding the standards of review and approved timelines for the update process. The guidance that SB 1077 requires from the commission will address this by providing local governments clarity on the standards for ADU-related LCP updates.

The goal of this bill is to address the challenges that have disincentivized locals from updating their LCPs and thereby promoting LCP amendments that will simplify the ADU permitting process in the coastal zone, and I'd like to invite Katherine Charles, who's representing Bay Area Council, as my lead witness. If it's okay with the chair, she will give her remarks. My lead witness. Thank you.

Good afternoon again, chair and Members. My name is Catherine Charles, and this time I'm here on behalf of the Bay Area Council. The Bay Area Council represents 350 of the largest employers in the Bay Area, and our members include major businesses, nonprofits, public agencies and unions. Few issues are more compelling to our members than that of housing, and we have worked with the legislature in this area in the past specifically to accelerate ADU production in the state.

According to the Turner Center, ADUs are typically affordable rentals to low-income people in their area, making them an extremely significant source of unsubsidized affordable housing. Unfortunately, California coastal zone sees less ADU production because of existing processes maintained by the Coastal Commission. It's much harder and takes more time to permit an ADU in the coastal zone as the process often requires a sequel document that would not be required elsewhere.

SB 1077 seeks to address this by requiring the Coastal Commission to adopt guidance that clarifies and simplifies the permitting process for ADUs. The council is proud to co-sponsor SB 1077, and I respectfully ask for your aye vote. Thank you.

All right. Are any other witnesses in support?

Holly Fraumeni de Jesus with lighthouse public affairs on behalf of SPUR, Habitat for Humanity, California, San Diego Housing Commission, and [unintelligible] in support.

Chair and members, Sosin Madinat, W Strategies, on behalf of UnidosUS in strong support. Thank you.

Hello. Brooke Pritchard on behalf of California YIMBY in support.

Good afternoon. Rafa Sonnenfeld. On behalf of YIMBY Action and our 19 chapters in support. Thank you.

Francisco Morales here on behalf of the Housing Action Coalition, also in support.

Madam Chair and members, Paul Yoder on this one, on behalf of the City of Santa Monica in support. Thank you.

All right. Any others in support? Seeing none. Any in opposition? All right, seeing none comes back to the committee.

Thank you very much, Madam Chair and Senators. This whole issue of the development of affordable housing or units that are affordable on or near the coast is near and dear to my heart. There were a number of projects in Monterey County that were stopped because of an opinion by the Coastal Commission that it would negatively impact the coastal region to have affordable housing.

And particularly in the county, unincorporated area of Castorville, which is a farmworker community, that is, there has been long-term opposition to affordable housing by the neighbors who live within a stone's throw in big houses and some of the interests that don't want to see any affordable near the coastline. It's not within the coastal zone, quite frankly, but it's close.

And so I have a real problem with the bill, as it's written because it gives an agency that has antipathy towards affordable housing my analysis, the ability to tell local government where and how they should build affordable housing. The local government is the determinant, and the local government, which is the county here in this example, has the authority to come up with their coastal, coastal plan, and the coastal plan allowed housing in that region. So I'm not going to be supporting your bill today.

I understand where you were going with your original bill, but I think it's just been changed in the direction that I just can't support today. So I thank you for your efforts, and I wish I could support it, but quite frankly, I think it's true.

Starts meddling with local government in a way that does not help us to solve the housing crisis and that extends their reach beyond what was initially intended, which is a certain region of the coast and its access, it's protecting that access and public ingress and egress, and I don't think that this is going to do that. Thank you.

Any other comments, Senator?

Yes, thank you. I appreciate the author, and I know this has not been easy for the Senator. And I just want to clarify, because based on the amendments that were taken and that resources and where we end up here, and I have some familiarity with this, just to be clear, the bill language is obviously specific only to portions of local coastal programs or LCPAs, amendments to LACLA coastal programs and others that are within the coastal zone.

So these, the adus, the guidance development that the bill directs be done by the Coastal Commission is not something new or novel. It is. The Coastal Commission develops guidelines all the time and, you know, sort of one step below rulemaking that occurs at the office of administrative law. So making of guidelines to guide local jurisdictions and updating their LCPs is not new or unique, especially with respect to housing in the coastal zone.

And your bill, basically, it seems to me, just directs the development of guidance where, in fact, there may be some ambiguity or a lack thereof. And I can attest personally to the many years I served at the commission and as Chairman that that remains lacking in many areas. So I know it's not, not where you started out and wanted to go, but I don't think the version of the bill today is one that is harmful or detrimental.

I think it just simply actually formalizes some direction to the commission to develop guidelines that's long overdue. And so I'm happy to support the bill at the right time.

Any other comments? Sorry, I forgot your mic. So do we have a motion? Okay. Senator Cortese has moved the bill. Let's close. You may close, yes.

I appreciate the comments from my colleagues. Senator Caballero, your specific example that you cite, and then Senator Padilla was the chair of the Coastal Commission. So if anything I say is off, please correct me, me on this. But my understanding of the way the local coastal programs work is that when a city has adopted a local coastal program. An LCP, which is required in Senator Weiner's bill from earlier, will force cities to do that on this housing element update cycle.

So cities that have been reluctant to have an approved LCP will have to do it. But right now, there are only 19 of 76 local governments that have an approved LCP. So what that means is that, and cities are not doing it because they don't want to go through the process when it's uncertain. And it will require a lot of meetings and studies, and they don't see it as being to their benefit.

But what it would do in permitting an ADU is that right now, if a city doesn't have a local coastal program, the ADU permit has to go to the Coastal Commission. And so with an LCD, it would be, the city would be able to actually approve the ADU. And so what's happening right now is that there are multiple levels of regulatory review and also cities that are, or neighbors who are able to get involved at multiple processes.

So this can just take a really long time, and there have to be substantial resources in order for someone to want to run that gauntlet. So what this bill is doing is it's requiring the Coastal Commission to, to give this guidance. And one of the things that we are talking about with this bill is whether HCD should be involved in helping the Coastal Commission come up with the guidance because then it would be based around the housing-specific goals.

My experience in local government, six years as mayor, two on City Council of a coastal city, was that there was a split in the approach from Coastal Commission and HCD. So HCD would be asking the city that was out of compliance with housing law to do something. And Coastal Commission was saying, well, we're not sure about that, and we want it done this other way, and we're not going to approve it. And meanwhile, there's a timeline.

And basically, these are two executive branch agencies that are working at cross purposes, and so aligning them, having HCD and the Coastal Commission actually have the same goals and work toward the same goals with the same understanding would serve all of us, and it would just be better. It would be good governance. So with that, I will conclude and respectfully ask for your aye vote.

All right, then we will. This motion is do pass to appropriations. Let's do a roll call.

[Roll Call]

[Roll Call]. Six to one.

All right, we'll now go to your next bill, which is Item Number Eight: SB 1092.

Okay. Thank you, Chair and colleagues. So this is on a similar topic. SB 1092 aims to address the problem of affordable housing developers avoiding the coastal zone because of the uncertainty of the coastal development permit or CDP process. Appeals of CDPs can drag on for years, have no timelines, and provide no certainty to developers. This can kill projects before decisions are even made.

The bill originally put some timelines and framework around the Coastal Commission that were similar to those the Legislature has required of cities, counties, and special districts. But with opposition from the Coastal Commission and the Natural Resources Committee, this bill now requires the Coastal Commission to investigate the issue and report to the Legislature on what is causing the CDP appeals process to take so long.

I believe that the Coastal Commission focusing on this issue specifically of the CDP appeal process for affordable housing and letting the Legislature know what they consider to be the causes and possible solutions is valuable. So, therefore, I respectfully ask for your aye vote.

All right, do we have any witnesses in support?

Catherine Charles, on behalf of Housing Action Coalition, in support.

Rafa Sonnenfeld with YIMBY Action, in support.

Brooke Pritchard, on behalf of California YIMBY, in support.

Seamus Garrity with Lighthouse Public Affairs, on behalf of San Diego Housing Commission, CivicWell, in support.

Any others? Okay. Any in opposition? Okay. So there's no opposition. Apologizes. I was just making sure I know that your bill had, in effect, had to start all over again in Natural Resources. Well, perhaps--I mean--anyway, the language was greatly changed, so I was just checking with the consultant to verify that our analysis is the description of the bill that we have before us. Okay. All right.

So--yeah, I did, and there was none. I just want to comment before we take a motion and before you close, that I am a strong supporter of our Coastal Preservation Act. I think it's very important to have an entity like the Coastal Commission to protect that resource, and I shudder to think of what would happen if we had not passed that.

But I also feel that in--it's like in any of our well-intended--that we have seen that much less housing has been developed, and I'm not a proponent of developing housing on any along the--let's do the random example now of, say, to the west of Highway 1 in most every place. And yet the coastal zone, as we know, is large, is relatively large, and there are definitely areas of it that are, you know, that both are developed and could, without harming the resource, you know, help us address our housing crisis.

So I know that that was your intent with both these bills, and I know you worked with the Coastal Commission. I just hope the Coastal Commission hears loud and clear that we, that is our intent. The Legislature wants for them to be more open-minded and more--take a relook at how they have dealt with housing and to not, while they may act to--or let's put it a different way--and in their actions, to revise their plans or processes, to do it in a way that does not add a great deal of time or further hurdles.

So I just wanted to say that before we do this vote on this final bill because I think I shared some--it's different, but I just wanted to put on the record that I really want to see the Coastal Commission become a much more active partner with us in addressing these issues. Go ahead. Yes, you may close.

I very much appreciate those comments, and I think it is important to say that all of us, many of us, me included, deeply care about our coast, preserving our coast, our environment, and the Coastal Commission's role. It is--it's not the case that it's mutually exclusive to both provide housing, especially mixed-income housing, and protect our coast.

What we see in the coastal zone, though, is that there's a high degree of variability between the first road to the west, where there's the ocean, and then several miles inland that is a highly developed suburban area that's not near any coastal resources. And there are cities like the City of San Diego, which I partially represent, that have both coastal zone and non-coastal zone areas, and it might just be one road that continues along and all of a sudden becomes the coastal zone.

And the hurdles, once that invisible, imaginary, imperceptible line are crossed, are just really substantial. So part of what my bill was originally trying to do was with a scalpel to try to carve out exactly which areas are sensitive natural resources, and it would have allowed the Coastal Commission to weigh in on that. So it wasn't taking their authority away.

But the reality of having a coastal--I take the Coastal Commission Leadership, Executive Leadership and Board Members at their word that they are working in good faith and that they want to build housing as well, and they want to have transit and they want to have walkable communities. So all the things, the policy goals around climate action and building livable communities that we talk about a lot up here, that they want that, too.

And part of it, though, is the reality--and I think cities want this--but the reality is that the Legislature has said to cities, you have to do things under timelines. You can only have a certain number. You can only have five public hearings. You can only have a certain amount of time to make a decision one way or the other. These basic safeguards or requirements to make sure projects move forward are just not there for the Coastal Commission. They have a de novo review.

If something is appealed, they can open up every part of the appeal, they do not have timelines, and so as we work year after year to try to make progress on this, these are things that need attention. It's obviously, as the Chair said--and I appreciate you saying this, Madam Chair--having the Coastal Commission be an active partner in coming up with solutions that work for them, recommending things to us would be the most useful.

I'm committed to continuing to work with them on these two bills, which are substantially, really reduced from their shadows of what they were, but I understand the process, and I think they're still valuable to do instead of not do. So it is moving something forward, and so with that, I respectfully ask for your aye vote.

All right, so I believe I had a motion. Did I--did I not? Senator Menjivar made the motion? Okay. Great. We had close. Let's take a roll call. This is on SB 1092. It's 'do pass to Appropriations Committee.'

[Roll Call].

All right, SB 1092 is out; ten to zero. We'll now start, open the roll, and we'll start with consent calendar. Okay, consent calendar, please call the roll.

The current vote is seven to zero with the Chair and Vice Chair voting aye. [Roll Call].

[Roll Call]

So, we've now had all the bills completed. I appreciate everyone and staff. Thank you. I think we have a little pause now before Assembly bills come over, so you won't see us for a little while. But thank you, staff, and thank you, Members. And we are now conclude adjourn.