California · Real Estate

Unions, homebuilders strike deal to boost Calif. housing production

Facing a housing shortage in the nation’s most populous state, California’s legislative leaders on Thursday backed a pair of bills that would open up much of the state’s commercial land for residential development, bypassing some local zoning laws to replace shuttered shops with affordable apartments.

California doesn’t have enough places for people to live. It’s among the reasons why rents are high, homes often cost more than $800,000 and on any given night more than 100,000 people are sleeping on the streets.

To make up the shortfall, state officials say California needs to build about 310,000 new housing units per year over the next eight years — more than two-and-a-half times the number the state normally builds each year.

One popular idea is to build housing on commercial land, especially since lots of retailers have closed in recent years as shoppers moved their purchases online while some office buildings sit empty after companies adopted work-from-home schedules during the pandemic.

But to do that, developers first need permission from local governments. Local leaders often don’t want to let housing be built on land that’s been set aside for commercial use because they get more money in property taxes from stores than homes. When a store closes, some local governments are content to leave the land idle, sometimes for decades, hoping another retailer will replace it.

On Thursday, state lawmakers and labor leaders announced they would back two bills to change that. One bill would let homebuilders bypass the local approval process and build housing on some commercial land if a certain percentage of the homes they build are affordable. A separate bill would let developers build market-rate housing on commercial land, but remain subject to a local approval process.

The biggest obstacles for the bills has been figuring out who would build the housing. Labor unions, powerful supporters of the Democrats who dominate the state Legislature, have been pushing for legislation to require a “skilled and trained” workforce, meaning a certain percentage of laborers have taken a state-approved apprenticeship program. But affordable housing developers say there often aren’t enough workers available to meet that standard, which makes projects difficult to complete.

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Staff reports from The San Joaquin Valley Sun staff.