California has been under the scope as the nation watches its more glamorous state buckle under the pressure of housing demands, rampant homelessness, and ever-vacant retail centers. SB-6 was introduced last week aimed toward hopefully mitigating the rising demands for multifamily development, and curtailing the vacancy rate in retail.
SB-6 was approved by the state senate in a 32-2 vote allowing the new bill to move to the state assembly for approval; It will allow multifamily investors to develop housing projects on commercially zoned (C-2) land. Achieving a zoning change is no small feet and would typically deter investors from even thinking about a multifamily project on C-2 land. However, if the new law passes local authority or governments won’t have the power to stop projects solely based on zoning.
All sentiment for SB-6 to pass stems from examining the pace at which California needs to develop housing in order to meet demand. It is estimated that the state needs to build around 180,000 new homes a year to keep up with demand, however, it has only added fewer than 80,000 a year in the last 10-years.
On the national level, there were almost 9 thousand retail closures in 2020 compared to only 3,300 opening. Some California lawmakers believe that allowing housing projects to be built on commercially zoned land can be the answer to vacant buildings across the Golden State, and also the answer to curtailing homelessness or lack of housing in general. Of note, should the law pass, California would be the first state to allow multifamily on commercially zoned land.
A sister bill known as SB-15 was also introduced last week with the intention of boosting SB-6 by offering financial incentives to cities who re-zone and facilitate multifamily development on C-2 land.
“These fiscal incentives will be used by local governments to replace the sales tax revenues from these big box retail stores,” and, according to a fact sheet for the measure, would come from the California Department of Housing and Community Development.Bisnow