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Gov. Gavin Newsom signs bills allowing new housing on commercial property

Flanked by lawmakers, housing advocates and labor leaders, Gov. Gavin Newsom on Wednesday in San Francisco signed two bills making it easier to redevelop underused shopping centers, office buildings and parking lots into new apartments, condos and townhomes.

Supporters celebrated the new laws — which require local governments to approve the multifamily projects as long as they meet certain criteria — as a “monumental step” toward solving the state’s intensifying housing crunch.

Housing advocates and researchers say the laws, which go into effect July 1, could help create over 2 million market-rate and affordable homes across the state and hundreds of thousands in the Bay Area.

“This is a moment on a journey to reconcile the original sin, the original sin of the state of California, and that is the issue of housing affordability,” Newsom said during a bill signing event at a former funeral home in San Francisco set to become a 98-unit affordable housing complex.

The two bills — Assembly Bill 2011 and Senate Bill 6 — free up thousands of acres of scarce available land for housing in the Bay Area. Supporters say the bills also could help put a dent in the region’s astronomical development costs by simplifying the sometimes years-long local permitting and entitlement process for many projects.

AB 2011 will streamline that approval process for 100% affordable projects on most properties currently zoned for retail, offices or parking. The law also speeds up approvals of developments that include at least 15% low-income units on commercial property along busy business corridors, including El Camino Real in the South Bay and Shattuck Avenue in Berkeley.

Local governments are required to accept the projects, as along as they meet certain building and design requirements. The law also exempts those developments from the often lengthy environmental review process required under the California Environmental Quality Act, which developers have long blamed for holding up or killing projects.

SB 6, meanwhile, bypasses rezoning requirements for new multifamily housing on commercial property regardless of affordability levels. But unlike AB 2011, it doesn’t exempt projects from full local planning and environmental review processes before approval.

Some neighborhood groups have pushed back hard against the bills. One group, San Francisco-based Livable California, described AB 2011 as a “massive state taking of flexibility needed by local jurisdictions to place housing where it best meets the needs of the community.”

On Wednesday, Newsom made clear his administration is undeterred by any local outrage, touting the state’s growing enforcement efforts aimed at ensuring local governments comply with state housing law and mandates.

“Ask the folks here in San Francisco,” Newsom said, referring to an investigation launched by the state housing department into why it takes longer there than anywhere else in California to approve desperately needed homes.

“It’s not because we don’t love you, it’s because we love you,” he said. “And you’re going to see more of that until we see more housing.”

The two bills were passed last month by the state legislature as a compromise after efforts by lawmakers to combine the measures failed because of objections from some construction labor groups, which have thwarted state housing legislation in the past. The sticking point was whether developers taking advantage of a new law should be required to use a certain number of skilled and trained workers, who tend to be union members.

In the end, lawmakers agreed that only SB 6 would mandate developers seek out skilled labor, and AB 2011 would require them to give workers union-level wages, healthcare and other benefits.

The measures are part of a larger 38-bill housing package signed by Newsom on Wednesday. That includes laws making it easier to build accessory dwelling units and farmworker housing, as well to boost affordable housing incentives. Newsom also announced the state is awarding over $1 billion in funding already set aside for affordable developments to 30 shovel-ready projects that have struggled to secure financing.

East Bay State Assemblymember Buffy Wicks, who authored AB 2011, said her bill will help ensure workers that are essential to local communities can afford to stay in the Bay Area.

“It’s not OK that I have teachers in my district in Oakland, who were born and raised in Oakland, who are driving four hours round trip … because they’re living in Tracy and beyond,” she said.

Newsom also signed legislation Wednesday to ease farmworker unionization — similar to a bill he vetoed last year — after securing a commitment from labor groups to support “clarifying language” to address his “concerns around implementation and voting integrity.”

Farmworkers had marched on the Capitol in support of AB 2183, and President Joe Biden personally appealed for its passage over Labor Day weekend.

Staff writer John Woolfolk contributed to this story. 

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