In the tight inventory market the real estate industry is experiencing—with the U.S. facing a deficit of millions of homes—building more housing is more critical than ever. The high price of existing housing on the market has also created a larger need for affordable housing. Beyond construction costs and supply chain issues, zoning is a large hurdle to overcome to even begin the process of fulfilling housing needs.
California has become known as of late for land-use innovation to meet housing needs, with initiatives such as Accessory Dwelling Unit (ADU) reform, density bonus law, upzoning commercial corridors and strengthening housing element law. This push at the state level is something many states can take the opportunity to learn from.
The Terner Center for Housing Innovation at UC Berkeley explained in its recent webinar “Lessons From California: What States Can Learn About Zoning for More Housing” how other states can implement this experimentation.
Moderated by Sarah Karlinsky—research director for the Terner Center—the webinar featured a panel of experts, including Ramie Dare, Bay Area director of Real Estate Development for Mercy Housing California; Annie Fryman, director of Special Projects for San Francisco Bay Area Planning and Urban Research Association; Noerena Limón, CEO of Casita Coalition; and Steve Wertheim, senior advisor to California Assemblymember Buffy Wicks (D-Oakland).
Karlinsky started off by explaining that California had previously been zoning and planning at the local level, but shifted in 2016 to a state-level push via the expansion of laws.
Wertheim jumped off from Karlinsky’s start, saying that challenges at the local level led to the state push, because “local government is really badly designed to approve housing.” An influx of people to the state in the last decade or so, however, created a larger disparity in housing for families at middle and lower incomes, and skyrocketed homelessness, leading to a state-led push to start zoning for more housing.
Wertheim and Fryman credit the growth of a grassroots YIMBY movement—meaning “yes in my backyard,” the antithesis of the more anti-development “not in my backyard” groups—for the real push toward state-led zoning growth. This, coupled with a renewed force from the Democrats after becoming a super-majority in the 2016 election, led to lawmakers feeling emboldened about creating more affordable housing by addressing the state’s zoning laws.
The shift in 2016 that Karlinsky noted previously is when one of the major ADU bills was released (SB-1069, which loosened the zoning restrictions for ADUs), which Limón said is considered “probably the most successful housing supply legislations in California.” Fryman also noted SB-35, which was introduced by Senator Wiener on his first day in office, also proposed streamlining the zoning approval process for affordable housing.
By the end of 2017, Fryman said that this affordable housing movement had pushed out a “15 bill package of housing reforms that included streamlining funding, legal strengthening land use reforms and ADU reforms.”
“These laws simplified permitting, limiting minimum lock size requirements allowed multiple ADUs on single-family and multifamily properties,” Limón added. “They standardized rules across jurisdictions, making the process predictable and efficient.”
The ABCs of ADUs
The webinar held a lot of focus on ADUs as one of California’s main answers to the need for affordable housing.
ADU, an acronym for Accessory Dwelling Units, are usually an apartment within a home or even a smaller, detached home on the same lot as a main residence. ADUs can offer a place to live for family members of homeowners, whether they are college students, recent grads, retirees or just members in need of affordable housing. These units also create more rental inventory for the market, allowing homeowners to receive rental income to afford their mortgages in the process.
“What I want to really underscore is that the beauty of why ADU law has been so successful is the incremental nature of it,” said Limón. “Little by little, we didn’t know what we didn’t know until we saw it happen. This really became a lot more politically feasible and a lot more effective.”
Limón continued, noting that the changes in ADU zoning has allowed for 113,000 units permitted between 2017 and 2023, which she noted makes up a large share of housing permits in cities like LA, San Jose and Long Beach.
She added that her organization, The Casita Coalition, offers the ADU Best Practices Guidebook to help others learn how “critical it is to start with ADUs at times in order to expand to more middle housing options.”
Fryman continued from Limón’s point by noting that ADUs can hit the ground running because they do not require a new industry to create.
“Small architecture firms have long existed, small structural engineering firms have long existed. We also didn’t need a brand-new explosion of a new workforce or a new profession in order to take advantage of those laws,” she said. “I think this is something that’s made ADUs quite unique from some of the other zoning and land use reforms we’ve seen coming out of the state legislature.”
Dare went on to conclude that the expansion of zoning regulations for affordable housing initiatives and the streamlining of the approval process are key for four major reasons:
- Timing is an extremely important factor. The entitlement timeline needs to be shorter to compete for affordable housing funds.
- A shorter development timeline means less cost escalation, a lower development cost and delivering housing faster to the community.
- Industry capacity—the developers, the planning departments, the city councils and everyone who’s involved in getting affordable housing delivered to the community. If you have very complex processes versus streamlined, you are basically straining your capacity to be able to work and produce.
- It’s important from an equity standpoint. SB-35 has enabled 18,000 units to be entitled, and they’re all 100% affordable housing.
To watch the full webinar, click here.
