California Will Allow Multifamily Projects to be Built in Commercial Zones

By Holly Dutton

California Governor Gavin Newsom signed two bills into law last week that will allow multifamily housing to be built in areas zoned for retail, office, and other commercial real estate uses. The bills are expected to open up “thousands” of acres of land for development and are aimed at making it easier to build much-needed affordable housing in the state. Newsom said the legislation will address a longstanding problem California has faced. “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,” he said. Both pieces of legislation will not take effect until July 2023. 

The two bills, SB 6 and AB 2011, allow housing projects to be developed in areas zoned for office, retail or parking without having to go through a rezoning, though there are differing requirements for each bill. Under AB 2011, projects that are 100 percent affordable will go through a sped-up approval process and will be exempted from the lengthy environmental review process required by the state, which has been known to delay and sometimes kill projects. SB 6 allows projects to skip the rezoning requirements for new multifamily housing on commercial property regardless of the amount of affordable units, but projects under this bill will not be exempt from local planning and environmental review processes before getting approved. Both bills require prevailing wages to be paid to construction workers on housing projects and would need to be built at a certain density depending on the characteristics of the city.

California is often viewed as the center of the housing crisis, as cities like Los Angeles and San Francisco have some of the most expensive housing costs in the country. For decades, the state has not built enough housing annually to meet demand, and while leaders have been attempting to tackle the problem, they have been hampered by existing zoning restrictions, high land costs, and NIMBYism. This latest legislation, which was part of a 38-bill housing package, could lead to more than 2 million new homes built across the state. With the bill not going into effect until next summer, it will take time to see if the legislation does what it was intended to do, but it’s an important milestone in the state’s efforts to get more housing finally built. 

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