California government takes aim at the housing problem in 2023

California is taking active steps to alleviate the housing affordability problem plaguing The State. Governor Gavin Newsom recently signed two new bills which would incentivize the conversion of commercial properties into residential units.

Senate Bill 6 and Assembly Bill 2011, collectively called The Middle-Class Housing Act, will make it easier to convert commercial buildings into residential dwellings.

This is part of the State’s plan to provide an extra 2.5 million new units by the end of the decade. At least 1 million of these are required to be affordable, according to the Statewide Housing Plan. Many vacant or underutilized commercial properties exist, especially in and around the city centers. The new laws will make converting these properties into more affordable residential housing much easier.

Speaking about the new laws, Newsom said, “It has been a stubborn issue. Decade after decade after decade, just fighting and talking about it and fighting each other in the process,” Newsom continued.

“I think what makes today a special day is this is a big moment as we begin to take responsibility, not to give the same speech and expect the same applause, but to begin to do something about it. This is a big package. These bills matter.”

Vacant commercial properties have become an increasingly common sight in California, as many consumers now shop online. Others struggled to maintain business operations during the pandemic. Additionally, homelessness remains a challenge for the state, with a population of nearly 40 million. About 50% of homeless Americans live in The State of California. The bills have not been met without resistance, with local officials saying that the bills undermine their authority and upend years of strategic planning.

"This is a moment on a journey to reconcile the original sin of the state of California, and that's the issue of housing and affordability. We need to all be a little bit more accountable to this crisis of affordability."

"It's a concern when state law is going to override these local decisions, particularly when these local decisions are made in a public process with the community as part of a larger housing plan," said Jason Rhine, assistant director of legislative affairs for the League of California Cities. The new laws could allow the construction of up to 2 million new homes; according to Senator Anna M. Caballero, “The Middle-Class Housing Act can result in the construction of at least 2 million housing units and is one solution to build up and avoid sprawl”.