Gov. Gavin Newsom signed two major bills into law late last month that aim to tackle what he called the “original sin” of the state: the housing and affordability crisis. The laws will allow developers to turn underutilized and empty commercial buildings, those zoned for big-box stores, retail and office spaces, into housing.
The two laws, Assembly Bill 2011 and Senate Bill 6, mark a sea change in housing rules by essentially overruling local zoning to allow residential construction in office and commercial areas as long as developers meet certain affordability, environmental and labor requirements.
In Long Beach, commercial property owners are largely in favor of the laws, which could encourage more building at a time when it’s increasingly difficult to turn a profit on a retail or commercial project, according to Juan Huizar, vice president of the Long Beach Commercial Real Estate Council.
“The best use of these old, dilapidated buildings is no longer a new commercial building. It’s just not and we have a lot of them. … There’s literally not enough housing,” he said. “I like the thought of providing new housing to low-income people. … I think that’s something that doesn’t exist, it’s very few and far between and we need more of it.”
Both laws will take effect on July 1, 2023, but whether they have much impact on housing locally remains to be seen.
“This law may well have dramatic impacts in communities across California. However, the impact in Long Beach is expected to be limited,” said Development Services Spokesperson Richard de la Torre.
A map detailing where the city currently allows commercial developments but not mixed-use developments with housing includes some parts of North and East Long Beach, but the city does not anticipate AB 2011 and SB 6 will be used on these sites even when they become available.
AB 2011 and SB 6 both set labor and affordability benchmarks that developers must meet if they want to take advantage of the new zoning rules, and, “We would expect mid- to high-rise projects to be those most likely to support these wage and affordability provisions,” de la Torre said. “However the City already allows mixed-use in Downtown and the Long Beach Boulevard corridor where taller projects are allowed.”
Market conditions will ultimately determine whether builders take advantage of the new rules locally, de la Torre said, but a law that includes a similar process, SB 35, has only been used twice in Long Beach since it was signed into law in 2017—both for 100 percent affordable projects.
What exactly do the laws do?
Labor unions and affordable housing advocates struck a deal to pass SB 6 and AB 2011. Both measures seek to incentivize and increase housing density in commercial zones located near transit hubs and daily services to help meet the state’s environmental goals and avoid sprawl.
Developers will now have the choice between meeting strict labor requirements and criteria for workers or additional affordability requirements for their projects if they want to build housing in commercial zones.
AB 2011 requires that developers meet affordable housing requirements of at least 15 percent as well as abide by strict environmental requirements that will result in reduced greenhouse gas emissions and water use for new developments in exchange for a streamlined approval process for their project.
An analysis published in August by Urban Footprint, a platform that analyzes city data for urban developers and local governments, found that AB 2011 could significantly improve the environmental impact of new housing. It is predicted that households along the commercial corridors affected by the bill would use 40 percent less water, travel 33 percent fewer miles, and emit up to 45 percent fewer greenhouse gas emissions, according to the analysis.
The analysis also found that “commercial corridors targeted by the bill could provide up to 2.4 million new homes, including up to 400,000 homes affordable to low and moderate-income households across the state.”
SB 6 places labor unions and middle-income housing as its priority, requiring union-scale wages for construction as well as ensuring that they are part of a “skilled and trained workforce,” essentially guaranteeing that most workers are unionized.
While Development Services typically opposes legislation that limits local control, they said the effort to rezone underutilized space is consistent with the city’s so-called Zone In: City Core plan that will determine the look and character of a sizable chunk of Central Long Beach that stretches from Magnolia Avenue to Ximeno Avenue near the Traffic Circle and includes nearly every parcel of land between Tenth Street and Pacific Coast Highway.
The initiative is currently in the third and final phase of community engagement. It aims to update zoning regulations to support the development of new housing and mixed-use buildings to create a more walkable, pedestrian- and bike-friendly neighborhood. The zoning changes are anticipated to facilitate more than 3,000 market-rate and affordable housing units in the area, according to Development Services.
The Zone In: City Core plan, the city estimates, will have a greater impact on its development than the state’s housing package will.
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