California’s SB 9
Given my role as a real estate agent, a community leader on the front lines of addressing homelessness, and board member of Westside Neighborhood Council, I follow the issues of housing, affordable housing and homelessness.
I found the October 11, 2021 Goldman Sachs article “The Housing Shortage: Prices, Rents and Deregulation” an interesting read.
Here are a few key facts noted in the article:
Home prices have jumped 20% over the past year.
Booming demand has reduced supply to the lowest levels since the 1970s.
Land use regulations have increased substantially over time.
“Is there a Solution to the National Housing Shortage?”
As the holder of a degree in economics, the answer to me is rather simple. It’s a matter of supply and demand. Correct? The article states:
“A large body of economic research shows that one way to boost housing supply is to reduce the regulatory burden on homebuilders. In particular, academic studies show that the rise in land-use restrictions over the last 60 years has constrained the supply of housing and increased both home prices and rents.”
The article sites how “California passed legislation last month that will effectively eliminate single-family zoning for most of the state”. At one point the writer refers to California’s legislature “abolishing” single family zoning.
In my role on Westside Neighborhood Council, I followed the debate over SB9. A majority of Century Glen stakeholders vehemently opposed SB9. In fact a whopping majority of California residents (76%) opposed SB9, yet it passed the legislature and was signed into law. So how will SB9 impact single family residential zoning and the real estate market?
The conversation is ongoing. Clues as to how SB9 will play out can be found in a UC Berkeley Terner Center for Housing Innovation report (July, 2021) The Terner Center report discusses the viability of new housing supply under SB 9.
My key takeaways are that it will take a long time for the desired effect of increased supply yielding more affordable housing. Several factors, such as the economic feasibility for a property to yield a profit for a developer, will limit the amount of redevelopment in Westside neighborhoods.
