Development fee bill stalls, SB 79 clean-up bill changed

By Brady Guertin, legislative advocate (housing)

Lawmakers are racing to get any outstanding bills from last year through a Jan. 16 deadline. Cities scored an early - albeit potentially not permanent - win in the Assembly, where legislators pulled a proposal that would have restricted development fees. In the Senate, the Local Government Committee is considering two bills that would modify SB 79 (Wiener), a measure designed to dramatically and forcibly increase housing near high-density transit stops.

What does the SB 79 clean-up language look like?

SB 677 (Wiener) would expand the definition of high-frequency commuter rail and clarify which transit stops could force new housing under SB 79. An earlier iteration of the bill would have added ferry stops while exempting mobile home and recreational vehicle parking lots from the law. After a Senate Housing Committee hearing last week, the bill now focuses solely on technical definition changes.

Cal Cities remains opposed unless amended to the measure: Lawmakers need to fix the existing law before expanding its reach. It's unclear whether the new definition will include more transit stops and what the intent behind the definition changes is. Following negotiations with the Senate Housing and Local Government committees, Sen. Scott Wiener committed to a broader cleanup measure this session.

Another bill, SB 722 (Wahab), would exempt mobile home parks and RV sites from the law. Cal Cities supports this effort, as mobile homes are an important source of affordable housing.

Cal Cities will advocate for additional legislative changes to help local governments implement SB 79. It is unclear whether lawmakers will attempt to add ferry stops to SB 79 in another bill.

What would the development fee bill have done?

AB 874 (Ávila Farías) was another run at the funds cities rely on to support new housing. The measure would have required local agencies to adopt a 30- to 55-year fee-deferral loan program for 100% affordable housing projects or reduce mitigation fees to zero. These fees are cost-recovery tools - not revenue sources.

Proponents cited a few local ordinances as examples of how this program could work. But while some cities voluntarily implement such tools, many cities cannot afford to do so. In response to opposition from Cal Cities and other local government associations, the Assembly Housing and Local Government Committee pulled the measure this week, making it ineligible to advance. However, lawmakers could revive the idea in a different bill later this year.

What's next?

Lawmakers have until Jan. 23 to get any nonfiscal two-year bills through their house of origin committee hearings and Feb. 20 to announce any new bills. As of now, the housing and local government committees are not scheduled to meet again before Jan. 23, so Cal Cities' focus has shifted to newly introduced legislation following this week's hearings.

The session will begin in earnest sometime toward the end of March, as lawmakers race to get any new bills through their first fiscal hearing before a late April deadline. Be sure to keep an eye out for Bill Talk around that time, a weekly breakdown of the biggest bills, hearings, and legislative deadlines for cities, distributed early through regional public affairs managers.