California Legislative Frenzy On Housing And Energy

California legislators are in the final week of the session, and there’s a scramble on bills related to housing and renewable energy.  Here’s a rundown:


What was supposed to be the “Year of Housing” to address the state’s severe, decades-long undersupply of homes, is turning out to be pretty weak.  There are basically three bills in play, out of the 150 or so to start the session:

  • SB 2 (Atkins) would impose a $75-225 fee on individual California real estate transactions (which requires two-thirds vote);
  • SB 3 (Beall) would authorize a $4 billion bond measure for California’s November 2018 general election ballot (which requires two-thirds vote and then approval by voters); and
  • SB 35 Wiener) to force recalcitrant cities and counties to approve new infill housing projects without discretionary review.

SB 35 is the most promising, although its prevailing wage requirement will make it essentially worthless in under-performing markets in the state.  All three bills are being bundled, and Democrats in the Assembly are skittish about voting for the SB 3 real estate fee in particular.  If SB 2 goes down, will legislative leaders peal off SB 3 and SB 35 for separate votes, which might be successful on their own?  And if they do strip SB 2 from the package, will the other two bills lose support?  Stay tuned.

Meanwhile, a sleeper bill on housing is AB 1568 (Bloom), which improves infrastructure finance districts for infill projects.  Using the acronym NIFTI (Neighborhood Infill Finance and Transit Improvements Act), the bill would allow these districts to capture future increases in revenue from sources like sales and occupancy taxes to pay for infrastructure improvements up front. It’s up for a floor vote shortly.

But in the end, of the big housing bundle, only SB 35 shows real promise for lasting reform by removing authority from local governments on land use.  The affordable housing money is otherwise badly needed, but it’s ultimately not going to solve much of the problem.  And affordable housing suffers from increased costs due to the same local land use policies that thwart market-rate housing, such as high parking requirements and limits on density.  So much of these dollars will be wasted without broader land use reform.

Renewable Energy

The big bill is SB 100 (de Leon) to boost the renewable mandate in the state to 60% (from 50%) by 2030, plus a new 100% target by 2045.  The goals have broad support, but the details are now creating opposition from utilities. A defeat on this bill would be a big blow, as utilities (despite their opposition) need the stronger market signal and legal permission to procure more renewables now while the federal tax credit — set to sunset soon — is still in effect.

Meanwhile, AB 726 (Holden) to restart the process of integrating California’s grid with other western states is apparently stalling.  Some environmental groups and labor unions are concerned with how it would get implemented. It’s too bad, because a regional grid is going to be necessary to meet California’s long-term climate and energy goals in an affordable manner.  Plus, it could help solidify political support for renewables in the states that join us, by building up a domestic clean tech industry in each of those states.  If it fails this year, climate advocates should prioritize it for next year.

So on both housing and energy, there’s a lot to follow in the Golden State this week.  I’ll blog again on any successful bills once the dust settles.


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