California cities could see more housing in downtown areas through a recently proposed bill that would streamline approvals of office-to-housing conversions, according to a recent announcement by the state lawmaker who introduced it.
“While the demand for living downtown is at an all-time high, many urban centers simply lack the available housing. If we are serious about jump-starting the economic engine of our cities, we need to remove the red tape that makes office-to-housing conversions nearly impossible,” Assemblyman Matt Haney, a Democrat from San Francisco, said at the May 6 unveiling of the proposed bill.
Under Assembly Bill 3068, projects that would reuse buildings for purposes other than their original design—known as “adaptive reuse projects”—could receive streamlined approval as long as certain conditions are met. To qualify, the developer must offer some of the units as affordable for low-income families, subsidized by the state, and must preserve the physical characteristics of historic buildings.
The bill aims to prevent “anti-housing” local governments from denying office-to-housing conversions, and cut down on the lengthy and expensive approvals for them, according to the recent announcement.
The bill is sponsored by YIMBY, or Yes in My Back Yard—one of the state’s largest pro-housing advocates—and by the California Preservation Foundation, bringing together two organizations usually at odds with each other.
“It’s more than just a piece of legislation—it’s a story of people coming together to solve real-world problems,” Cindy Heitzman, executive director of the California Preservation Foundation, said in the same statement. “The California Preservation Foundation and YIMBY Action worked together to ensure that the unique character of our historic sites is preserved while creating more housing.”
Vacancy rates in downtown office buildings in San Francisco and Los Angeles are at 30-year highs as more jobs go remote, Mr. Haney said.
“COVID-19 permanently altered the way humans approach work. ... California has been particularly impacted by this transition as more and more tech companies shift to offering remote work as a benefit to their employees,” the assemblyman said in an April 23 bill analysis by the Assembly Local Government committee.
He said some economic forecasters have raised alarms that empty office buildings could lose value, which would mean less tax revenue for local government services, creating a “doom-loop” scenario.
“Converting vacant office buildings into new residential units will not only stop doom-loop scenarios, it will also revitalize and enliven business districts that often became ghost towns after 5 p.m.,” Mr. Haney said.
In the past three years, California has awarded about $3.5 billion to local governments through Project Homekey—a state-sponsored program to convert hotels and motels into housing for the homeless, or those at risk of homelessness, according to the same bill analysis. The state’s budget also included nearly $500 million from the General Fund for the conversion of commercial or office space to affordable housing, for 2022 through 2024.
Such conversions allow downtowns to keep their physical traits but also meet the needs for more housing, rather than demolishing unused buildings, according to lawmakers.
So far, only Santa Clarita opposes the bill, which officials for the city say is too restrictive and would make it hard to properly vet projects before approving them.
Under the bill, cities are required to complete the permitting and entitlement of qualifying projects within 60 days or 90 days, depending on the size of project. Typically, the process takes six to nine months, according to city officials.
The shorter timeline “jeopardizes the due diligence and responsibilities held by local governments to ensure projects are vetted to preserve public health, safety, and welfare,” they said in the same bill analysis.
