New California laws are being closely watched for their impact on multifamily investment and development fundamentals, including revenue expectations. These laws come following the approval of Assembly Bill 1482 making California the third state after Oregon and New York to impose statewide rental controls that limit annual rent increases to 5% plus inflation.
Among the new laws are the following:
Senate Bill 330, known as the Housing Crisis Act of 2019 is designed to speed up housing construction. The law cuts the time it takes to obtain building permits, limits fees on new housing development, and bars local government from reducing the number of residences that can be built. It becomes law January 1, 2020 and sunsets January 1, 2025.
Assembly Bill 1763 gives a density bonus to developments that have all units designated as affordable. It also sets aside surplus government-owned properties for future affordable housing projects and provides tax exemptions for certain properties that could be used to build affordable housing.
Senate Bill 113, which enables the transfer of $331 million in state funds to the National Mortgage Special Deposit Fund, with plans to eventually create a trust to provide aid to low-income buyers and renters.
Also signed were five bills enabling cities to increase the supply of accessory dwelling units that are often used to house elderly or ailing family members, by removing impediments to constructing small units on properties housing existing homes and apartments.