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A One-Month Test for the California Legislature

San Francisco / January 7, 2020
Yesterday, California State Senator Scott Weiner changed Senate Bill 50 (link). Weiner introduced SB50 in the state legislature three years ago to increase the supply of housing near major transit lines and job centers in California. The latest modifications give cities the flexibility to re-zone and allocate rights to affordable housing to people who live in the communities where the affordable housing is built. The modifications are significant and designed to respond to the critiques of SB50's opponents.
The bill faces a January 31 deadline to pass the California State Senate. California has the highest gross domestic product of any state in the country. And SIlicon Valley is home to the most innovative companies in the world. Yet state and local governments in California have no plan to increase the supply of housing to keep pace with population growth.
SB50 represents the best opportunity to change the rules to enable the development of more housing. The State Senate must find a way to pass this bill before the end of the month.
The primary architect of SB50's defeat last year was State Senator Anthony Portantino. Portantino's main fear is that the bill prioritizes market-rate housing over affordable housing. Respectfully, Portantino does not understand how to sequence problem solving. First, you develop pathways to enable the growth of more housing supply. As the supply grows, you designate a proportion of the new housing stock as affordable and require developers to price affordable housing according to the needs of people who live in the affected communities. Also, you take special steps to ensure the well-being of people who will be displaced by new housing development. This dynamic is possible only because there is economic growth.
If the State Senate does not pass SB50, growth will shift to other regions in the United States. Silicon Valley will remain an attractive place to start companies. But over the past few years, there has been a growing trend to setup secondary offices in other cities around the country and the world. This trend will accelerate if Senator Weiner's bill fails.

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